Q4 2020 Australian Telecom Market Highlights

Noteworthy Plans, Promotions and Activity of the Quarter

• Following on its moves at the end of Q3, Vodafone finalized the removal of its flagship SIM-Only Plus Plans and the launch of its Lite Plans in early October. The operator further continued this trend of rationalizing its mobile offerings in December when it eliminated its SMB plans. Now small business users are directed to the operator’s consumer plans. 

• From 19 October to 23 November, Telstra offered its XL 180GB plan for $50 off per month for first 12 months ($65 instead of $115). Outside of the Optus One promotion (see below), this was one of the steepest price reductions of the quarter.

• Starting 6 November, Optus reduced the price of the Optus One by almost 50% to $60 per month. This promotion was originally scheduled to end on 23 November but was extended twice before it finally concluded on 21 December. 

• Gomo (prepaid) and Felix (postpaid) entered the Australian mobile market on 23 November 2020. 

• In November, Telstra appeared to target consumers concerned with “bill shock” with the launch of its Upfront Mobile plans. These are prepaid/postpaid hybrid plans that include the features and structure of postpaid but, since consumer pay automatically upfront each month, ensure that there will be no overage charges for excess usage. 

 • On 16 November, Woolworths restructured its mobile plans, removing “I’m the Large” and changing the pricing and services for the “I’m the Extra Small/Small/Medium” plans. The operator appears to be following the “more for more” strategy, increasing both the price and data allowance of all of these plans. For instance, the price of the “I’m the Small” plan increased from $30 to $35 per month, while the data allowance jumped from 22GB to 35GB. All other features remained constant.

Major Mobile Operator Highlights

Vodafone was the most active in the promotional market (see right). While the operator launched new offers (34 times) and modified its promos (20 times) at similar rates to Optus and Telstra, where it really stood out was in its frequent extension of promotions. 

Over the course of the quarter, Vodafone extended its promotions 89 times – far more than any of its competitors. It appears that Vodafone uses these promo termination dates to generate a sense of urgency in consumers – only to then change terms at the last minute and keep successful promotions available on the market. 
Excluding offer extensions (which it employed only 8 times), Optus was the most active MNO in the promotional market – both launching (40 new promotions) and modifying (26 promotional changes) more of these short-term offers than its competitors.

 

Excluding offer extensions (which it employed only 8 times), Optus was the most active MNO in the promotional market – both launching (40 new promotions) and modifying (26 promotional changes) more of these short-term offers than its competitors. 

Of the MNOs, Optus most aggressively targeted the Black Friday period (see visualization below). The operator had relatively few promotions in October and early November but launched a substantial number during the week of Black Friday. This stood in contrast with the strategies employed by Telstra and Vodafone which had relatively few new promotions launching during the weeks around Black Friday/Cyber Monday. Telstra’s new promotions were launched at a relatively consistent cadence throughout the quarter — with a few new promos debuting every three to four weeks. Vodafone appeared to target the launch of the vast majority of its promotions in two periods: late October and late December (the Holiday Season). Other than those two periods, the operator was relatively quiet.

In addition to its activity in the promotional space, Optus was a constant tinkerer with its plans (see visualization below). The operator changed the terms, features and pricing of its underlying plans 96 times over the quarter. Most other operators largely kept their base plans constant, and instead used promotions to try to attract new customers. While Optus certainly employed these promotions, it was also willing to regularly change the specific terms its core plans.

 

Both in terms of number of plan changes and promotions, Telstra was the least active of the major operators. While the operator did launch four new plans (the Upfront mobile plans), it made no modifications to any of its existing plan lines during Q4. Telstra launched 13 promotions over the quarter and, unlike its competitors, largely did not change the initial terms of the offers. The operator made just 15 promotion modifications and only extended a promotion once. 

The promotions that the operator did launch however, were material. 25% of Telstra’s promotions were for more than $40 off per month. Comparatively, only 20% of Optus’ and 0% of Vodafone’s promotions exceeded this threshold. In general, Australia’s MVNOs were less active in the postpaid promotional space than their larger competitors, many running no promotions over the entire quarter. That said, there were some that broke from this trend and were quite active (see visualization to the right).

"Circles.Life", in particular, stood out from the rest of the MVNO market. launching more than twice as many promotions as any other MVNO in the postpaid market. Additionally, it also modified its promotions more frequently than any other MVNO.

 In addition to Circles.Life, Pennytel and Vaya were the other MVNOs that were the most active in the promotional space. Each of these operators launched five promotions over the quarter and were relatively active in modifying and/or extending their existing promos.

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