ACCC: Consumers Benefiting From Telco Sector Competition

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The Australian Competition and Consumer Commission (ACCC) states that its annual reports on the telecommunications sector for 2014-15 show that consumers are continuing to benefit from competition in the sector.The ACCC has noted that an increase in data demand has seen investment in fixed and mobile networks, while data allowances increased by over 70 per cent for DSL internet services and more than doubled for postpaid mobile services during 2014-15.

“Consumers are reaping the benefits of competition in the form of increased data allowances, new services and lower prices,” ACCC chairman Rod Sims commented.

“Consistent with the trend in recent years, consumer demand for data is continuing to increase and is affecting both fixed and mobile networks. On fixed networks, data consumption grew by 40 per cent to 1.3 million terabytes (TB) of data. On mobile networks, data consumption increased by 35 per cent to 110,000 TB.

“The increase in demand for data is largely due to the popularity of audio-visual streaming services, including the introduction of subscription video-on-demand (SVOD) services, such as Netflix, Presto and Stan.”

Meanwhile, in real terms, overall prices fell by 0.5 per cent in 2014-15.

Sims noted that this was a smaller reduction than in the previous eight years, seeing a 3.3 per cent fall each year on average, indicating “that competition on factors other than price has been a feature of the market”.

Recent industry consolidation could reflect “a desire to grow not only in response to increasing data traffic, but also to the growing presence of the National Broadband Network (NBN)”, the ACCC noted, stating that “the scale and complexity of the multi-technology mix NBN and its implications for competition and consumers” continues as a major area of interest for the ACCC.

“The communications sector faces a number of challenges in the transition to the NBN and as network operators manage increasing data traffic,” Sims commented.

“We will continue to watch these developments closely and work to ensure that consumers continue to benefit from competition.”

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