Australian mobile carriers have argued over the potential for significant changes in plan prices over the next year, with Telstra and Optus unable to agree on the future course for consumers.
However, where Telstra’s David Thodey called competitor behaviour “rational”, Optus’ Paul O’Sullivan argued the market was “hyper-competitive” and loss-leading.
“Both our major competitors have provided significant price discounts over the last half in the form of greater inclusion in caps,” O’Sullivan said in a media briefing today.
“Customers are using those minutes to make more calls although ironically for the industry it means there’s less ARPU [average revenue per user] being generated by the same volume of calls in the consumer market.”
He forecast the same level of competition would continue, indicating potential price drops for consumers between carriers.
Average revenues of Vodafone and Optus had steadily decreased in recent years. Telstra’s postpaid average revenue had also declined slightly, offset by an increases in revenues from prepaid handsets..
Thodey doubted an imminent “price war” among carriers to gain a wider mobile base.
“I think there’s reasonably rational behaviour at the moment and we’re hoping that will continue,” he said.
“Should there be a price war I think we’ll continue to be very focused on why people come to us - the coverage of the network, the strength, the great wireless data speeds - and we’ll respond accordingly. We’ve always said we want to have competitive offers in the market, we never said we’ll be the cheapest.”
Telstra and Optus also differed significantly in reporting smartphone penetration.
Where Optus reported 90 percent of new handset sales were smartphones - with almost a third of those being Android devices - Telstra and Vodafone reported half of those rates.
“Australians clearly like smartphones,” Optus chief Paul O’Sullivan said.
Telstra’s full-year financial results revealed 47 percent of all new handset additions were smartphones - almost half of Optus’ reported results.
The growth in customers had contributed to a 10.7 percent increase in revenue to $8.1 billion for Telstra's mobile business. Handset sales themselves were worth $1.16 billion, up for $856 million.
Thodey said the increase in mobile users in total had come as a result of customers expanding the number of mobile devices they owned and churn from other carriers.
By comparison, Vodafone reported a sharp drop of 375,000 customers across the year with Optus reporting only marginal increases of 28,000 customers.
O'Sullivan would not disclose the level of smartphone penetration among Optus' current customer base.
Relatively slow smartphone sales for Telstra had taken its effect, however, with the telco reporting an inventory impairment of $27 million to hold slow-moving smartphone stock.
Gartner telco analyst Geoff Johnston attributed the stark differences in smartphone penetration to potential changes in reporting sales figures by carriers.
Regardless though, he said smartphone penetration would inevitably grow to become the vast majority of mobile handsets over time.
"The manufacturers are trying to promote it that way," he said. "When you look at your overheads and the handling you might as well sell smartphones - it's way more profitable.
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