Telstra follows rivals with higher mobile prices

While Australian MNO flagship brands including Telstra continue to lift prices, sub-brand and MVNO price hikes are well below inflation.

Robert Clark, Contributing Editor, Special to Light Reading

July 9, 2024

2 Min Read
Telstra shop on the corner of a building, with people by it
(SOURCE: SAMMY/ALAMY STOCK PHOTO)

Telstra has increased its mobile prices by up to 4% – the latest in a series of price hikes by Australian telcos.

It follows Optus, which raised prices by 5% to 6% in May, and TPG-owned Vodafone, which increased charges by up to 9% in January. Optus and Vodafone are blaming inflation, which has come down in the last 12 months but is still at around 4% but Telstra's reasoning is more complicated.

The market leader's last increase was in mid-2023, when it introduced a 7% hike, in line with the then-inflation rate. Prior to that it had lifted rates charges in June 2022 by around 6%, also matching the inflation rate, according to regulator ACCC.

But Telstra's latest rise follows a decision to de-link price increases from the inflation rate. Brad Whitcomb, head of Telstra Consumer, argued the change made Telstra's pricing more consistent, and "also reflected there are a range of factors that go into any pricing decision."

Prices up 16%

"It takes a lot of work and cost to run a mobile network as large as ours, and even more to support the increased usage we have seen on our network," Whitcomb posted on the company blog.

Telstra says network traffic has increased 3.5 times over the past five years and was growing an additional 20% every year.

But Australian mobile charges are also climbing at a steady rate. ACCC estimates the three telcos jacked up prices on average by around 16% between 2021 and 2023. Similar increases had occurred in 2020 and 2021, it said in its annual market report.

"These price increases have a significant impact, with 89% of users having a mobile service provided by one of the national mobile network operators," the report stated.

The ACCC noted that the higher prices are often accompanied by bigger data packages, but consumers don't necessarily welcome them. In fact, the average size of data bundles sold increased threefold from 2022 to 2023, but usage grew by just 93%.

The positive for consumers, though, is the better value offered by telco sub-brands – like Telstra's Belong and Optus' Amaysim – and MVNOs, like Boost Mobile. ACCC found sub-brand prices increased on average by just 3% in 2022–2023, while MVNO prices had remained unchanged for three years. Consumers appear to be grasping this as well, with the market share of the sub-brands and MVNOs rising from 9% to 11% last year. 

Telstra's ASX stock rose 2.2% Tuesday.

About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like