Vodafone-commissioned research suggests that Telstra customers pay a yearly $3.1 billion premium
Research conducted by the Centre for International Economics (CIE) has found that Telstra customers are paying a premium of AUD$9 per month and AUD$20 per month for fixed line services when compared to other operators. The research, commissioned by Vodafone, suggests that this amounts to AUD$3.1 billion premium for Telstra's customer base, the equivalent of a 15 cents per litre increase in petrol prices.
CIE's report says that regional fixed line customers are the Australians most affected by this premium. While competitors such as Optus offers mobile options that service 95% of Australia's population, Telstra is the only provider of fixed line services for 46% per cent of regional areas. These customers pay a premium of AUD$450 to AUD$650 per household per year according to CIE's research.
"At Vodafone, we believe that competition and consumer choice are key," said Vodafone Director of Strategy and Dan Lloyd. "When customers have choice, they pay fair prices but this simply isn’t an option for many Australians today."
"In metropolitan areas, Telstra customers are also paying a high price premium but the good news is, they do have choice and we encourage them to look around for the better deals already available from other providers. When you look at mobile data to download and stream content, Australians are paying 50% more per gigabyte of data with Telstra than they would with other providers."
The research identified five factors that allowed for this pricing disparity. These include a subsidy that Telstra receives for servicing the entire country, the lower availability of wireless spectrum in regional areas, and consumers' reluctance to change providers.
Vodafone is seeking telecommunications policy reform to address these issues.
A Telstra spokesperson hit back, saying that Telstra's continued customer growth suggests that its subscriber base values its premium service.
"This simply confirms that over several years Telstra has been attracting more customers because we offer the things they value most, better network coverage and more innovative products and services," said the spokesperson. "The experience of the Australian market makes it clear, the companies willing to invest in their network are able to attract more customers and drive increased consumption, while under investment results in the opposite."
"We know that a great-performing network is central to getting the best value out of a mobile plan. That’s why we continue to invest to offer our customers extensive coverage, fewer dropped calls and reliable mobile data on the move. Additionally our mobile plans are designed to cater for the data needs of typical smartphone users."