The Vienna Chamber of Labor (Arbeiterkammer Wien or AK) has stated that costs for average to frequent mobile phone and mobile data users went up by between 29 percent and 78 percent from September 2013 to December 2014. The largest rise in prices was for budget monthly tariffs. AK said it is mainly a matter of higher fixed costs rather than billing for voice minutes or SMS, although more of these are being included in plan allowances, which generally far exceed what customers can use. The price of prepaid cards without data rose an average of 29 percent for average users, and for contract customers the figure was 56 percent, again without mobile data. For frequent users including mobile internet, the average price increase was 58 percent. There was a 78 percent average increase in costs for heavy users of voice and SMS who do not surf the web on their mobile devices. In certain cases, rates had even doubled. AK said that registration fees have risen by about 40 percent at A1 Austria Telekom, T-Mobile Austria and 3 Austria.
When 3 Austria acquired Orange Austria at the beginning of 2013, the number of mobile operators in the country went from four to three. In September 2014, Austria’s competition regulator announced that it would review the market in light of price rises that it said began after the consolidation. At the time of the deal, the Austrian government required 3 Austria to offer as many as 16 MVNOs access to its network, to compensate for any possible competition reduction. However, there were no takers, and as of the end of 2014, there was only one MVNO running on 3’s network. In statements made in response to the regulator’s queries, T-Mobile said that its price increases were caused by the high prices it had to pay in spectrum auctions, by increases in energy costs, and by the need to invest in infrastructure. While those factors may well be real, by this point in time it seems very likely that the decrease in the number of players in the MNO market has also affected pricing in the Austrian mobile market.
“The question of how many mobile operators a market can support is a difficult one, and regulators struggle with the conflicting priorities of fairness and profitability. Insight into the real causes of price changes emerges over time, as trends become more explicit and the roles of various factors become more obvious. In the best-case scenario, market consolidation can provide better-quality service to customers; in the case of Austria, however, it seems as if it has led to cost increases across the board, both in the prepaid and postpaid sectors.”
The Tarifica Alert