Australians could benefit from lower mobile phone service prices if the government promotes competition by allocating radio waves for a fourth telecommunications operator, according to a recent report by the Organisation for Economic Co-operation and Development (OECD). The OECD’s findings come as the nation’s three major mobile service providers—Telstra, Optus, and TPG Telecom—prepare for a competitive battle over spectrum frequencies essential for mobile communications.
In its economic survey released this week, the OECD emphasized that “pro-competitive spectrum allocation” could lower barriers for new entrants looking to challenge the dominance of the existing players. The report suggested that the Australian Communications and Media Authority (ACMA) could consider reserving spectrum specifically for new operators, which would increase competition and lead to better prices for consumers.
The OECD pointed to the experience in France, where a similar strategy was implemented. Prices for mobile phone services decreased after the French government reserved blocks of spectrum for new entrants, allowing the Iliad Group’s Free Mobile subsidiary to launch in 2012. This move expanded the market to four mobile operators, significantly benefiting consumers.
In contrast, the OECD noted that Australia’s limited competition—partly due to its low population density—has led to “relatively high retail prices and limited service quality improvements.” According to the Australian Competition and Consumer Commission (ACCC), Telstra, Optus, and TPG Telecom collectively control approximately 87 percent of the Australian market. These companies raised their entry-level post-paid mobile plan prices by an average of 7.7 percent, 5.8 percent, and 8.1 percent, respectively, for the 2024-25 period.
Calls for Proactive Government Action
The chief executive of the Australian Communications Consumer Action Network, Carol Bennett, stressed the importance of government intervention in promoting competition. She stated, “Spectrum has an incredibly valuable role for protecting consumer interests. It is something that we should be using as a mechanism to drive quality, reduce prices, and ensure we have a thriving competitive market.”
Bennett highlighted that without active encouragement of competition, new players might be deterred from entering the market, given its current structure. Australia had four mobile operators before the merger of TPG Telecom and Vodafone in 2020, leading to increased consolidation in the sector.
While the telco regulator has proposed renewing expiring spectrum licenses, there is resistance to holding a competitive auction or imposing conditions on the new licenses, such as enhancing coverage in regional areas. The latest fee proposals for spectrum licenses are higher than the ACMA’s previous recommendations but lower than earlier costs amounting to $8.2 billion.
Some lawmakers, such as Greens senator Sarah Hanson-Young, have criticized these fees, arguing that companies currently enjoy “cut-price access” to a limited resource. Conversely, telecommunications firms contend that the ACMA’s proposed prices are excessive, cautioning that such costs will ultimately be passed on to consumers through increased phone bills.
A spokeswoman for Communications Minister Anika Wells stated that a decision regarding the future of spectrum licenses has yet to be made, as the ACMA’s consultation remains ongoing. The ACMA maintains that its “rigorous market analysis” has not identified credible prospective new entrants. A spokesman noted that the ACCC concurs with the ACMA’s assessment that renewing existing licenses at a fair price is the most effective way to foster competition.
The OECD also suggested that the ACCC could mandate local telco operators to share networks and phone towers in regional areas. This strategy could help lower prices and encourage new competitors to enter the Australian market, ultimately benefiting consumers across the nation.
