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ACCC Slams TPG-Vodafone Merger As Mobile Prices Soar

The ACCC has cried “I told you so” over the TPG-Vodafone merger, pointing out that mobile plan prices have risen at all three major telcos following the deal.

Since July last year, Telstra has increased post-paid prices by $5 to $15 per month and slashed pre-paid recharge expiry from 35-42 days to 28; Optus has increased post-paid plans by $6 per month across the board; and Vodafone has hiked post-paid prices by $5 to $40 per month (offset in part by heavy discounting and bonus inclusions) while also slashing 35-day pre-paid plans to 28 days.

ACCC chair Rod Sims blamed the merger between TPG and Vodafone last year, noting that the consumer watchdog had opposed the deal on the grounds that it would lead to higher mobile prices and less incentive for the three big players to compete.

Rod Sims, ACCC.

“Despite evidence showing the three mobile network owners reacted strongly to the potential competitive threat of a new TPG network, the Court considered that the merger would be pro-competitive, allowing Vodafone to compete more effectively against Telstra and Optus.

“When markets end up with a smaller group of large look-alike players with stable positions, competition is muted and consumers pay more,” he said.

While cheaper plans are on offer from smaller providers, which include unlimited national calls and text as well as at least 15GB of data for as low as $25 per month, Telstra, Optus, and Vodafone between them hold 87 per cent of the retail mobile phone market, and more than 95 per cent of post-paid plans.

“The behaviour of the three big telcos would suggest they are not concerned about losing customers to rivals,” said Sims.

While the big three have justified their price hikes with larger data allowances, the ACCC has encouraged Australians to seek better value plans that include only the data they need.

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