ACCC report reveals prices of telco services dropping

The ACCC has stated competition in the telco industry is having a downward effect on real prices

Increased competition among telecommunications companies in Australia during the last 20 years has resulted in price drops and increases in the functionality of mobile phones and internet connections, according to the Australian Competition and Consumer Commission (ACCC).

In a report, Telecommunications Reports 2010–11, trumpeting the performance of the competition regulator during the last two decades, the ACCC said fixed-line and mobile service prices had halved in the period between 2012 and 1997/98.

Real prices also steadily dropped in 2010-11, with year on year prices for fixed line voice services falling 7.3 per cent, higher than the 5.8 per cent fall recorded in 2009-10.

Mobile voice services also fell 4.6 per cent and internet services fell 3.6 per cent.

Fixed line services are now also 42.6 per cent lower than in 1997-98.

“The availability of services has also increased through both the expansion of mobile networks and the capacity of these networks for broadband connectivity,” said Rod Sims, chairman of the ACCC, in a statement.

The report, which was tabled in parliament yesterday, was however critical of the vertical and horizontal integration of Telstra, stating the telco had, to an extent, “acted as a restraint on competitor activity and the emergence of fully effective competition”.

The report noted that parliament, however, had taken several steps to attempt to address “some of these impediments through various structural reforms introduced in recent years”, including the National Broadband Network (NBN).

“The new network will operate as a monopoly and regulatory oversight will be required to ensure that NBN Co cannot misuse its market power,” the report reads.

Noting the work carried out by the commission in the 2010-11 year, the report states that the ACCC conducted 16 major investigations for misleading and deceptive conduct by telcos, including a case with Optus which resulted in the telco being fined $5.26 million for misleading and deceptive ads.

The ACCC also received 4080 complaints about the telco industry, with one-third being redirected to other telco associations and bodies.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

Follow Computerworld Australia on Twitter: @ComputerworldAU

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