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Smaller subsidies from the telcos on smartphones has raised costs for consumers.

The competition watchdog is examining public comments by Telstra, SingTel-Optus and Vodafone Hutchison Australia executives to see whether they represent price signalling in relation to the rising cost of popular smartphones.

Price signalling involves companies releasing information to reduce competition in the market. Australia's big four banks were often accused of doing it because they told the market about plans to pass on interest rates until fresh laws were passed in 2012 to stop the practice.

Telstra, SingTel-Optus and Vodafone Hutchison Australia have all cut the subsidies they pay on popular smartphones such as Apple's iPhone 5 over the past two years. This has come with comments by senior executives at all three companies flagging the trend.

The result has been higher prices for consumers and rising profits for the telcos because the cost of smartphones is a massive burden on the industry. Most popular smartphones in Australia are bought through telcos as part of a plan.

Where a 16Gb Apple iPhone often came bundled as part of a $60-a-month contract in 2012, the same device would now cost customers more than $400 extra over the life of their contract.

Australian Competition and Consumer Commission chairman Rod Sims said he was aware of both the issue and comments by executives at all three telcos.

''We have noticed the comments,'' he said. ''The part of the law that would deal with it most are the laws related to what's called price signalling, which at the moment by regulation only apply to the banking sector, not to telecommunications.

''So in a sense the most direct law that might be relevant can't be applied beyond banks but there are other laws that can be looked at. But I can't say more than that right now.''

Mr Sims has previously called for price signalling regulations to extend to all sectors of the economy. The competition inquiry led by Professor Ian Harper is currently reviewing the issue.

Optus last week reported a 14.6 per cent rise in net profit for 2013-14 to $835 million despite a fall in subscribers. Its country chief Paul O'Sullivan said higher handset repayment costs at Telstra and Vodafone meant the telco market was moving ''in a favourable direction from a carrier point of view''.

Vodafone Australia was once the leader in slashing smartphone prices in an effort to win customers. But despite a push to regain market share that began in 2012, the company has praised and passed on lower handset subsidies.

But the issue could also extend beyond handsets. Telstra and Optus hold almost 85 per cent of the Australian market and have made comments about the need to monetise download data better.

Bank of America Merrill Lynch analyst Sameer Chopra told clients all three telcos had raised the price of post-paid plans by 8 per cent over the past six months alone.

''There is minimal (around 10 per cent) price difference across the operators,'' he told clients. ''For new and upgrading subscribers, the industry is recouping an additional 2.5 per cent in handset costs compared to six months ago.''

Former ACCC chairman and Melbourne University law school professor Allan Fels said the watchdog was right to be watching the telcos on the issue. ''The telcos would be closer to the line on illegal behaviour with European tests …,'' he said. ''The competition inquiry needs to give serious consideration for us to have something a bit broader than the current [rules] and we should look at adopting international rules.''

Optus and Telstra declined to comment. Vodafone Australia did not respond by time of publication.