The state of competition in the Australian mobile resale market



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Report Structure


This report has five major sections:

  1. The introduction identifies the project aims and rationale, followed by a detailed glossary of industry specific terms that are used throughout this report.

  2. The background section explains the roles of Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs) and Mobile Virtual Network Enablers (MVNEs), followed by an overview of the Australian mobile telecommunications market context. Key entities are identified and described.

  3. The method section outlines each of the four data collection stages. Appendix 3 – Focus Group Thought Exercise and Appendix 4 – Survey Instrument, provide further detail.

  4. The results are presented and implications are discussed. Profiles of companies offering retail mobile phone services in Australia are presented in Appendix 2 - Service Provider Profiles.

  5. Conclusions and recommendations are then presented.


Table of Contents


Acknowledgements 5

Executive Summary 6

Report Structure 9

Table of Contents 10

Tables and Figures 11

Introduction 12

Project aims 12

1.The current state of competition in the mobile telecommunications industry with regards to ownership structures, relationships, service offerings, retail presence, and consumer concerns. 12

2.The extent to which the industry includes particular practices that could be perceived as inappropriate and whether further consumer safeguards are warranted. 12

Project rationale 12

Key terms 14

Background 19

The Roles of MNOs, MVNOs & MVNEs 19

The Mobile Network Operator (MNO) 19

The Mobile Virtual Network Operator (MVNO) 20

The Mobile Virtual Network Enabler (MVNE) 20

Mobile markets in Australia 25

The dynamics of mobile network providers in Australia 27

Research Method 30

1.To investigate the current state of competition in the mobile telecommunications industry with regards to ownership structures, relationships, service offerings, retail presence, and consumer concerns. 30

2.To investigate the extent to which the industry includes particular practices that could be perceived as deceptive and whether further consumer safeguards are warranted. 30

Stage 1 – Archival (August 2014 – February 2015) 30

Stage 2 – Focus groups (March 2015 – June 2015) 33

Participants 33

Materials 33

Procedure 34

Stage 3 – Online Survey (June 2015 – July 2015) 34

Materials 34

Participants 35

Stage 4 – Archival (June 2015 – August 2015) 35

Results and Discussion 36

Archival Research 36

Ownership structures 36

TCP Code and Critical Information Summaries 40

Retail presence 56

Service offerings 58

Focus groups 69

Focus group 1 – Tertiary students 69

Focus group 2 – Professional/academic staff 70

Online survey 71

Personal mobile phone service users 71

Mobile phone service provider employees 82

Conclusion and Recommendations 85

Concluding remarks 85

Recommendations 88

Appendix 1 – TCP Code – Rule 4.1.2 Excerpt 93

Appendix 2 - Service Provider Profiles 96

ABLE NET Pty Ltd. 96

ACN 98

Adam Internet 100



ALDImobile 101

AlphaCall 104

amaysim 105

AussieSim 107

Bendigo Bank telco 108

BEST telecom 110

Blink 111

Boost Mobile 113

ClubTelco 114

CMobile 116

Commander 119

Community Telco 120

CoMobile 122

Crazy John’s 123

Cybertel Telecom 125

Dodo 126


engin 129

E.Tel 130

Exetel 132

Globalgig 134

Global Gossip 135

gotalk 136

GT Mobile 138

Hello Mobile 140

IF Telecom 141

iiNet 143

Internode 144

iPrimus 146

iTalkBB 147

Jeenee Mobile 149

Just Mobile 151

KISA 152


Kiss Mobile 154

Lebara 156

Live Connected 158

Living Networks 160

Lycamobile 162

MySaver 164

NetSpeed 166

ONEmobile 168

Optus 170

OwnFone 172

PennyTel 176

Red Bull MOBILE 178

Revolution Telecom 179

Reward Mobile 180

Savvytel 182

SlimTel 184

Southern Phone 185

SpinTel 188

Startel 189

Sure Telecom 191

TelcoGreen 193

TeleChoice 194

Telstra 196

Think Mobile 200

TPG 201

TransACT 203



TravelSIM 205

Trinity Telecom 206

Truphone 207

Ugly BiLL 209

Untimed Mobiles 211

Vaya 212


Virgin Mobile 214

Vodafone 216

vTelecom 223

Westnet 224

Woolworths Connect 226

Yatango 227

Appendix 3 – Focus Group Thought Exercise 229

Appendix 4 – Survey Instrument 231





Tables and Figures


Introduction

Project aims


The aims for this project are to investigate:

  1. The current state of competition in the mobile telecommunications industry with regards to ownership structures, relationships, service offerings, retail presence, and consumer concerns.



  1. The extent to which the industry includes particular practices that could be perceived as inappropriate and whether further consumer safeguards are warranted.

Project rationale


The relative ease of becoming an MVNO through “turn-key” solutions has resulted in a diverse and dynamic retail market for mobile phone services in Australia. Customers have both benefited and suffered from their rapid expansion. Consumers have, at face value, a broad range of plans and offers to select, from 68 MVNO brands1. However, years of acquisitions and mergers by telecommunications companies has consolidated customers and other assets of value from varying markets e.g. land line, fixed ADSL2+ broadband, mobile, etc. This means that many of the brands offered to consumers are subsidiaries of a common parent company, raising doubts as to the current state of competition in the mobile telecommunications industry. Furthermore, the Australian Competition and Consumer Commission (ACCC) has observed a slowdown in the rate by which the average price of mobile services is reducing, potentially signalling a weakening of retail price competition.2 This motivates the first aim of this project.

The Communications Alliance Telecommunications Consumer Protections (TCP) Code has seven key commitments to consumers. The first two form the basis of the Customer-Supplier relationship that is fundamental to the other five:



  1. Consumers will enjoy open, honest and fair dealings with their Supplier, and have their privacy protected.

  2. Consumers will receive clear, accurate and relevant information on products and services from their Supplier; before, during and, where appropriate, after the point of sale.

This project is concerned with whether providers are meeting these key commitments, with particular focus on the second commitment. Access to clear, accurate and relevant information to make fair comparisons between options is a core tenet of consumer empowerment. Any action by a provider that limits access to such information, intentionally or unintentionally, is not consistent with the TCP Code. An example of such an action is the use of “included value” when marketing mobile offers, where the customer has to extract important information for decision making from multiple sources which, individually, do not provide adequate means by which to compare value.3 As recommended in an OECD report in 2008, “Regulators should consider requiring that all major operators provide complete, comparable, appropriate and accurate information to consumers…”4

The TCP Code continues to evolve as research is presented and as stakeholders seek clarifications and changes.5 In this respect, “unit pricing” has been the subject of research endeavouring to understand consumer reactions to the way information is presented. For example, a 2011 report recommended to “Simplify terms and conditions and use a single page critical information sheet” and “Develop consumer-friendly trials of unit pricing and conduct further research into how consumers use unit pricing”.6 This was followed in 2014 by a report looking at consumer responses to unit pricing for mobile phone services. It recommended retaining unit pricing, but expressing voice calls in terms of one-minute calls and data prices in terms of gigabytes (or part thereof).7 There is clearly room for further reflection on how standard information is presented in the TCP Code.



These concerns motivate the second aim of this project.



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