TPG and Vodafone merged in a mega $15 billion deal that saw two of Australia’s big Telco companies become one and in the process, reducing competition in the market. TPG and Vodafone argued that the deal would not greatly affect competition however market research has shown otherwise.
TPG was a viable low cost alternative telco who started to build their own infrastructure around the country. Many customers were disappointed that they decided to join forces with Vodafone who are one of the big three telcos.
A report commissioned by the ACCC (Australian Competition and Consumer Commission (ACCC) has found that prices from the major carriers including Telstra, Optus and Vodafone / TPG have risen by between $60 and $480 a year. There seems to be a strong correlation between the rise in prices and the merger of TPG and Vodafone, at least ACCC chairman Rod Sims seems to think so. He was strongly opposed to the merger and his concerns seem to have eventuated.
TPG was a low cost carrier and when they entered the market it had a downward force on prices. With a market share of 87 per cent between them, Telstra, Optus and Vodafone are able to increase prices relatively easily.
Cost increases are not only due to cost of plans but also the reduction of expiry dates for pre-paid mobile plans which means people need to top up more often.
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