Telecom prices fell 1.5% during FY16: ACCC

Prices for telecommunications services in Australia fell overall by 1.5% during the 2015–16 financial year, the ACCC’s latest annual report on prices and competition in the sector indicates.

The price decline relates to the sector as a whole, including internet, mobile and fixed line services. Prices for fixed broadband grew by 2.7%, although the report notes that this was accompanied by growing data allowances in many plans.

Sector-wide, the fixed broadband price hikes were mitigated by a 7.5% decline in fixed voice service prices and a 1.8% decrease in mobile prices. Quotas also increased by 30% for postpaid and 44% for prepaid.

The increases in allowances were motivated by the ongoing explosion in data consumption — the report notes that data downloads grew by 52% for fixed broadband and 69% for mobile during the quarter.

“While some consumers may be paying more, they are also getting much more in terms of data allowances. Consumer demand for streaming services, cloud services and increasingly content rich websites and social media applications is driving this growth in data consumption,” ACCC Chairman Rod Sims said.

“Tellingly, retailers provide around four times the network capacity for each consumer on their NBN services than on Telstra’s ADSL network, enabling a better online experience for the more than 40% of consumers watching television over their broadband connection, or accessing other data-intensive applications.”

The report also found that competition is proving resilient to industry consolidation and the transition to new cost structures, with retail market shares remaining stable for the period. But wholesale shares have been fluctuating as competitive carriers migrate their services to the NBN.

“The ACCC also welcomes progress on pro-competitive structural reform. In addition, important steps have been taken to allow businesses access to Telstra’s legacy networks on more competitive terms,” Sims said.

But he added that the telecommunications sector will nevertheless be a key focus for the commission this year.

Image courtesy of Highways Agency under CC

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