The state of competition in the Australian mobile resale market
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Retail presenceThe retail landscape in Australia for mobile phone service providers is strongly represented by the “Big 3” MNOs, all of which who have hundreds of branded retail stores and thousands of employees nation-wide. Table - Mobile network operator retail presence
At one stage, Crazy John’s was the largest independent mobile phone service retail chain in Australia. It was initially a Telstra dealer but that relationship soured over allegations of overpayments, incorrect billing and anti-competitive behaviour. Crazy John’s became a Vodafone MVNO when the Telstra reseller agreement ended July 2007 and then a subsidiary of Vodafone in 2008. After cost-cutting and restructuring in 2013, Vodafone closed two-thirds of the 61 stores and rebranded the remaining as Vodafone stores. The largest independent mobile phone service reseller in Australia is now Allphones, with over 80 stores.63 Through partnerships with MNOs and MVNOs, they are a reseller for amaysim, GT Mobile, Lycamobile, TravelSIM and Vodafone. They were also resellers previously for Blink, Boost Mobile, Lebara, MySaver and Think Mobile. The majority of Australian MVNOs have no self-branded retail store operations, instead heavily relying upon online signups and postal delivery of the SIM card and any bundled phone. Even then they face stiff competition from MVNOs. For example, Telstra stated in their 2015 Sustainability Report that they have over 18,700 retail points of presence. This includes their dealers such as Fone Zone retail stores, and many supermarket outlets from the major chains who also sell MVNO products for a limited selection of providers. The following MVNOs were found to be selling starter kits and recharge vouchers through major retailers (in order of listing by the provider):
In addition to those, Dodo operates small Dodo Connect kiosks in popular locations, three of which offer mobile plan services (Chadstone, Northland and Broadmeadows)71. These small stores are primarily for providing customer access to the full range of Dodo branded products and services (Electricity, Gas, Broadband, NBN, etc.) as part of the larger push by M2 Group’s acquisition and diversification strategy (for which Dodo is a wholly owned subsidiary). Service offeringsMobile phone service offer information was collected over two periods, August 31st 2014 (475 offers) and June 30th 2015 (543 offers). The complete summary for each provider can be found in Appendix 2 - Service Provider Profiles. The following tables are descriptive summaries from the two data collection periods and percentage differences between groups. Table shows the mobile service providers that were identified in the data collection stages and the mobile network(s) they use.72 Table - Mobile service providers and network they use
Table and Table provide a summary of the offers for all MNOs and MVNOs that were found in both collection periods, grouped by the network the services are offered on74. The difference between the number of MVNOs and MNOs is due to some providers being removed from the 2015 data due to no longer offering mobile services (e.g. TransACT), no longer operating (e.g. ONEmobile), or changing the network on which they offer (e.g. KISA and E.Tel). It is important to note that “average call dollar value inclusion” is a rough measure as the underlying call charges can vary greatly, providing differing levels of value for consumers. This is becoming less of a problem with the switch to included national minutes in product offerings. Table – Offer summary for August 31st 2014
Table – Offer summary for June 30th 2015 (common MVNOs & MNOs)
Bearing this in mind, the Vodafone network was, on average, the more expensive network in 2014 at $47.24. In 2015, all three networks dropped their prices, with Telstra being the most expensive ($43.26). The Optus and Telstra networks both have considerable more call dollar value inclusion, though Telstra has the least amount of included data. In terms of data included in the offer, the Vodafone network is consistently less expensive, including a much lower price in 2015 for excess data. Table gives a comparison between the two periods for common MVNOs and MNOs. The number of MVNOs and offers have contracted over the period across all network operators, with a shift away from month to month post-paid and 24 month contract post-paid offers to prepaid offers (except on the Optus network). The average offer price has dropped by almost 10% ($45.35 to $40.86), with the largest percentage decrease being the Vodafone network (14.5%) and Telstra the smallest (4.4%). The Telstra network has seen a large increase of 21% for included call value ($338.99 to $410.96), with the Optus and Vodafone networks seeing a reduction75. There has been a large jump of almost 62% in the amount of data included, with the increase for all three networks ranging from 47.7% (Vodafone from 1572.8MB to 2323.08MB) to 69.35% (Telstra from 987.79MB to 1672.77MB). The cost of the included data and excess data costs dropped (on average) by almost 30% and 33% respectively, with the Optus network having the largest included data price drop ($0.093/MB to $0.048/MB) and the Vodafone network having the largest excess data price drop ($0.34/MB to $0.148/MB). Table - Comparison 2014 to 2015 (common MVNOs & MNOs)
Table includes the additional MVNOs identified since the initial August 31st data collection period. Table then shows the comparison between 2014 and 2015 for all providers sampled. The direction of the results are similar to those shown in Table . Table – Offer summary for June 30th 2015 (all MVNOs & MNOs)
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