Australia’s mobile market is failing Australia’s consumers, and a new report from the Organisation for Economic Co-operation and Development (OECD) makes clear why.
The OECD has found that Australia’s telecommunications sector suffers from weak competition, with just three mobile network operators controlling almost the entire market, and with no competition in less-served areas. This lack of competitive pressure is costing consumers through higher prices and weaker service outcomes for Australian consumers compared with similar countries.
The warning comes as Australia prepares to renew long-term spectrum licences - a once-in-a-generation opportunity to reset the market and promote genuine competition. Instead, recent proposals by the telco regulator, the Australian Communications and Media Authority (ACMA), would see incumbent telcos receive a discount of around $1 billion on their spectrum fees compared with the previous licence period, no competitive auction process to encourage competition and no proposal to place conditions on carrier licences to ensure that telcos invest in infrastructure and services that serve the public interest.
The OECD report shows that this approach risks locking in high prices and poor competition for decades, and recommends mandatory infrastructure sharing, including roaming and tower access in underserved areas, alongside pro-competitive spectrum settings that lower barriers for new entrants.
The report demonstrates that countries that adopt pro-competitive policy settings like spectrum reservation, license conditions and domestic roaming have lower prices, better services and higher consumer satisfaction.
ACCAN CEO Carol Bennett said that Australian consumers don’t trust their telcos, are unsatisfied and disillusioned, and this report reinforces what consumers already know – that the Australian telco sector is uncompetitive and delivering unaffordable services.
"The OECD identifies international evidence proving that pro-competitive roaming policies and modern spectrum management techniques make a significant difference for consumer wellbeing."
"The government must pull all levers at its disposal to ensure the market for essential telecommunications services is robust, reliable and offers value for money."
Professor Richard Holden was commissioned by ACCAN to provide an expert opinion on Australia’s approach to spectrum licensing and competition in the telco sector. Professor Holden said;
“The absence of license conditions on telcos mean that some of the worst served consumers in the country will continue to pay through the nose for unreliable, poor quality mobile services. The decision will lock in this state of affairs for years to come”.
"We now face a situation where telcos will get a $1 billion discount on their spectrum licences, but still charge consumers higher prices. The OECD has laid a path forward - reduced prices will come from infrastructure sharing obligations and pro-competitive use of spectrum."
"We already know that weak competition means higher prices and reduced innovation in the products and services available to consumers. Under current settings, Australians are not getting a fair deal."
“We have a chance to move in the direction of countries such as France - who through unlocking competition have reduced prices for consumers by 20%. We need to move in that direction.”
"While Australian households battle a cost-of-living crisis they cannot afford to be paying over the odds for mobile services."
"With spectrum licences up for renewal, the government has a clear choice. It can lock in today’s broken market, or it can attach strong, enforceable licence conditions that promote infrastructure sharing, competition and lower prices for decades to come.”
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Professor Richard Holden and ACCAN CEO Carol Bennett are available for comment.
About us:
The Australian Communications Consumer Action Network (ACCAN) is Australia’s peak communication consumer organisation. The operation of ACCAN is made possible by funding provided by the Commonwealth of Australia under section 593 of the Telecommunications Act 1997. This funding is recovered from charges on telecommunications carriers.
Contact details:
Alec Bennetts
Mobile: 0409 966 931
Email: [email protected]
