ACCC and Vodafone at odds on health of telecoms market

nxt513 accc and vodafone at odds on health of telecoms market
Vodafone has taken issue with a claim by the Australian Competition and Consumer Commission (ACCC) that there is healthy competition in the Australian telecommunications market, as evidenced by a reduction, on average, of the prices paid by consumers for telecommunications services of 2.7 percent in real terms in 2013-14.

ACCC chairman, Rod Sims, said. “Competition is driving substantive reductions in the price of telecommunications services, significant infrastructure investment to improve the quality and coverage of services, and technological innovation. Consumers are seeing lower prices and improved services as a result of the vigorous competition that began in the 1990s.”

As further evidence of the health of the competitive telecommunications market, the ACCC said that the average real prices of landline and mobile voice calls had fallen by around 50 percent since 1997-98.

However the statements, made on the occasion of the tabling in Federal Parliament of the ACCC's annual telecommunications reports for 2013-14, provoked an immediate response from Australia's smallest mobile network operator, Vodafone.

Vodafone's general manager of industry strategy and policy, Matthew Lobb, was reported in industry newsletter, Communications Day , saying: “We do not agree that all is well in the state of competition in the Australian telecommunications market. “In particular, we are concerned customers are not being given an accurate analysis of fixed line pricing by the ACCC. The ACCC's analysis is out of step with OECD analysis which demonstrates Australia faces some of the highest prices amongst member states.”

The ACCC said that, in 2013-14, price competition had started to pick up after remaining subdued for the previous few years, and in particular 2013-14 price reductions exceeded those for the prior year. "In 2013−14 average real prices paid for fixed voice services declined by 5.2 percent. Thiswas significantly more than the decline in 2012−13 of 3.2 percent.

Retail basic accessprices (ie line rental) declined by 3.4 percent, more than reversing a modest increase of 0.7 percent during 2012−13. Prices decreased across all calling services, with local calls declining 3.2 percent and national long-distance calls by one percent. Significant reductionsoccurred in international calls and fixed-to-mobile calls (24.9 and 10.6 percent respectively)."

It added: "The average real price paid for all types of Internet services fell by 2.2 percent during 2013−14. This is significantly greater than the 0.9 percent reduction in 2012−13."

In further support of its claims for the competitiveness of the market, the ACCC said: "Aside from headline price competition, data inclusions in broadband plans are a key point of competition in the fixed broadband market. Over the past year, and consistent with long term trends, retail broadband plans are providing greater data allowances at a given price point. There are also increasing numbers of plans available at lower prices with ‘unlimited' downloads. Broadband plans with no minimum term are also increasingly being offered."

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