Falling telco prices and increased data allowances haven’t been enough to allay the ACCC’s concerns over the Australian broadband and telecommunications market, with the consumer watchdog warning that continued scrutiny is needed.
The just released Communications Market Report 2017-18 highlights falling prices – and the potential threat of wireless to the NBN.
The report, mandated under the Competition and Consumer Act 2010, shows the average consumer renewing their fixed broadband plan would have paid 1.5 parent less in real terms and 8.3 percent less when renewing their mobile phone plan, compared with a year earlier.
Mobile broadband pricing was also down 7.5 percent, with the declines taking into account improvements such as data allowances and other inclusions.
The ACCC says NBN prices reduced four percent, while non-NBN fixed broadband prices increased 0.5 percent.
The price drops came as unlimited data plans jumped from five percent in 2013-2014 to account for 40 percent of all plans in 2017-18, while on the mobile side, there has been a 172 percent increase in data allowance.
Rod Sims, ACCC chair says consumers are benefiting from the falling prices and increased data allowances.
“The growth in data inclusions in fixed and mobile plans supports, and is potentially driving, the increased consumption of data by consumers,” Sims says.
“We do have concerns, however, that not all consumers have experienced improvements or will continue to do so in the future, which is why we are continuing our review of NBN appointment, connection and repair commitments,” he adds.
“We will also continue to closely follow developments in NBN retail markets, where competition for entry-level plans in particular appears to be lessening as retailers adapt to NBN Co’s new wholesale pricing arrangements.”
The 2017-18 time period saw NBN eclipse the legacy DSL network as the largest fixed line access network in Australia, the ACCC notes, providing more consumers with the option of acquiring ‘a much higher broadband service than is available with ADSL which on average is around 8Mbps’.
“Providers are continuing to invest in network capacity, including the next major steps which are the deployment of 5G and completion of the NBN rollout,” Sims says.
The ACCC’s quarterly Wholesale Market Indicators Report, released last month, shows more than half of the Australians connected to the NBN are subscribed to higher speed plans of 50Mbps or more.
Unsurprisingly, the annual report shows data consumption has continued its inexorable rise, with the total volume downloaded increasing by 29 percent over 2017-18. That’s most likely dues to increased use of content streaming services, social media and other content-rich applications, the report notes.
The increase was higher for data downloaded by mobile handsets, which increased 45 percent, versus fixed broadband at 27 percent.
The move away from fixed voice minutes continued, and for the first time the decrease in fixed line voice calls wasn’t offset by an increase in mobile voice minutes.
“It’s notable that, for the first time in recent years, the amount of minutes Australians spent talking on their mobiles remained steady,” Sims says.
“We’re increasingly using social media and over-the-top services like Messenger, WhatsApp and Viber to communicate with each other.”
The report also signals a warning for NBN, noting that it faces a potential challenge from wireless, particularly at the lower end, as compulsory migrations to the NBN result in key decision points for end-users.
“At this stage there remains uncertainty as to the level of fixed to mobile substitution that will occur, with the ACCC’s communication sector market study finding up to 30 percent of households will consider mobile alternatives for choosing their broadband plan.
“The communications industry and public sector are meeting the requirement for increased connectivity through ongoing investment including in 5G and most significantly with the deployment of the national broadband network (NBN), the completion of which will significantly enhance fixed line connectivity in Australia.”