The Australian Bureau of Statistics inflation figures today showed communication prices fell 0.5% over the three months to June.
This also saw the industry see a 3.8% fall in prices from June 2016 to June this year, showing longer term stagnation in what the telcos have been able to charge consumers.
The telco sector is facing commoditisation of its services like never before, with mobile virtual network operators (MVNOs) reselling the main Optus, Telstra and Vodafone networks at discounted prices.
Optus reseller Amaysim reached 1 million customers last December, while supermarkets like Aldi and Woolworths are leveraging their budget-conscious image by selling cheap SIM cards and plans directly to grocery shoppers.
But the biggest news to shock the mobile market, in April, was TPG’s plan to spend $1.9 billion to build Australia’s fourth network. While that network will be rolled out over three years, the competitive pressure has left the incumbents unable to increase margins on existing services.
The fixed broadband market has also become ultra-competitive, with the NBN this year shifting its focus from regional areas to densely populated (and more profitable) metropolitan suburbs. Vodafone, which had been solely focused on mobile for the entirety of its life in Australia, announced that it would enter the NBN market next year – again, forcing incumbents like Telstra, Optus and TPG into a corner.
Vodafone has not even revealed its NBN offerings, but budget retail giant Kogan, which is already a Vodafone reseller for mobile services, already announced to the market in June that it would sell NBN plans through the same relationship.
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