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Vodafone lifts prices amid inflation

Telecommunication costs rose 1.3 percent over the same period, according to the ABS.

“The small monthly increase in price is a necessary response to inflationary pressures and the increased costs of doing business,” Vodafone said. “This is not a decision we have taken lightly, and [we] continue to invest in our products, services and network capability to provide a greater customer experience.”

“This refresh affects the Vodafone postpaid plans only and current customers will remain on their existing plan provided they don’t make a change.”

The new “Small” plan includes 40GB of data for $45 a month – compared with 40GB for $40 under the previous structure – a 13 percent jump in the cost.

The cost of Vodafone’s “Medium” tier was steady at $55, but data allowances were reduced from 200GB to 150GB. On a price-per-GB basis, this is about 30 percent more expensive.

The “Large” plan is unchanged, costing $65 a month for 300GB. Vodafone has, however, discontinued the “X-Large” offering that cost $85 per month and gave customers unlimited data.

Vodafone said the new pricing structure “reduces the number and complexity” of plans.

It follows similar mobile pricing changes at Telstra and Optus last year.

Telstra slugged users with a 4 to 5 percent increase on their monthly mobile bills as part of a new inflation-based annual pricing review in July. And Optus soon followed suit by raising prices by 10 percent a few days later.

UBS analyst Lucy Huang said the “reduction in data inclusions could incentivise customers to upgrade over time to higher priced plans should data usage increase”.

She compared it to how Telstra simplified its plans from 1800 to 20 through its T22 strategy, which allowed it to “put in price changes easily”.

“TPG’s new plan structure is further evidence of rational pricing behavior in the Australian mobile market,” Ms Huang said.

“With the removal of the $40 price point … all of TPG’s postpaid plans are priced above its underlying postpaid [average per-user revenue], she said. “In addition, Vodafone’s pricing remains below that of Telstra and Optus, and with pressures on the cost of living through inflation and higher interest rates, Vodafone may potentially take share if consumers seek value.”

TPG shares are up 2.5 percent since the start of 2023 to $4.96.

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