The nation’s biggest telco Telstra has revealed plans to start throttling data speeds on its customers’ mobile phones once they exceed their monthly quota, in an effort to avoid the so-called ‘bill shock’ phenomenon that can occur when post-quota data is charged in increments.

Historically, customers have received a certain amount of monthly data quota with their mobile phone plans, or even none at all, in some cases, but the popularity of data-hungry smartphones with video and multimedia capabilities has meant that some customers may have exceeded their quotas without realising it.

Rate-limiting has long been a feature of the fixed broadband market, and Telstra’s mobile broadband plans designed to be used with a USB dongle also use the feature — so that speeds are throttled to 64kps, similar to a dial-up connection, when a customer’s allowance has been exceeded.

In a statement released late last night, Telstra finance chief John Stanhope said customers deserved to be able to enjoy the full capabilities of their Telstra mobiles on plans without fear of a large, unexpected bill. “By slowing data speeds once a customer has exceeded their data allowance, and not charging for the extra data, customers stay connected without fear of a hit to the hip-pocket,” the executive said.

Customers will also be able to top-up their quota directly from their handsets, and will also receive “near real-time” SMS alerts when their data quota hits 80 and 100 percent.

In addition, Telstra is also planning to improve the way it notifies customers travelling overseas of their data usage. Another common way that mobile phone users receive large bills is if they are roaming onto another carrier’s network while in another country. “To help them stay on top of their data usage, Telstra is introducing regular SMS alerts that provide advice on the volume and costs associated with data they are consuming,” said Stanhope.

The move was immediately welcomed by communications regulator the Australian Communications and Media Authority, which claimed credit for the Telstra initiative, stating that it came on the heels of its Reconnecting the Customer project to improve the way Australian telcos dealt with their customers. ‘The ACMA is highly gratified that the RTC strategy is already bearing fruit,’ said ACMA chairman Chris Chapman.

The regulator added that Telstra’s announcement was consistent with the type of pro-active industry responses that the initiative was intending to provoke and that it looked forward to seeing what additional measures telecommunications companies will introduce to assist their customers. The report from the ACMA’s initiative is due next Wednesday 1 June.

Image credit: Lars Sundstrom, royalty free

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1. PointZeroOne
   Posted 25/05/2011 at 10:08 am | Permalink | Reply

   Very cool move by Telstra

   • Simon Reidy
     Posted 25/05/2011 at 11:01 am | Permalink | Reply

     Excellent news. I’ve gone over my 3GB limit a couple of times (while tethering) as their current data usage checker (either via the website, mobile app or 3rd party apps) can be out by as much as 8 hours. Has made it near impossible to keep an eye on . If the bit about “near real-time” checking of data is true that will make it much easier to manage.

     I like the bit about being able to top up your data allowance too. That’s a feature I’ve wanted for ages, although I imagine it will be pretty expensive to add another GB or more.

     Anyway great news Telstra. The number one mobile network by a country mile.

     • Clytie Siddall
       Posted 25/05/2011 at 3:34 pm | Permalink | Reply

       When I bought the iPad2, I decided not to put a SIM card in it yet, since I’m stuck at home due to illness. (However, I got the 3G version, so I can put a SIM in and use it in hospital.)

       Having received it, I connected it to our home WiFi, and also experimented with tethering it to my iPhone. When I went to bed that night (and the WiFi turned off), my laptop happily tethered to the iPhone and sucked data through my 3G plan all night. When I got up the next day, my phone data allowance was nearly 400%.

       It wasn’t a good moment. ;)

       Luckily for me, Telstra kindly sorted the whole thing out. I have also sternly instructed my laptop to ignore any and all seductive offers of tethering, especially during the night when it doesn’t have the benefit of my advice.

       However, this experience brought home to me for the first time just how easy it is to blow your data allowance and end up with a huge bill. I’d only ever used a tiny fraction of my data allowance before, but one tiny change in circumstances and I blew the lot nearly four times.

       So I also applaud this change by Telstra. Mobile customers (heck, I only moved from the sitting-room to the bedroom) change circumstances all the time. Their network needs to deal with that more gracefully.

2. Sean
   Posted 25/05/2011 at 10:58 am | Permalink | Reply

   Amazing! Telstra is almost becoming a decent company. Seems they have come a long way from the days of The Three Amigos and treating customers with utter contempt.

   Plus it’s so nice to actually be able to use a 3G network that actually works most of the time.

   • Renai LeMay
     Posted 25/05/2011 at 11:08 am | Permalink | Reply

     “Plus it’s so nice to actually be able to use a 3G network that actually works most of the time.”

     Amen to that, brother.

   • Brett Haydon
     Posted 25/05/2011 at 1:47 pm | Permalink | Reply

     +1 to that.

     Travelling on an inner east/west Sydney bus I can predict with stunning accuracy the times and locations where the data gets overloaded with Optus. Works fine in the morning but come 4-6 I reckon I need this guy to get my information fix:

     http://www.time.com/time/video/player/0,32068,946148958001_2072036,00.html

3. NightKhaos
   Posted 25/05/2011 at 11:07 pm | Permalink | Reply

   Yay. No more $200 bills thanks to Steam deciding since my laptop is connected to the Internet I just NEED that 2GB patch for that game. ^_^

   The problem with a network that actually workies is that by the time I registered that Steam was doing something I didn’t want it to, and closed it, I had already dug through 900MB of quota. Whoops.