Internet and phone access can be a matter of life and death

Australia's consumer watchdog has launched court action alleging that Optus rorted consumers by pushing the sale of products they did not want, need or understand, and pursued many for debts resulting from these sales.

What's worse, the consumers in question were primarily First Nations, low-income, or mentally or cognitively challenged. The ACCC has painted sordid picture of exploitative corporate conduct at its very worst.

Some will remember the $50 million fine Telstra received in 2021 for mis-selling products to First Nations communities. Optus' alleged conduct is just as bad, and affected even more consumers - 429 people in places including Darwin, Mount Isa and other regional parts of the country.

This alleged behaviour from Optus only compounds the pain vulnerable consumers are feeling as a result of the ever-rising price of mobile and internet services, as essential a utility as gas, water or electricity.

It's not only the ability for people to keep in contact with family and friends.

A reliable, affordable mobile and internet plan is also now critical to access important health and support services, to work, to study to be productive.

It is also an essential tool in order to stay safe in in times of natural disasters or life-threatening accidents.

As in other sectors, consumers are being hit hard. The nation's three major telcos - Telstra, TPG and Optus - have all hiked their rates this year and in many cases the increases were higher than the rate of inflation.

The price hikes come despite the fact phone and internet costs are unaffordable for more than a quarter of consumers, according to the findings of ACCAN survey conducted through Ipsos' Digital Omnibus survey in March last year.

Alarmingly it found consumers were going without other essentials in order to afford their telecommunications bills, often turning to multiple payment methods to pay their phone and internet bills.

These findings were underscored by a YouGov study in July this year that found 28 per cent of people have struggled to pay their mobile phone bill at least once in the past 12 months, including two in five (40 per cent) of Gen Z customers and 37 per cent of Millennials.

Telstra was the last to raise prices on its mobile phone plan with plans increasing by as much as 4 per cent. It lifted prices on its postpaid and prepaid plans on average by between $2 and $4 a month, with postpaid prices rising in August and prepaid prices in October.

And the price rises have come at the same time as the 3G network shutdown which means some consumers, including those on low incomes, are effectively being forced to purchase new phones.

Now it is alleged that hundreds of consumers have been sold products and plans they do not need, with financial implications they do not understand. It is nothing short of a disgrace.

Mobile plan price increases disproportionately impact low-income consumers with 89 per cent of users having a mobile service provided by one of the national mobile network operators.

The implications of this hardship are profound. Without an affordable service, people are cut off and isolated. Even accessing community services support is hampered. For children in low-income households, it creates hardship at school as they battle a growing digital divide.

Under the current carriage service provider rules, only Telstra is required to offer a product targeted at low-income households.

But often people are not aware of this. And clearly industry is not always compelled to act by itself in the interests of people who are struggling financially, despite some positive examples such as vulnerable consumers being provided with free basic phones ahead of the 3G shutdown.

There is currently the government's student broadband initiative which pays for free broadband - but only if the household doesn't have an existing NBN connection. This is something, but it is not enough.

What is needed now, more than ever, is an industry-wide obligation to offer a concessional broadband product to those who need it.

Introducing a concessional broadband product will improve the economic and social outcomes of low-income households in addition to providing direct cost-of-living relief to vulnerable consumer cohorts.

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This would see the government provide a subsidy to NBN Co to allow them to provide a wholesale price of $20 per month to retailers who will then sell an unlimited 50/20 Mbps broadband connection (and technological equivalents across wireless and satellite technologies) to households that are receiving government financial support.

Eligible households would then only have to pay approximately $30 per month at retail cost to access a concessional broadband product.

It's a move the federal government should undertake if it is to provide protection to low-income households from price increases that are too often above the inflation rate and predatory behaviour that seems to keep occurring.

It is a measure that would provide direct cost-of-living assistance to families doing it tough.

It would also help to tackle the growing digital divide that is leading to low-income families across Australia being left behind. If unaddressed it has the capacity to disadvantage a whole generation of Australian children.