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Telstra's May 2026 price revisions increase postpaid plans by $4 and prepaid by $5 to fund 5G-Advanced and network security.
David Kennedy · Venture InsightsPeriod: FY202612 min read
Last updated
Nominal monthly increase for most Telstra postpaid plans in May 2026
Nominal increase for a standard 50GB Telstra mobile service from 2023 to mid-2026
Standard benchmark for Weighted Average Cost of Capital (WACC) in the Australian telco sector
Price increase for Telstra's 'One Number' smartwatch plan from $5 to $8
Mobile services contribution to TPG's group EBITDA in FY2025
This report analyses the 2024–2026 surge in Australian mobile pricing, led by Telstra’s May 2026 adjustments. It explores competitive responses, the strategic role of sub-brands like Boost and amaysim, and the fiscal imperative of price increases to sustain infrastructure investment amidst rising capital costs and stagnant returns.
On March 24, 2026, Telstra Group announced a significant restructuring of its mobile pricing architecture, effective May 5, 2026. This adjustment represents the third consecutive year of meaningful price increases and signals a definitive end to the era of stable or declining telecommunications costs in the Australian market.
The 2026 revisions are characterised by a nominal increase of approximately $4 per month for most postpaid plans and $5 per recharge for most prepaid services, though the underlying structural changes to the plan tiers suggest a more aggressive focus on Average Revenue Per User (ARPU) growth than previous years.
Telstra’s 2026 revisions for postpaid handheld services target the "Upfront" plan suite, led by the withdrawal of the entry-level "Starter" plan. Previously positioned as a low-cost entry point at $50 per month for a 5GB data allowance, the Starter plan’s price will escalate to $55. Critically, Telstra has decided to withdraw this plan from sale to new customers as of May 5, 2026, transitioning it to a "grandfathered" status solely for existing subscribers.
This manoeuvre effectively raises the floor for entry into Telstra’s mainline postpaid ecosystem, as the "Basic" plan - formerly $70 - becomes the new de facto entry point at $74 per month.
The "Essential" plan, catering to high-data consumers, will increase from $80 to $84 per month while maintaining its 180GB allowance, while the "Premium" plan, priced at $99 for 300GB, remains unchanged. This decision to cap the highest-tier consumer spend suggests a strategic ceiling intended to prevent churn among ultra-high-value subscribers while extracting greater yield from the mass-market Basic and Essential tiers.
| Postpaid Mobile Plan Tier | Data Inclusion | Old Price | New Price | Nominal Price Increase | Percentage Price Change |
|---|---|---|---|---|---|
| Starter (Grandfathered) | 5GB | $50 | $55 | $5 | 10.0% |
| Basic | 50GB | $70 | $74 | $4 | 5.7% |
| Essential | 180GB | $80 | $84 | $4 | 5.0% |
| Premium | 300GB | $99 | $99 | $0 | 0.0% |
| Mobile Bundle | 25GB | $57 | $61 | $4 | 7.0% |
Source: Telstra
In addition to handheld services, Telstra's mobile broadband (MBB) plans have been adjusted upward by $3 per month for the Small and Medium tiers. The "Data Bundle" plan, which facilitates data sharing across secondary devices, will see a more significant proportional increase of 33%, rising from $15 to $20. This possibly reflects the growing network overhead associated with managing multi-device ecosystems for a single subscriber identity.
While price increases are undeniably unpopular during a period of heightened economic volatility, an objective analysis of the Australian telecommunications landscape suggests they are a structural necessity for the continued viability of the nation’s digital infrastructure.
The fundamental problem is a profound paradox facing the industry worldwide: data traffic has expanded rapidly, yet the revenues generated by network operators have been flat or declining in real terms. This "decoupled trend" jeopardises the future investments required to maintain and expand the networks upon which modern society relies. Without price adjustments to re-align revenue with usage, the industry (and the national digital economy) faces several critical risks:
Investment Stagnation: A failure to fund the transition to 5G-Advanced, 6G, and the integration of satellite-to-mobile technologies.
Infrastructure Degradation: Reduced spending on network resiliency and security, leaving critical communication channels vulnerable to sophisticated cybersecurity threats and scams.
The Digital Divide: A retreat from regional and rural investment as carriers focus exclusively on high-density metropolitan areas to maximise ROI in a capital-constrained environment.
The industry is currently caught in a "capital trap." With an industry WACC of 8.3% and most operators achieving ROIs significantly below that, the current market structure is financially unsustainable. For investors, a return on capital that exceeds the WACC is non-negotiable.
Companies failing this test are exposed to long-term financial risk, regardless of revenue growth. (see our report “State of the Australian Telecommunications Industry – Telco at a Crossroads”)
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The prepaid segment, which typically attracts price-sensitive consumers, will experience increases alongside expanded data allocations - a tactical "more-for-more" approach designed to mitigate the perception of a pure price hike.
The 28-day expiry plans, the core of the prepaid market, will see an across-the-board increase of $5. For instance, the $39 recharge will move to $44, with data increasing from 15GB to 20GB.
| Prepaid Plan (28-day) | Old Price | New Price | Old Data | New Data | Nominal Price Increase | Percentage Price Change |
|---|---|---|---|---|---|---|
| Entry Tier | $39 | $44 | 15GB | 20GB | $5 | 12.8% |
| Mid Tier | $49 | $54 | 25GB | 35GB | $5 | 10.2% |
| High Tier | $59 | $64 | 35GB | 45GB | $5 | 8.5% |
| Max Tier | $69 | $74 | 70GB | 80GB | $5 | 7.3% |
Source: Telstra
Secondary digital services have not been spared. The "One Number" plan, enabling cellular connectivity for smartwatches (eSIM) by sharing a primary phone number, will increase from $5 to $8 per month. This 60% increase is particularly significant, as it targets a growing segment of tech-savvy users whose multi-device utilisation places higher demands on network signaling and security infrastructure.
The May 2026 adjustments are the latest stage of a broader "re-pricing" phase that began in earnest in early 2024. A critical turning point in Australian telecommunications history occurred when Telstra announced it would move away from automatic, annual CPI-linked price reviews. This decision granted the carrier the necessary latitude to move prices in response to holistic costs, network investment cycles, and competitive dynamics, rather than being tethered to a single, sometimes lagging, economic indicator.
Following the abandonment of CPI-indexing, Telstra implemented significant price rises in the second half of 2024.
Postpaid handheld prices increased on August 27, 2024, mostly by $4 per month. During this phase, the Basic plan rose from $62 to $65, the Essential plan from $72 to $75, and the Premium Plan by $4 to $99, though speed caps were removed on Starter and Basic plans. Prepaid services followed on October 22, 2024, with 28-day plans generally seeing a $2 to $4 upward adjustment.
The upward trend continued into 2025. In May of that year, Telstra announced another round of adjustments effective July 1, 2025, with most postpaid mobile and mobile broadband plans rising by $5 per month. For example, the Basic plan increased from $65 to $70, and the Essential plan from $75 to $80. During the 2025 round, prepaid mobile plans and the entry-level Starter plan remained unchanged, as the carrier focused its revenue capture on higher-value postpaid segments to drive ARPU in the face of slowing subscriber growth.
By comparing the 2024, 2025, and 2026 rounds, a clear pattern of "step-ladder" pricing emerges. The cost of a standard 50GB mobile service on the Telstra network has escalated from $62 in 2023 to $74 in mid-2026 - a nominal increase of 19.3% over a three-year period.
While Telstra acts as the pricing leader, its primary rivals - Optus and TPG Telecom (Vodafone) - have largely followed this upward trajectory, suggesting a collective industry consensus that the era of aggressive price wars has concluded. This "pricing discipline" is essential for the industry to manage rising input costs, including capital costs, which have affected the entire Australian economy.
Optus has implemented multiple rounds of price increases between 2024 and 2026. In May 2024, it raised postpaid SIM-only prices by $3 to $6 per month. This was followed by another prepaid increase in March 2025, where 28-day recharges rose by $4.
The 2025 postpaid round saw its "Small Choice Plus" plan increase from $52 to $55 per month, while the "Medium" plan rose from $62 to $65. In April 2026, Optus adjusted its prepaid portfolio again, increasing 28-day recharges by another $4, mirroring Telstra's trajectory.
Despite these increases, Optus continues to position itself as a value-focused premium alternative. As of mid-2026, Optus’s $55 entry-level postpaid plan remains significantly cheaper than Telstra’s new entry point, its $74 Basic plan.
TPG Telecom, through its Vodafone brand, has traditionally been the market's price "challenger." However, the fiscal realities of the post-merger environment forced a pivot toward profitability over volume:
In January 2024, Vodafone added a $4 per month hike for new postpaid customers, which was extended to existing customers on older plans by March 2024.
In July 2025, another $4 increase was implemented for older postpaid plans, bringing its "Small SIM-only" plan to $53 per month.
In April 2026, Vodafone announced further changes to its prepaid roster, with 365-day expiry plans slated for significant increases as part of a transition to "Infinite" branding, where $35 recharges may rise to $39 or more, often accompanied by the removal of speed caps to enhance service quality.
| Carrier | Plan Type | 2024 Price | 2026 Price | Nominal Price Change | Percentage Price Increase |
|---|---|---|---|---|---|
| Telstra | Basic Postpaid | $62 | $74 | +$12 | — |
| Optus | Small Choice Plus | $49 | $55 | +$6 | — |
| Vodafone | Small SIM-Only | $45 | $53 | +$8 | — |
Source: Operator websites, Venture Insights analysis
The frequent rounds of price increases have triggered significant friction between the telecommunications industry, consumer advocacy groups, and regulatory bodies. This tension highlights the difficult balance between ensuring the financial sustainability of critical digital infrastructure and addressing the rising cost of living for Australian households.
The Australian Communications Consumer Action Network (ACCAN) has been the most vocal critic of the 2026 Telstra increases. Carol Bennett, CEO of ACCAN, described the announcement as a "slap in the face" for millions of customers, particularly as it coincided with Telstra reporting record profits and increased shareholder returns.
ACCAN noted that the cumulative increase on Telstra's Basic plan has reached nearly 14% over a 12-month period, which far exceeds general inflation and wage growth. Polling conducted by ACCAN suggests that prior to the 2026 hikes, 28% of Australians were already dissatisfied with the cost of their mobile plans, and this sentiment is expected to worsen as "bill shock" becomes more prevalent.
A core defence utilised by MNOs is that telecommunications prices have, in real terms, declined over the last decade. While nominal prices are rising, the "value" provided - measured in data per dollar - and the comparative cost against other household expenses present a different perspective.
However, this "real term" argument offers little solace to households managing nominal budget constraints. The "sluggish" price performance of telcos in the past decade means that the current catch-up phase feels particularly abrupt and jarring, particularly at a time when general price rises are hitting household budgets. Consumers do not perceive a $4 monthly increase as a "real-term decline" but as a tangible $48 annual surcharge on an essential service that is increasingly viewed as a utility rather than a luxury.
The Australian Competition and Consumer Commission (ACCC) has closely monitored the industry's behaviour, expressing concern over "forced migration" tactics where customers are moved to newer, more expensive plans with data inclusions they may not need.
Former ACCC Chair Rod Sims observed that the parallel pricing movements of the "Big Three" MNOs suggest a lack of concern about losing customers to rivals, as all three major players prioritise revenue protection over aggressive market share acquisition through discounting. In its 2026-27 compliance priorities, the ACCC identified "misleading pricing in essential services," including telecommunications, as a key focus, specifically targeting manipulative digital practices and "subscription traps" that make it difficult for consumers to cancel or switch services.
However, there is another explanation for the trend to rising mobile prices that does not involve assumptions about weak competition - a difficult argument to sustain as MVNO connection share is rising. It is that all of the MNOs need to address a pattern of underpricing that, while benefitting customers in the short-term, has placed investment (and long-term customer interests) at risk. Given that the Telecommunications CPI was negative for many years until 2024, this seems a much more likely explanation.
For modern telecommunications providers, the mobile segment has eclipsed fixed-line services as the increasingly dominant driver of profitability. This shift is fueled by the ubiquity of mobile data consumption and the superior margins associated with wireless infrastructure compared to the regulated, wholesale-constrained environment of the fixed National Broadband Network (NBN).
Financial reports from the major carriers underscore this reliance. In fiscal year 2025, TPG Telecom reported mobile service revenue of $2.423 billion, a 4.2% year-on-year increase. Critically, mobile services now account for approximately 40% of TPG's group EBITDA, up from 36% three years prior, on a continuing operations basis (given that TPG has sold its fixed operations to Vocus, the actual share will now be much higher). This segment outpaced the broader industry, driven by strong subscriber growth (228,000 net additions) and a 1.4% improvement in ARPU to $35.51.
Telstra exhibits an even greater reliance on its mobile unit. Despite revenue declines in its enterprise and international businesses, Telstra's mobile and tower segments provided the necessary fiscal buffer to maintain its underlying EBITDA guidance of $8.2 billion to $8.4 billion for FY2026. The mobile segment's high operating leverage means that even marginal price increases flow directly to the bottom line, providing the capital necessary for dividend growth and debt reduction - key priorities for an investor base seeking yield in a volatile market.
From an investment perspective, the Australian telecommunications sector is now characterised as a "capital trap." The primary metric of concern is the relationship between the ROIC and the WACC. For a capital-intensive industry to be considered successful, it must generate a return that exceeds its cost of capital; failing this test exposes the industry to long-term financial risk.
Industry analysis reveals that as a whole, the Australian telecommunications sector is failing to cover its cost of capital. A standard benchmark for WACC in the sector, as suggested by ACCC-related data, is approximately 8.3%.
Telstra: Remains the only operator meeting or slightly exceeding this industry WACC. While its ROIC is currently described as "barely" at the target, management has committed to lifting this above 10% in the coming years through its T25 and subsequent strategies.
TPG Telecom: Has consistently failed to meet the 8.3% WACC threshold, despite maintaining disciplined cost controls. This persistent underperformance has necessitated strategic restructuring, including the sale of key infrastructure assets to reduce the "invested capital" denominator of the ROI ratio.
Optus: Historically the worst performer in terms of ROIC. Significant asset write-downs (approximately 40% of invested capital by Singtel in FY24) were necessary to rebase the business.
The sector’s low ROI is exacerbated by high capital intensity. To maintain competitive 5G networks, carriers must spend approximately 18% to 23% of their service revenue on capital expenditures. This includes the rollout of 5G Standalone (5G SA) and 5G-Advanced technologies, which are essential for supporting future enterprise applications in mining, agriculture, and smart cities.
Furthermore, the cost of "spectrum" - the essential airwaves required to transmit mobile signals - has become a major point of fiscal contention. Telstra has lobbied the federal government to cap spectrum license renewal prices at $3.9 billion, arguing that the Australian Communications and Media Authority (ACMA) pricing guidance of $7.34 billion is "dramatically above global norms". Telstra has further argued that the current proposal would force "difficult trade-offs" in future network investment, potentially stalling the rollout of high-capacity fibre and regional 5G infrastructure, and the industry broadly supports the same position.
This claim has recently been backed by the GSMA in a submission to the ACMA’s spectrum pricing process, stating that the proposed spectrum licence renewal pricing is misaligned with underlying industry economics, and reflects dubious assumptions about the current value of spectrum.
The price increases implemented by Telstra, Optus, and Vodafone between 2024 and 2026 represent a difficult but essential "bitter pill" for the Australian market. By moving away from rigid CPI-linked pricing toward a more discretionary, cost-reflective model, carriers are attempting to ensure that the revenue generated by their networks is sufficient to support the massive infrastructure investments required for the nation's economic future.
As long as the major operators maintain pricing discipline and the regulator acknowledges the high costs of spectrum and regional deployment, the industry may find a path to stability. For consumers, the availability of a vibrant MVNO sector provides a necessary release valve, ensuring that those who cannot afford the "premium" of the flagship brands still have access to the essential connectivity that defines participation in the modern economy. The shift toward higher prices is not a sign of a failing market, but rather a mature one re-aligning itself with the inescapable realities of modern infrastructure economics.
In conclusion, the Australian mobile telecommunications market has entered a new phase of industrial maturity. Price increases are no longer occasional anomalies but have become a fixed feature of the landscape, necessary to bridge the gap between low industry returns and high capital requirements. While this creates a challenging environment for consumers, the alternative - a degraded, under-invested national network - would represent a far greater long-term cost to the Australian economy. The current trajectory, supported by pricing discipline and strategic segmentation through MNO sub-brands and MVNOs, represents the most viable path toward a sustainable digital future.