In August 2017 TPG announced it would become our fourth mobile phone carrier, with a plan to spend $1.9 billion on spectrum licences and infrastructure. They’ll be taking on the big three – Telstra, Optus and Vodafone – who control 90% of the market, with TPG’s network expected to be complete across Sydney, Melbourne, and Canberra by mid-2018.
What will change?
At the moment TPG is actually an MVNO – a Mobile Virtual Network Operator, which means they don’t own the network they use to provide their customers with a mobile service; they just buy some of Vodafone spectrum at wholesale prices. If you’re a TPG customer, you’re actually using the Vodafone network.
But in the future TPG will own their own network, with 1200 sites identified for its mobile cell towers and a roll-out of more than three years. They’re saying they’ll reach 80 percent of the Australian population, focusing on cities. (Sorry rural people, you’ll be sticking with Telstra for now – unless they force Telstra to let competitors use its mobile network in regional and remote areas.)
The move has got the other three providers on the hop especially Telstra who are already blaming competition for shrinking margins and market share. In response, the big three will get busy adding data, entertainment and extra services into their plans, for no extra cost we hope. Telstra also announced in August that its Belong Mobile would become their low-cost brand to compete with brands like Amaysim, Aldi, Kogan – and presumably TPG.
As news.com.au reported in April, TPG’s Chief Operating Officer Craig Levy warns they’re going to be aggressive. “We are aiming at the price sensitive part of the market,” he said.
Just how cheap will TPG be?
The Australian Financial Review says we can expect TPG to slash the prices of its entry-level mobile plans by 30 to 60 percent with plans around $5/5GB and $20/50GB, based on predictions made by Bank of America Merrill Lynch.
They compare TPG to Telstra’s Belong, to be priced at $15/5GB and $25/15GB, and Virgin Mobile’s $32/15GB plan.
Bear in mind also that mobile phone plans are actually getting cheaper in Australia – the ACCC says around $11 a month cheaper compared to 2014, as reported by the SMH.
And with eight of our challenger telcos banding together to form an alliance called ‘Commpete’ with the aim of increasing their 10 to 12 percent market share to 30 percent, we’ll be seeing more movement in prices – to your benefit.
How to spot the real bargains from the pretty advertising
Whether you’re considering TPG, Telstra’s Beyond or any of the budget mobile brands to save yourself money, you’ll need to do the homework. Start by summarising how much data you use a month, how many calls you make, etc.
Whatphone has a ‘Solution Finder’ tool for choosing between SIM plans (as opposed to contract plans), and lots of great reviews, “hot offers” and comparisons. As they point out, lots of people are choosing inexpensive plans and either holding on to their phone longer or buying a new one outright and adding a SIM: food for thought.
Comparing plans – especially contracts, is confusing, especially trying compare like with like. As a result, many of us just take the plan in front of us or stick with the one we have, to our financial detriment. With the arrival of TPG this year, it’s your time to get informed and save.