Utility bill statistics: Brand loyalty costs Australians $4.5 billion in 2023
Your mobile, broadband and energy plans may be costing you more this year, but there are ways to save money in 2024.
It has been a tough year for most of us amid a cost of living crunch. The price of almost everything has increased, including energy, mobile and broadband. These are utilities you can't do without.
Your bills will likely have crept up compared to the previous year. However, it's possible to control how much you spend on your utilities by shopping around for the cheapest option for yourself and your household.
Finder's end-of-year report for utilities captures why we've had price hikes in 2023 and how much we're paying in loyalty tax by sticking with the same brand.
NBN loyalty tax and price changes
Aussies are paying over
in loyalty tax for NBN
NBN 25, NBN 50 and NBN 100 are popular among Australians as they fall under 1 of 3 categories: budget, standard and fast-speed internet. Currently, most people are on an NBN 50 plan according to Finder's Consumer Sentiment Tracker (CST).
We analysed how much people are paying in loyalty tax by taking the monthly cost of the cheapest plan for each speed tier on Finder as of December 2023. Then, we compared it to how much people are paying on average each month in line with Finder's CST data.
Compare NBN plans to see if you can save money by signing up for a cheaper plan.
It's becoming easier to get faster internet – here's why
NBN pricing has had the most dramatic shift in recent memory as we close out 2023.
Providers began to shake up their NBN plans in October, just before the Australian Competition and Consumer Commission (ACCC) officially gave NBN Co the green light for its new pricing framework. As a result of NBN Co's new rules, 17 out of 44 NBN providers on Finder have made changes to their plans. We expect others to follow suit in the new year.
The most notable shift from providers has been an increase in the price of NBN 50 plans by $5–$11 a month. This has reduced the price gap between NBN 50 and NBN 100. Some providers have also lowered the monthly cost of their NBN 100 plan to make it even more appealing. By paying an average of $9 more per month, people can get speeds that are twice as fast.
Energy loyalty tax and price changes
Aussies are paying over
in loyalty tax for electricity
It's easy to get stuck in a loyalty tax loop with electricity plans. Before the price hikes in 2022, we were in set-and-forget mode. It's not an easy product to understand, so we tend to switch far less often.
To calculate how much we're paying in loyalty tax, Finder looked at the 4 states that have seen major price hikes over the last 2 years. These include New South Wales, Victoria, South Australia and Queensland.
We found people in NSW and VIC were more likely to pay a loyalty tax. We analysed their average quarterly bills from our CST data (for the September–November 2023 quarter) and compared them to the cheapest single-rate tariff plans on Finder as of December 2023 using a single postcode in each state as an example.
SA and QLD residents came out in front, paying less on average than the cheapest plan on Finder. This is interesting because SA, for example, has some of the highest electricity prices in the country. However, both SA and QLD lead the way in rooftop solar, so that could explain why electricty bills are down in those states.
The caveat with our data is we don't ask people if they have solar installed, which could explain why it seems as if residents in the 2 states aren't paying a loyalty tax.
Regardless of which state you're in, make sure to shop around for a better plan in the new year, especially following findings in the ACCC's Electricity Market Inquiry Report.
The report found that in August 2023, 79% of residential customers were paying estimated prices equal to or higher than the median offer available on government comparison websites. It indicates that many households could save money by changing their electricity plan.
It also found that households on a single-rate tariff plan are paying more, equal to or less than the Default Market Offer (DMO) or Victorian Default Offer (VDO), assuming conditional discounts aren’t met.
Good to know: DMO or VDO, as it's known in VIC, is a reference price and safety net set by energy regulators each year to "protect disengaged consumers from unreasonably high prices".
Soaring electricity prices
We saw electricity prices rise on 1 July 2022 by roughly 18% when Australia found itself in the middle of the perfect energy storm. Wholesale electricity prices were high because of the war in Ukraine, the failure of coal power plants in Australia and high demand during winter.
The energy regulators were forced to pass on rising costs to customers by raising their standing offer prices. Some energy companies shut down as a result. Others encouraged their customers to switch to another provider.
Fast-forward to this year, which saw a second wave of electricity price increases on 1 July 2023 by around 25% on average. It was primarily to help recover costs from the previous year's energy crisis.
The gist is these changes have made it even more important for households to shop for a cheaper electricity plan.
of Aussies haven't switched their electricity provider in the last 6 months
A good rule of thumb is to compare plans every 6–12 months. After the first year, any discounts or benefits you were entitled to on your plan expire.
After 12 months, make sure you negotiate a new plan with your provider or you'll be put on a standing offer plan. Standing offers aren't the most competitive rates in the market.
At the same time, compare plans from other providers to see if you can secure an even better price.
Mobile loyalty tax and price changes
Aussies are paying over
in loyalty tax for mobile
The average Australian uses 10.5GB of mobile data each month.
We analysed month-to-month mobile plans on Finder that came with 10GB of data or more and calculated a monthly average cost, which was $42 a month as of December 2023. Yet according to Finder's CST, Aussies pay an average of $53 a month, meaning there's room to save money. Based on the number of people with mobile plans and the potential savings available, we got $2.2 billion as our figure for how much is being paid in loyalty tax.
We also analysed average monthly costs on Finder for low, medium and high data users. It will give you an idea of how your current mobile bills stack up based on the amount of data you use or have included in your plan.
Telstra, Optus and Vodafone plan shake-ups
Unless you're on a phone repayment plan, going with one of the major telcos could be hurting your hip pocket if you're not taking advantage of other benefits such as a discounted Optus Sport subscription.
Here's a look at how much each of their SIM only plans has changed between 2022 and 2023.
Telstra increased prices across its full mobile plan line-up
Telstra's Upfront mobile plans were the main focus of its price hikes but the telco giant also raised its prepaid plan prices by $2–$5 per recharge in July 2023.
Optus spread its price changes onto existing customers
While Optus didn't raise its prices in 2023, it did move its existing customers to its most current plan costs. Optus changed its plan prices in 2022 and removed free access to Optus Sport. Customers took to Reddit complaining their plans were now costing as much as 60% more. These customers were likely on legacy plans.
Vodafone refreshed its SIM only plans with higher prices too
Just before we get into the changes, keep in mind Vodafone almost always ran promotional offers on its mobile plans in 2022. That's why we've compared its promotional price and data allowance rather than its original plan inclusions.
Here's a look at its pricing in 2022.
In early 2023, Vodafone decided to overhaul its line-up of SIM only plans, which included scrapping its unlimited data plan for good.
Telcos may be flaunting mobile plans with heaps of data and quoting the Consumer Price Index and inflation as reasons to bump up prices, but consider whether you actually need that much data. Instead, compare mobile plans that reflect your data usage habits.
If you don't need that much data, you might be better off with a smaller provider that offers more affordable prices.
Mark Neilsen – utilities writer
"With the pricing changes in NBN officially kicking in December 2023, now is the time to switch and save. Staying loyal to your existing provider after a price rise will cost you in the long run. These days the majority of providers offer no-lock-in contracts and the option to BYO modem so it's easy to switch plans."
Aaron McAllister – energy publisher
"Electricity prices continued to trend upward in 2023. Even the energy regulator was shouting that by switching you could save 17% on your electricity bills if you hadn't switched in over 12 months. There's a massive price difference between the cheapest and most expensive electricity plan in each state by about $500+. It highlights how important it is to shop around and get hundreds of dollars back in your pocket."
Michelle Kwong – mobile and broadband publisher
"Mobile plan prices have been on the rise throughout the year with the 3 major providers all increasing their costs, which then trickled down to smaller providers like Boost Mobile, Belong and amaysim. Despite these prices going up, it's still worth comparing mobile plans to see if you can get a better deal. Almost 80% of Australians are with either Telstra, Optus or Vodafone but oftentimes, you can get the same network coverage for a lower price with a smaller provider."
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