Economic study backed by Vodafone reports Telstra customers paid a $2.4B ‘Telstra tax’
A recent study from the Centre for International Economics commissioned by Vodafone Hutchison Australia, found that Australian carrier Telstra, a major Vodafone competitor, excessively charges its customers.
The study claims that Telstra business and residential customers pay a collective $2.4 billion in “Telstra tax,” according to the Sydney Morning Herald.
Compared to other carrier rates, the researchers found that Telstra charges an average of $15 more per month for fixed-line service and $7 more per month for mobile services. Rural communities are also disproportionately charged, according to the paper.
A Telstra rep told ZDNet that customers pay more for better services.
“This simply confirms that over several years, Telstra has been attracting more customers because we offer the things they value most: Better network coverage, and more innovative products and services,” Telstra stated. “The experience of the Australian market makes it clear the companies willing to invest in their network are able to attract more customers and drive increased consumption, while under-investment results in the opposite.”
That superiority plays out in subscriber figures. Last year Telstra counted 16 million mobile subscribers while Vodafone reported 5.3 million subscribers.
Dan Lloyd, Vodafone’s director of strategy and corporate affairs, said the price disparity emphasizes the need to reform Australia’s telecom sector.
“It’s clear that millions of Australians, especially those in regional areas who have no effective choice, are getting a raw deal from the telecommunications market structure in this country,” Lloyd said. “We have a situation where policy decisions have discouraged competition and protected the incumbent. This means customers in many areas, particularly regional Australia, simply have no alternative to paying high prices, because there is only one service provider.”
