Australia’s largest mobile provider is bumping up the cost of its monthly phone bills, but could cash-strapped customers of other networks soon also feel the pinch?
Telstra this week announced its monthly mobile costs would jump by $3 to $4 from July 1.
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The telco giant said new and existing customers would be impacted by the change, which was justified as moving “in line with the Consumer Price Index”.
Telstra flagged more price pain was to come, saying “plan pricing will include an annual review and may increase annually” with inflation.
Australia’s inflation rate has jumped to its worst result in more than two decades, as millions of Aussies face mounting living expenses.
It comes as the nation grapples with an energy crisis, with households set to see significant increases in bills from July 1.
The move by Telstra has left customers of other telco giants wondering if they too will face an increase, as households continue to struggle under mounting cost of living expenses.
At this stage, analysts are predicting TPG Telecom will not follow suit just yet, due to the small market share of Vodafone and its current ongoing fight to enter a network sharing agreement with Telstra in regional Australia.
But Optus could be another story.
Financial analyst Eric Choi said TPG was “very unlikely” to lift its prices given its 17 percent mobile market share is below targets, with Telstra dominating at 44 percent and Optus 31 percent.
Optus on the other hand had “left its options open”, Choi said Australian Financial Review.
The service last week announced it would start charging subscribers for Optus Sport for the first time from August 1.
The move has been met with mass backlash from Aussie English Premier League fans, with Optus the sole provider since Fox Sports lost its broadcasting rights six years ago.
Since then, subscriptions to the service have been offered as a bonus for simply being an Optus customer. But from August, it will now cost an extra $6.99 per month or a jump from $14.99 to $24.99 for non-mobile subscribers.
Goldman Sachs’ Kane Hannan said that Optus strongly suggested it would follow any price rises from competitors when its owner Singtel delivered its full-year results last week.
The equity research analyst said CPI-linked pricing would be a positive industry trend.
“CPI-linked pricing would be very positive for industry rationality, as it would mean that annual price rises become ‘opt out’ rather than ‘opt in’, so [it] would be more likely to occur on a recurring basis,” he said AFR.
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