Choice: Telstra charges 92% more; Customers can break out of fixed contract due to outages

Telstra Australia — A man and power lines are reflected in a Telstra poster adorning a public telephone in Sydney, Australia, August 13, 2015. Reuters/David Gray

Telstra’s customers should be able to break fixed contracts without exit fees because of the numerous outages, Choice said. The consumer advocacy group has also claimed Australia’s biggest telco is charging its customers 92 percent premium.

‘Telstra tax’

According to Choice’s study, Telstra is charging premium price for its Large Broadband plan, priced at $2963 over a 24-month contract. The plan includes 1000GB of data (plus three annual “double data” months of the customer’s choosing), phone line rental, and pay-as-you-go calls. It’s a mark-up of 92 percent for Telstra when compared to TPG’s Basic Bundle deal, which costs $1539.71 over two years with no data limit.

Fixed-term mobile Telstra customers are also paying up to 35 percent more for equivalent products, costing them $420 more per year. Choice also compares the cheapest deals in the market with Telstra’s services, learning that “Telstra tax” costs consumers from 6 percent to 92 percent more.

For example, a mobile plan with Optus’ My Plan Plus is $100 month plus handset costs for a 24-month contract. It includes unlimited national and mobile calls and 15GB data limit. In comparison, Telstra’s X-Large Go Mobile costs $135 per month for the same 24-month contract. Telstra’s deal includes about the same as Optus, but has 10GB at Telstra Air Wi-Fi hotspots. Customers are paying 35 percent more with Telstra.

Telstra defended its pricing scheme, telling iTWire in a statement that the Choice analysis is “flawed.” The telco said the agency only took select data and ignored others, making the comparison inaccurate.

“In its analysis, Choice misses many of our most comparable plans and fails to consider things customers tell us are most important, such as the breadth, speeds and availability of our network and the extras we include like free and unlimited access to Australia’s largest Wi-Fi network, free AFL and NRL season passes, free home broadband and mobile security, Telstra TV and free Apple Music on many plans,” the statement said.

The company spokesperson also claimed that Choice ignored the telco’s $75 per month 1000GB Belong broadband plan and the 1000GB $99 a month Best Bundle Ever plan in its comparison as those would render the narrative false.

Get out of Telstra contract without paying exit fees

With the recent Telstra outages, its customers are probably fed up with the disrupted services. Choice spokesman Tom Godfrey said that even with all the “free data day” Telstra has offered their customers to make up for the persistent network outages, it should still do the right thing and give customers option to get out of their fixed contract.

“Telstra claims its real point of difference isn’t data limits or cost but its network,” he was quoted by the ABC as saying. “Log those outages, record your loss and then if Telstra doesn’t agree to let you out, take the fight to the TIO because they’re clearly charging you a premium price and you’re not getting a premium service.”

TIO, or Telecommunications Industry Ombudsman, is a free service that can help customers resolve their complaints.

Australian Communications Consumer Action Network (ACCAN) CEO Teresa Corbin agreed, saying customers can get out of their contracts without paying exit fees.

“If there’s been a breach of contract [such as outage caused by the company], you’re within your rights to get out of a contract without paying exit fees,” she said. However, she added that customers should not just stop paying their bills because they need to go through the proper process first.

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