Austria's consumer prices rise following mobile market consolidation

Three Austria's acquisition of local rival Orange in August 2013 has helped drive up consumer prices significantly for mobile services in the country, as indicated by latest figures from the Arbeiterkammer Wien (AK)--the Vienna Chamber of Labour.

While this will be music to the ears of operators in Europe as they seek ways to improve the competitive environment, it could further exacerbate concerns by consumer groups and regulators over the impact that consolidation can have on the prices that consumers have to pay.

The AK said the cost for average phone and SMS users has risen by around 29 per cent between September 2013 and December 2014, while the average cost for mobile data users has increased 78 per cent over the same period.

Users on low-cost monthly tariffs have seen the greatest increases, while the registration fees charged by the country's three leading operators--A1, T-Mobile and Three--have increased by around 40 per cent.

AK probed pricing based on two usage models: first, an average user signing up to packages offering around 140 minutes of voice, 50 SMS, and 600MB of data; the second "power users" who sign up to packages offering around 1,000 minutes and SMS, and 1,000MB of data.

In the first case, AK found the cost of an A1 package with data increased from €22.90 ($27) in September 2013 to €34.90 in December 2014. A similar T-Mobile package price rose from €10 to €22.99 over the same period, while Three's charges have increased from €7.50 to €15.

So-called 'power' users have seen similar rises. A1's costs on a tariff including data grew from €22.90 to €34.90; T-Mobile's from €10 to €22.99; and Three Austria from €7.50 to €15.

Hutchison Whampoa completed a €1.3 billion acquisition of Orange Austria in August 2013, in a move that reduced the number of mobile network operators (MNOs) in the market from four to three.

Consolidation in European mobile markets has since become a hot potato, with Telefónica Deutschland's acquisition of fellow German operator E-Plus, and Hutchison Whampoa's purchase of O2 Ireland both approved by EU competition regulators in 2014.

Those deals, like the Three Austria move, reduced the number of mobile operators in the respective markets from four to three. In order to reduce the impact of such deals on competition and prices, the European Commission insisted that MNOs allocated space on their networks to allow new mobile virtual network operators (MVNO) to enter the market.

As things stand, this condition does not appear to have dampened price rises in Austria.

For more:
- see this Arbeiterkammer Wien report [PDF, in Austrian]
- view the AK press statement [in Austrian]

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