Between 2018 and 2019, Australian consumer connectivity prices dropped: down 1.5 percent for fixed network internet access; lower by 6.6 percent for mobile subscriptions and minus 16.4 percent for mobile broadband prices, according to the Australian Competition and Consumer Commission.
As always, methodology matters. The most basic approach for creating a price index is to measure the change in prices from one year to the next in an average price of a basket of products.
There is a problem with this basic approach, the ACCC notes. If rapid increases in technology are improving the quality of the products, then the increases in prices should not be interpreted as price inflation because the price changes partly reflect changes to the product.
In other words, product quality changes also must be considered. That includes changes in usage allowances or access speeds, for example. It therefore is possible that specific plans might cost more, but represent better value.
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