Telcos warn of a $7.3b ’big new mobile tax’ but are they crying crocodile tears?

Consumers have been warned they could face slower mobile upgrades and higher prices under a $7.32 billion spectrum pricing decision telcos have branded a “mobile tax”, but consumer groups say the industry is shedding “crocodile tears” over a public asset it will still pay less for.

The Australian Communications and Media Authority has released its preferred pricing for expiring spectrum licences used to support fixed wireless broadband and more than 30 million mobile services across the country.

The licences are held by mobile network operators Telstra, Optus and TPG Telecom, as well as NBN Co, with the first renewal application periods opening on June 18, 2026, for the 850 MHz and 1800 MHz bands. About 80 per cent of network licensing is due for renewal by 2032.

Spectrum is the invisible public infrastructure that allows mobile phones, wireless broadband and other communications services to operate. It is a finite national resource controlled by government, with telcos paying for the right to use it.

With billions on the line, the dispute comes down to which number matters most.

The ACMA initially proposed a price tag of between $5 billion and $6.2b in April last year. After criticism from consumer groups, it revised the figure to $7.34b in December, before shaving just $20 million from the final preferred price this week.

That makes the final benchmark more than $1b higher than the top of the regulator’s earlier indicative range, but still below the $8.2b telcos paid last time as spectrum prices fall globally.

TPG Telecom said the regulator had locked in a “mobile tax” that would drive higher costs and weaken competition across the market.

“The ACMA has effectively signed off on a big new tax on mobile use, and everyday Australians will ultimately wear the cost,” a TPG spokesperson said.

“That means less investment in better coverage and services and increasing pressure on prices.”

Telstra-commissioned analysis of more than 230 global telecommunications operators found a 10 per cent increase in spectrum costs was associated with download speeds falling by about 8 per cent and 5G coverage declining by about 6 per cent.

Using the increase from ACMA’s earlier $6.2b indicative pricing to the final $7.32b figure, that relationship would imply download speeds could be roughly 14 per cent lower and 5G coverage about 10 per cent lower than otherwise, if it held in Australia.

Australian Telecommunications Alliance chief executive Luke Coleman said investment in mobile coverage and capacity should be encouraged, “not treated as a tax-grab”.

“Every dollar spent on spectrum is a dollar that can’t be spent on better coverage, faster speeds, and more resilient networks — it’s that simple.”

But Carol Bennett, chief executive of the Australian Communications Consumer Action Network, said consumers shouldn’t believe the “crocodile tears” from telcos.

“There is absolutely no justification for higher prices on the basis of this decision. In fact, consumers should expect downward pressure on prices, given telcos will actually be paying less for access to spectrum.”

Ms Bennett said telcos were about to have a key input cost fall by about $1 billion.

“It’s understandable they’d like it on the cheap — but as a valuable public resource, they need to pay a fair price for exclusive rights to use and profit from it,” she said. “Telcos should not use this as an excuse to price gouge consumers or further increase already high mobile costs.”

ACCAN said that any spectrum “discount” should come with clear public-interest obligations attached.

The ACMA rejected both claims that the price had been inflated to raise government revenue or discounted to favour industry.

“Neither claim is correct,” ACMA chair Nerida O’Loughlin said. “After all our analysis and testing, we have concluded that $7.32b represents the market rate. It is therefore the appropriate return, ultimately to Australian taxpayers, for the use of this valuable public resource.”

The regulator said independent advice showed mobile network operators had a strong capacity to fund the licences, with rising medium-term revenue expected to support continued investment in metropolitan, regional and rural networks.

“Our advice is that spectrum pricing alone should not lead operators to increase prices for consumers, as their aggregate costs for this spectrum will be lower than what they currently incur,” Ms O’Loughlin said.

Optus, however, described the decision as a “very challenging outcome” for the company and the broader industry.

“As we set out in our submission, there are fundamental concerns with how these prices have been determined,” an Optus spokesperson said.

“The approach places significant weight on international benchmarks that do not reflect Australian market conditions, including differences in geography, population density and network cost structures.”

The telco also warned the decision came at a critical point in Australia’s digital evolution, with future investment in 6G, AI-enabled services and satellite-enabled coverage for regional and remote Australia requiring significant capital.

Optus and TPG Telecom said it will review the detail of the decision.

Telstra did not respond to questions by deadline.