OECD Report Warns Of Telco Market Failure As Australia Faces Key Spectrum Decision

Australia’s telecommunications sector is failing to deliver competitive pricing and quality service, according to a new report from the Organisation for Economic Co-operation and Development, which singles out weak competition and limited regulatory intervention as key drivers of consumer frustration.

The report comes as the Australian Communications and Media Authority prepares to renew long-term mobile spectrum licences, with decisions expected to influence market dynamics for decades.

Market Dominated By Three Players

The OECD found that just three mobile network operators control nearly the entire Australian market, with limited options for competition, particularly in rural and remote areas.

This concentrated structure is contributing to higher prices and weaker service compared with peer nations, the report says.

The lack of alternative providers and the absence of incentives for infrastructure sharing or roaming in underserved regions is leaving many consumers behind.

Discounted Spectrum Fees Under Fire

Concerns are mounting over the ACMA’s proposed approach to spectrum licence renewal.

Under the current plan, incumbent telcos would receive around $1 billion in fee reductions compared to the last licence term. There would be no competitive auction process and no enforceable conditions on licence holders to improve coverage or invest in public interest infrastructure.

The OECD warns that this approach risks embedding the current pricing and service quality issues into the future structure of the market.

Instead, it recommends introducing mandatory infrastructure sharing measures such as domestic roaming and tower access, along with regulatory settings that ease market entry for new competitors.

Countries that have adopted such reforms have reported lower prices, improved service quality and higher customer satisfaction.

ACCAN Calls For Stronger Regulatory Action

Australian Communications Consumer Action Network Chief Executive Officer, Carol Bennett, said the report confirms what consumers have experienced for years.

“Australian consumers don’t trust their telcos, are unsatisfied and disillusioned, and this report reinforces what consumers already know – that the Australian telco sector is uncompetitive and delivering unaffordable services,” she said.

“The OECD identifies international evidence proving that pro-competitive roaming policies and modern spectrum management techniques make a significant difference for consumer wellbeing.”

Bennett said the upcoming spectrum decisions represent a rare opportunity to reverse the status quo.

“The government must pull all levers at its disposal to ensure the market for essential telecommunications services is robust, reliable and offers value for money,” she said.

Economic Expert Warns Of Locked-In Inequity

ACCAN engaged Professor, Richard Holden, to assess Australia’s approach to spectrum licensing and competition.

He said the lack of regulatory conditions would lead to ongoing hardship for some of the country’s most disadvantaged mobile users.

“The absence of licence conditions on telcos mean that some of the worst served consumers in the country will continue to pay through the nose for unreliable, poor quality mobile services,” he said.

“The decision will lock in this state of affairs for years to come.”

Professor Holden criticised the $1 billion discount for incumbent telcos, saying it delivers cost savings to providers without any corresponding obligation to pass benefits to customers.

“We now face a situation where telcos will get a $1 billion discount on their spectrum licences, but still charge consumers higher prices,” he said.

“The OECD has laid a path forward – reduced prices will come from infrastructure sharing obligations and pro-competitive use of spectrum.”

International Models Show Price Relief Possible

Holden argued that Australia should look to countries like France, where regulatory reform has cut consumer prices.

“We already know that weak competition means higher prices and reduced innovation in the products and services available to consumers. Under current settings, Australians are not getting a fair deal,” he said.

“We have a chance to move in the direction of countries such as France – who through unlocking competition have reduced prices for consumers by 20 per cent. We need to move in that direction.”

He said the cost-of-living pressure facing households adds urgency to the need for structural reform.

“While Australian households battle a cost-of-living crisis they cannot afford to be paying over the odds for mobile services.”

“With spectrum licences up for renewal, the government has a clear choice. It can lock in today’s broken market, or it can attach strong, enforceable licence conditions that promote infrastructure sharing, competition and lower prices for decades to come.”

Last Updated on January 23, 2026 by Nick Ross