ACCC urges Aussies to consider MVNOs in response to rising plan prices

The ACCC has found that Australian consumers are now paying more for mobile plans from Telstra, Optus and Vodafone than they were 12 months ago.
Photograph of a shady salesman clearly pulling a swift one on an unassuming couple

The ACCC (Australian Competition and Consumer Commission) is urging Australian consumers to compare mobile plans in response to various plan price increases over the past 12 months from the big three telcos: Telstra, Optus and Vodafone.

The consumer watchdog’s report found that Telstra, Optus and Vodafone have all increased the price of several postpaid plans and “effectively increased the price of a range of prepaid plans by reducing their expiry periods, forcing customers to recharge more often.”

The report targets explicit postpaid price increases from each provider as well as more subtle prepaid tweaks that effectively increase the overall price for consumers.

Telstra’s postpaid plans climbed between $5 and $15 over the year but the market-leading network also reduced prepaid recharge durations from 35 and 42 days to 28 days, which translates to a price increase between 25% and 50% per year, depending on the recharge value.

So Telstra’s ‘premium’ pricing became even premium-er over the last year, but Optus and Vodafone weren’t far behind either.

For Optus’s part, the second-largest telco in Australia increased every tier of its postpaid plan range by $6 per month, which works out at roughly 8% to 15% more expensive than the year prior.

The ACCC also highlighted Vodafone’s price increases, where plans have gone up between $5 and $40 per month over the last year. But it does make a point to explain that Vodafone’s ‘increased’ plan prices are currently heavily reduced (at least until the 30th of June). For example, the $55 100GB Vodafone plan is currently discounted to $45 per month, while the $40 50GB plan is currently reduced to $35 per month (the cheapest postpaid plan available from all three major providers). Vodafone’s most expensive plan, the $120 500GB plan, is currently half price at $60 per month.

Why am I paying more?

Telstra, Optus and Vodafone have all increased the amount of data included in each plan to warrant the price increase. But they’ve done so without maintaining an affordable entry point for people who use less data every month.

According to the ACCC’s Internet Activity Report (which sources data usage information from 13 retail service providers), the average Australian uses less than 15GB of mobile data every month. The cheapest option from every three providers provides far more than that. Telstra’s cheapest plan offers 40GB for $55 per month, Optus offers 20GB for $45 per month, and Vodafone offers 50GB for $35 per month.

What can I do?

As the ACCC suggests, you might be best off comparing your options with Australia’s various MVNOs (Mobile Virtual Network Operators).

MVNOs are often “smaller” providers that pay for access to Australia’s three mobile network providers to supply alternative plan options. Typically, these providers have lower overheads which allow them to charge less for their services.

In some cases, MVNOs are owned by one of the big three providers. Felix Mobile is a product of TPG Telecom, Gomo is an Optus brand and Belong belongs to Telstra. Those are just a few examples of MVNOs launched by the big three to provide a more affordable alternative.

Thankfully, switching mobile providers isn’t as difficult as it once was. Number porting can be almost instantaneous if you’re switching between providers on the same network and there are fewer lock-in contracts, meaning you can switch regularly without paying any exit or cancellation fees.

Will I get the same service with an MVNO?

Each MVNO uses either Telstra, Optus or Vodafone’s network and coverage is still an important consideration. For example, if you don’t get Vodafone reception, you won’t have any luck with a Vodafone MVNO. Most Telstra MVNOs (except the Telstra-owned Belong) also don’t have access to the complete Telstra network, but rather a slightly smaller wholesale network. The Telstra Wholesale Network is still bigger than Optus, but if you live in a patchy area we’d recommend checking the Telstra Wholesale Network coverage map to make sure you’re free to switch to an MVNO.

The smaller scale of these operations means you won’t always get the same number of perks or the same level of support as you would with a more established telco but if you don’t care for cheaper movie tickets and don’t mind dealing with someone over the phone or online (rather than in-store), you could save a fair bit of cash every month. Only a handful of MVNOs offer mobile phones on plans too.

Other than that, the standard mobile service should be no different from what you’d expect with the pricier network provider.

How much can I save with an MVNO?

If you’re considering switching between networks or an MVNO, there are significant savings to be made. Depending on the provider, it might not always be your best option but there are decent budget providers on every network.

On the Telstra network, the cheapest postpaid plan currently available is Tangerine’s 3GB mobile SIM, which offers $14.90 for 3GB per month (plus unlimited standard national calls and text).

Here’s a quick look at some of the cheapest plans on the Telstra network.

Over on the Optus network, you’ll find some decent savings with providers like Moose Mobile (a regularly featured provider in our best SIM plans round-up). Moose Mobile currently offers 6GB for $15.80 per month. For the first six months, you’ll only pay $9.80 per month as part of Moose’s current promotional discount.

Here’s a list of some of the cheapest plans on the Optus network.

If you’re keen on the Vodafone network, you can save even more again with a provider like iiNet Mobile, who are currently offering 8GB of data for just $10 per month for the first six months, before reverting to $19.99 per month.

Here’s how it stacks up against other cheap Vodafone MVNO plans.

The current trend with mobile providers is to offer a limited-time price for the first six months before jacking the price up again. We’ve been keeping an eye on some of the cheapest mobile plans on the market, discounted or otherwise.