EXCLUSIVE: Research Shows ACCC ‘Wrong” Over Need For Mobile Competition
Does Australia need a fourth carrier to drive value for consumers in the mobile market, the Australian Competition and Consumer Commission appear to think so, but the numbers tell a different story.
After ACCC boss Rod Sims iced the proposed merger of TPG and Vodafone ahead of the roll out of a 5G network, we decided to take a look as to whether Australians were being ripped off by only having three carriers in the 4G market.
The results based on our reseach and the sale of a Samsung S10 package, revealed some interesting results and in essence blow the ACCC reason for not allowing the merger of TPG and Vodafone clean out of the park.
Telstra, Australia’s biggest carrier and generally considered the more expensive provider, they currently offer the Samsung S10 starting at $40 per month over 24 months on its $59 plan with 3GB of data, for a minimum total cost of $2,376 over the 24-month contract.
Vodafone offers the S10 for a minimum $2,188.88 over 24 months on a plan usually including 2GB data but currently running a promotion giving customers a bonus of 6GB data.
Optus comes in the cheapest, offering the S10 with 4GB data starting at $1896 over 24 months.
In the UK, where there are four competing mobile networks, the EE Network (owned by the BT Group) has the same phone over the same contract period with only 1GB of data coming in a minimum total cost of $2,427.05 after conversion to AUD.
This is a market that has 66M people and carriers are in a position to negotiate better volume deals than Australia with just 25.09M population.
Those looking for more data can go to the O2 network, which has the S10 on a plan with 5GB for $3,044.30.
In the United States, where four networks currently compete, buying a Samsung S10 from AT&T and coupling the phone with its base plan matching Telstra’s 3GB data for 24 months costs $3011.70.
Verizon only offers 2GB data but comes in cheaper at $2,493.99.
T-Mobile differs in that their base plan features unlimited data but is priced to reflect.
Like other US networks, the prices get cheaper when multiple lines are used on the same account.
Subsequently, an S10 on T-Mobile starts at 3,589.69 over 24 months for one line with unlimited data.
Sprint, which is currently waiting on the results of a review by the United States’ Federal Communications Commission on whether it can merge with T-Mobile, offers the S10 with unlimited data for $1,718.09 over 24 months.Canada, probably the best comparison to Australia in relation to population, area and GDP, has three mobile networks, two of which, Rogers and Telus, offer the S10 starting at $3221.16 over 24 months with 6GB data.
The ACCC has opposed a merger between the nation’s third and fourth biggest mobile carriers citing threats to competition, despite Australia’s mobile networks offering cheaper and better value plans than other countries with three or more networks competing for more customers.
Three companies, Telstra, Optus and Vodafone, currently operate 4G mobile networks in Australia, serving roughly 27 million mobile phone subscribers signed up to their services or competing mobile virtual network operators (MVNOs) who buy network service at wholesale and sell it on to consumers.
The ACCC halted the proposed merger between Vodafone and TPG in the hope TPG will find another way to build its mobile network and Vodafone will continue its push into fixed broadband.
“TPG is the best prospect Australia has for a new mobile network operator to enter the market, and this is likely the last chance we have for stronger competition in the supply of mobile services,” ACCC chairman Rod Sims said.
What Sims has failed to reveal is the basis for his knock back. If competition is the motive then our reseach reveals that Australians are already getting good value when compared gto the USA, UK, and Canada.