The Regulatory Squeeze on Australia’s MVNO Market: Who Really Pays?

Every time you scroll a comparison site and find a cheap SIM plan from a brand you barely recognise, there is a stack of compliance obligations, industry codes and regulatory risk sitting behind it.

That stack keeps getting heavier, and the smaller brands carrying it are starting to feel the weight which is falling hardest on the industries newest entrants.

Operators have invested time and capital attempting to shake up a historically stale industry. They challenged the majors on price and forced real improvements in service, changing what Australians expect a mobile plan to look like. Australia needs more of that energy. While right now bigger well known consumer brands with existing audiences are in the sweet spot for rapid branded mobile launches, it is getting harder for no name; but worthy, newcomers to see a way through.

Branded mobile now dominates the conversation. Retail and utility players with existing customer bases and the capital to absorb compliance can keep moving. The smaller independent entrepreneurs who once saw MVNO as a clear path into telco are starting to look at higher ground outside the industry, where the regulatory tide is not rising quite so fast.

A tidal wave of new rules

Over the past two years the Australian Communications and Media Authority (ACMA) has stacked obligation on top of obligation; All reasonable and purposeful however without doubt a very strong barrier to entry.

In February 2025 the Telecommunications Amendment (Enhancing Consumer Safeguards) Bill introduced a new Carriage Service Provider registration scheme and lifted maximum penalties for breaches of industry codes and standards from $250,000 to as much as $10 million, or up to 30% of adjusted turnover in certain circumstances. ACMA also gained the power to block providers from operating in the market altogether.

For a small MVNO running on tight margins, those numbers are not survivable. In fact the plans for a new plan/brand/initiative are left on the cutting room floor. The innovators the market needs are risk and profit conscious. This environment does not a business case make for those folks.

The acts, the codes, and the numbers behind them

MVNOs sit under several overlapping pieces of legislation, each with its own penalty regime. Here is what a breach can actually cost.

Telecommunications Act 1997 (as amended, February 2025)

Maximum penalties for breaches of industry codes, industry standards and service provider determinations jumped from $250,000 to the greater of:

• $9.999 million (30,300 penalty units) per contravention (I mean, at least it’s not 10 Million!)
• three times the value of the benefit gained from the breach, or
• 30% of adjusted turnover during the breach period.

That is roughly a 40-fold increase in exposure. The turnover-based option means larger MVNOs cannot cap their risk at a fixed figure. Breach the carrier separation rules and it is another $10 million per contravention on top of that.

Telecommunications Consumer Protections (TCP) Code

Previously capped at $50,000 per breach. Under the 2025 amendments, TCP Code breaches are now directly enforceable at the full Telco Act ceiling of $9.999 million per contravention. Miss a financial hardship obligation, bungle a complaints handling timeframe, or fail to send outage communications properly, and each instance can be treated as a separate breach. Each and every one.

Spam Act 2003

MVNOs send a lot of commercial messages: plan renewals, recharge prompts, upgrade offers. The Spam Act is punishing when you get it wrong:

• $2.2 million per day for companies with a prior record sending unsolicited messages two or more times in a single day
• $444,000 per day for first-time offenders
• $220,000 per day in infringement notices if ACMA chooses not to go to court
• fines can also be set at three times the profit made from the breach.

One automated campaign with a broken unsubscribe link, running over multiple days, can push the total well into eight figures. In a low margin, fast moving consumer goods market, this is a tolling of the bell.

Do Not Call Register Act 2006

• Infringement notices up to $222,000 per day of contraventions
• Federal Court penalties up to $2.22 million per day
• $250,000 per contravention of the associated telemarketing industry standards.

Australian Consumer Law (enforced by ACCC)

The overlap with the ACL is where numbers become genuinely dangerous. Misleading conduct, unconscionable sales practices or misrepresented plans can trigger the greater of $50 million, three times the benefit, or 30% of adjusted turnover per breach. Telstra copped a $50 million ACL penalty for unconscionable conduct in its store sales. No MVNO could absorb a hit at that scale.

Privacy Act 1988

Following the 2022 reforms, maximum penalties for serious or repeated privacy breaches sit at the greater of $50 million, three times the benefit, or 30% of adjusted turnover. MVNOs hold customer identity documents, porting data, billing records and location data. A single significant breach can end the business. A challenger MVNO with 50,000 subscribers and tight margins cannot.

Will consumers actually benefit?

Consumer protection rules are, on paper, a good thing. I get it. Purposeful and community supportive. Nobody wants scam-enabled SIM swaps or unreachable Triple Zero lines. The problem is that the cumulative regulatory burden risks pushing smaller players out of the market altogether. Then we have a choke point of carriers to defend these regulations and one miss affects many.

For years the biggest perceived threat to independent pricing was acquisition. Every time one of the big three absorbed a challenger, the worry was the same: fewer truly independent brands would mean less competitive pressure on pricing and fewer real alternatives for consumers. That was the risk everyone pointed to.

Ironically, it is starting to look like consumer protections could be the bigger force. The cumulative weight of legislation built to help customers may be what finally prices independent MVNOs out of operating, before any acquisition offer ever lands. As independent MVNOs exit the market or pass compliance costs through to customers, the $30 gap between MVNO and MNO plan pricing will narrow.

Regulation designed to protect consumers may end up handing the big three an even larger share of the market, with fewer competitors to keep them honest on price.

Complete managed services as a way through

Compliance is no longer something most MVNOs can realistically build and run on their own. A growing number of smaller brands are partnering with complete managed services providers that handle it end to end: BSS and OSS platforms, KYC, fraud detection, porting integrity, outage notifications, hardship programs and regulatory reporting, all delivered on a stack that is already compliant with the current rules.

That approach spreads the cost of compliance across many brands rather than forcing each MVNO to build it alone. It keeps the platform updated as regulations change, and frees the MVNO to spend its time and money on the parts of the business customers actually see: the product, the pricing and the brand. 

If Australia is going to keep genuine competition in mobile, this is probably the model that makes it possible.

Unfortunately for now the very businesses built on providing cost of living relief to their customers are now the ones needing red tape relief themselves. Without it, the cheapest plans in the market go with them.