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Mobile data prices rise as capacity crunch bites – ACCC

Regulator also watches NBN migration practices

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The capacity crunch in Australia’s mobile airwaves has brought a response from carriers, with the ACCC reporting that real prices for mobile broadband services reversed their long-standing trend and rose in 2011-2012.

The Australian Competition and Consumer Commission yesterday delivered its annual “state of the nation” report to the government. Among the gems in the 121-page epic was the observation that total mobile revenues in Australia fell in the 2011-12 period, even while demand for services continued to skyrocket.

The falling revenues are putting carriers in an invidious position as they race to roll out 4G networks and face an upcoming mobile spectrum auction.

Carriers have responded in two ways: squeezing data caps and lifting prices. Although mobile service prices overall fell by one per cent (with prepaid, down by 2.3 pe cent, falling nearly four times as much as postpaid, down by 0.6 per cent), mobile data services rise 1 per cent.

Telstra’s continuing and growing dominance of the mobile market can’t be helping the competitive picture. The incumbent has thrown its considerable marketing clout behind mobile services, and the ACCC reports that since 2010, Telstra has added five percent to its mobile market share (from 37 per cent to 42 percent), while Optus’ share has remained flat at 30 per cent.

The troubled Vodafone – which is now preparing its lawyers for a class-action suit over poor service and which has reported that its loss for 2012 ballooned to more than $AU800 million – is the big loser here, down from 27 per cent share in 2010 to 23 percent in 2012, and MVNOs now hold just 5 per cent of the Australian mobile market.

In a small aside in the 121-page report, the regulator noted that as service providers begin migrating customers to the National Broadband Network, customers will have an opportunity to re-think their broadband contracts.

The report says “there is a risk that RSPs may engage in unfair market practices” during the transition, to forestall customer leakage to other retailers. Presumably, then, the regulator will be watching in case such practices emerge.

The full report is here. ®

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