The Australian Competition and Consumer Commission has published its annual reports on the telecommunications sector for 2014–15. This year’s reports show that consumers continue to benefit from competition in the sector. However consumers in regional areas are less well served.
“Consumers are reaping the benefits of competition in the form of increased data allowances, new services, and lower prices,” ACCC Chairman Rod Sims said.
“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,” Mr Sims said.
Industry members have responded to the increase in demand by investing in their fixed and mobile networks to make sure that they have sufficient capacity to meet the data traffic.
Service providers have also responded by increasing data allowances. During 2014-15, data allowances increased by over 70 per cent for DSL internet services and more than doubled for post-paid mobile services.
At the same time, overall prices fell by 0.5 per cent in real terms in 2014-15.
“While a smaller reduction than in the previous eight years, which has seen a 3.3 per cent fall each year on average, this indicates that competition on factors other than price has been a feature of the market,” Mr Sims said.
“Given this, the ACCC will continue to take a particular interest in ensuring consumers receive accurate information about network performance.”
A number of important mergers and new alliances occurred in the past year, including TPG’s acquisition of iiNet and NBN Co’s acquisition of Optus’ hybrid fibre coaxial (HFC) network.
“The fixed broadband market is now relatively concentrated and further consolidation would receive close attention from the ACCC,” Mr Sims said.
The recent industry consolidation may 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 rollout of the NBN is one of the most significant features of the telecommunications market with nearly 700, 000 active services in 2014–15. The scale and complexity of the multi-technology mix NBN and its implications for competition and consumers continues to be a major area of ACCC interest.
“The communications sector faces a number of challenges in the transition to the NBN and as network operators manage increasing data traffic. We will continue to watch these developments closely and work to ensure that consumers continue to benefit from competition”, Mr Sims said.
