Optus launches price freeze on mobile phone plans as part of an escalating telco battle
Australia’s second largest telco will freeze the price of all mobile phone plans this year in what experts say is shaping up as a fresh price war between carriers.
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One of Australia’s biggest telcos has committed to freezing the price of all smartphone plans for the rest of the year in a move industry experts say could help a growing number of consumers “struggling with the cost of telecommunications services” during the coronavirus pandemic.
Optus unveiled its new policy today, revealing the price freeze would affect prepaid and postpaid phone plans and was designed to respond to a “tone deaf” price rise from its biggest competitor.
Telstra raised the price of all mobile phone plans early this month, with its most expensive plan up by $15 a month and others growing by $5.
Both new and existing customers will be impacted by the changes.
But Optus marketing managing director Matt Williams said charging customers as much as $180 more every year to keep their smartphones connected was “surprising” and poorly timed.
“It seems tone deaf in the middle of the COVID pandemic when many Australians are losing jobs or struggling financially,” he told News Corp.
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“It’s definitely not what we’d be doing at this time. Accordingly, we have no plans or intentions to increase our mobile prices and we’ll be freezing that until the end of 2020, which is a pretty strong statement.”
Mr Williams said the company’s month-to-month phone plans would continue to start at $39 — undercutting Telstra by $16 — and the company would more aggressively court disaffected Telstra users.
“We invite any of the Big T’s customers, who may obviously be a bit fed up with the lack of choice they’ve been given, to give us a try,” he said.
“There is no reason to put up those price increases.”
Australian Communication Consumer Action Network chief executive Teresa Corbin said keeping telecommunications affordable was vital as a growing number of remote workers relied on staying connected to keep their jobs in a difficult economy.
“While the COVID-19 crisis has shown the importance of being connected to our phone and internet services, it’s also led to greater financial stress for many households,” she said.
“Many people are already struggling with cost of telecommunications services and for those households paying at least an extra $5 per month for their mobile bill may be a serious concern.”
Ms Corbin said Australia telcos should ensure “financial hardship policies” were easy to find and access during the pandemic, and called for more assistance to ensure Australians could stay online.
“We want phone and internet providers to continue to waive late fees, freeze debt collection action and assist struggling households so that Australians can keep connected,” she said.
Telsyte managing director Foad Fadaghi said the changing cost of phone plans showed Australians should shop around for the cheapest price, as many companies were offering “ultra low-cost plans” even if Telstra was no longer chasing that market.
“We’ve never seen prices so low for fixed or mobile connectivity,” he said.
“There are a lot of new options available.”
Telstra’s price rises will begin in September, though existing customers who move to a new plan before September 30 will receive a credit for the difference for the first 12 months.
Originally published as Optus launches price freeze on mobile phone plans as part of an escalating telco battle