A man uses his mobile phone in front of a Telstra logo in central Sydney, August 13, 2009. Reuters/Daniel Munoz

Telstra will be refunding customers who are not getting the speed they were promised from nbn. The Australian telco admitted that about 1 percent of its nbn customers were promised speeds that could not be achieved realistically at their location.

Kevin Russell, retail group executive at the company, admitted on a blog post on Thursday that a small percentage but still significant number of their customers were oversold on the promises of nbn speeds. The speeds vary due to a large number of factors, some of which are managed by retail service providers like Telstra. Other factors are controlled by nbn co. Russell said that where customers place their WiFi moden and how they use the Internet also play a part.

“We recently reviewed the speeds our customers are receiving on the nbn. While the vast majority are receiving the speeds they signed up for, we believe a small number of our nbn customers (approximately 1 percent) are not and we’re in the process of proactively contacting those customers to move them to a speed tier their nbn service supports,” Russell wrote. “In any case where we believe that customers may have paid for a speed boost they haven’t benefited from, we’ll be reimbursing the charges.”

According to Telstra’s half-year results, its nbn connections grew by 292,000 to 792,000 at the end of December. This means about 7,920 customers, or 1 percent of its nbn users, are not getting the speeds they were promised.

New customers who signed up for speed boost will have their speeds reviewed after the first month. If Telstra believes they are not getting the speed there are promised, the company will move them to the speed tier their nbn service supports and reimburse them for the fees they were charged.

The company added that it is actively participating in a conversation on nbn speed guidance and measurement coordinated by the Australian Competition and Consumer Commission. Last month, the ACCC announced that it would start testing and monitoring broadband speeds from telcos.