news The comparatively expensive National Broadband Network pricing plans released by Telstra this week aren’t the telco’s final prices, Communications Minister Stephen Conroy said yesterday, with Telstra to release more packages in the near future.
On Monday this week, following its move to sign up to NBN Co’s wholesale contract, Telstra released its commercial pricing plans for customers who have access to the NBN fibre infrastructure. As Telstra remains Australia’s largest telecommunications company with a dominant market share, the prices had been highly anticipated.
However, analysis conducted by Delimiter and other organisations showed that the telco’s plans were significantly more expensive at the low and high-end than other plans available from rival providers such as Optus and iiNet. It appears that Telstra had attempted to unify pricing across three different types of fixed broadband networks — the existing copper and HFC cable networks and the new NBN fibre.
In addition, the company was severely criticised for forcing customers signing up to the NBN fibre to bundle a traditional fixed telephone line over the legacy copper telephony network with their next-generation fibre broadband plan, despite the fact that the NBN is designed to carry telephone calls as well as data traffic. No other telco has made this requirement.
However, speaking at a nationally televised press conference with Prime Minister Julia Gillard yesterday (transcription available here), Communications Minister Stephen Conroy gave some hope to Telstra customers.
” … Telstra’s prices yesterday – which despite some of the ill-informed commentary, is actually just the top range of prices,” Conroy said. “They have more plans to come — they are guaranteeing in their press release that they will maintain their pricing for people who just want to use the telephone and who don’t want broadband, that’s in their press release.”
“But yesterday’s announcement by Telstra was simply their top range prices as they begin to get NBN-ready. It’s not their final prices and they’ve said publically and repeatedly that there are more packages to come.”
According to industry scuttlebutt circulating around Australia’s telecommunications scene this morning, Conroy may be correct regarding Telstra’s prices.
Delimiter has heard from several industry sources that there is dissension within Telstra’s executive ranks regarding the company’s pricing plans. The current swathe of plans are based on the principle, successfully argued by some figures within Telstra, that the company should aim for unified pricing plans across its various fixed broadband offerings.
However, there is also talk of a more modern executive contingent within Telstra’s ranks, which is pushing for more market-sensitive NBN plans that would allow Telstra to more aggressively attack rivals such as iiNet and Optus in the fledgling NBN space.
It is believed that Telstra’s decision to require customers to maintain a copper PSTN telephone line is partially based on the difficulty of modifying the company’s internal billing platforms to cope with telecommunications connections which are not tied to a copper cabling. However, the company has also had a strong historical aversion to the Internet telephony technology which will be used to provide telephone connections over the NBN fibre.
In May 2011, for example, Telstra chief executive David Thodey said he did not believe Telstra would launch an Internet telephony product soon, stating that although the technology had been in place for half a decade now, “we don’t think the quality and reliability is there. We could bring it to the market tomorrow, but we don’t want to.” When Telstra does launch Internet telephony to the consumer market, it is believed it will dub it as “digital voice” rather than the more traditional Voice over IP or VoIP label.
Telstra had better release new NBN pricing plans at some stage. Because their current ones stink ;)
To be honest, I have been relatively suprised by Telstra’s NBN plans released this week. Under current CEO David Thodey, Telstra had appeared to become a much nicer, customer-focused company. Less restrictions, better pricing, simplification and better customer service; all of these things have been arriving gradually under Thodey’s rule. If I had to guess, I would say that this week’s pricing release wasn’t really overseen by Thodey directly. There’s just so much of the bad old Telstra in there that it’s not hard to believe that some of the ‘old guard’ at Telstra were behind these plans. Hopefully, the big T can do better next time around. It’ll have to — or else it will be facing a drastically reduced NBN market share.
Let’s not forget that many Telstra broadband customers have been locked in to the telco for many years due to the difficulty of churning off HFC cable broadband. The NBN will change all that — churning will be an easy matter for any customers. In this environment, Telstra needs to make a strong argument for why customers should remain with it. To my mind, that argument should revolve around competitive pricing as a fundamental principle (to remove it as an argument), with mobile and entertainment as the value-add.
After all, Telstra has the best mobile (Next G) and entertainment (Foxtel) offerings on the market. It should focus on equalising in fixed broadband and then lock its customers in with the juicy extras which nobody else can offer.
Image credit: Telstra