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  • News, Telecommunications - Written by on Wednesday, February 29, 2012 16:38 - 18 Comments

    Telstra NBN prices aren’t final: Conroy

    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.

    opinion/analysis
    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

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    18 Comments

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    1. Hubert Cumberdale
      Posted 29/02/2012 at 4:57 pm | Permalink |

      Conroy should not be defending Telstra or their shitty plans. He should just say “Competition works with the NBN, get a plan from an ISP that has better value plans.”

      • Posted 29/02/2012 at 5:23 pm | Permalink |

        That’s pretty much what NBN Co said about Telstra’s plans. On the day, I received a statement from them as follows:

        “There are now more than 100 plans in the market from different providers. They demonstrate that NBN is already making an important contribution to growing retail competition in telecommunications. Let battle be joined.”

      • Chris Watts
        Posted 01/03/2012 at 8:03 am | Permalink |

        Whilst I agree with that, I think Conroy was stuck in a politically hard place. The opposition was bound to latch onto Telstra’s terrible NBN product line as an example of NBN evil-ness. This was a pre-emptive strike in an attempt to blunt that forthcoming attack.

    2. ryan
      Posted 29/02/2012 at 8:51 pm | Permalink |

      The Telstra plans are an absolute joke, and just go to show how out of touch Telstra is with their customers.

      $80 for 5GB on 25Mbps plans? You could use that in less that 10 minutes.

      And as for including copper phone lines in the bundles, that is ridiculous. I dont know anyone who uses their landline for phone calls anymore, just some unlucky few who must pay line rental for their ADSL because they are connected via RIM or some other incompatible copper infrastructure.

      Telstra needs to get in touch with their customers, find what they want and how much they use the internet and offer realistic, competetive plans.

      • nonny-moose
        Posted 29/02/2012 at 10:33 pm | Permalink |

        i’m puzzled at how that one is a top range plan too. it’d want a pretty special packin to be top range given its only the 25 mbit tier and only 5 GB data. if theres nothing else packed in and thats it – thats actually pretty poor to middling value, actually. if its that price and theres a Tbox and access built in, for example, that would be a bit easier to swallow. but not this ‘deal’ as it appears right now, unless and until better data about where the value is comes up.

        definitely does seem like there are some parts internal to Telstra that are not yet up to speed, somehow?

    3. Tailgator
      Posted 29/02/2012 at 10:10 pm | Permalink |

      Interesting.

      1. Perhaps Senator Conroy is ‘molly coddling’ Telstra, while at the same time being aware of the negative impact that the outrageous Telstra plans will have in the MSM and the perception of the govt’s NBN policy?
      2. However there is still no excuse for the absurd plans they presented as their initial offering.
      3. If there is a conflict between the ‘old’ and ‘new’ guard in Telstra regarding plan structure and pricing then clearly the ‘old’ guard has won. And Kate McKenzie, as Group Managing Director, Telstra Innovation, Products and Marketing needs to either get with it or take a walk.
      4. I would much rather be complaining about Telstra using it’s substantial payouts from NBNCo to subsidize services than criticizing it for gouging customers by way of specious bundling packages and pricing ;-)
      5. Thodey’s argument that Voip wasn’t ready yet due to reliability and quality issues is pure BS. Even after 5 yrs of testing? Perhaps he is also of the ‘old guard’ looking for excuses to support the ridiculous plans that they have released.
      6. As for difficulties modifying internal billing systems! Didn’t they just spend hundreds of millions of $$’s on an upgrade? What a joke and an insult to the intelligence. Either that or waste of shareholder money. What’s the truth Thodey ??

      The upshot is that a leopard doesn’t change it’s spots. Telstra is still the dominant incumbent telco in this country and maintains it’s intention to maximize it’s profits and shareholder value, regardless of the cost to it’s customers. It’s simply a question of what it thinks it can get away with and where the cost/benefit line falls. It’s customers should apply the same degree of analysis to the services that Telstra offers and how it compares with other offerings.

      Still a massive fail by Telstra and one day their arrogance and miscalculations will bite them on the bum in a big way. (I hope ;-))

    4. Liron
      Posted 29/02/2012 at 11:03 pm | Permalink |

      The really bad thing about Telstra’s plan is they are locking you into paying for a fixed phone line while this is necessary, then, in a year’s time, when NBN turns on it’s voice port, they will provide your phone service over VOIP but still charge you fixed line rates for the line rental and for the calls too! Fifty cents a minute over VOIP y’all!

      Of course Telstra may release cheaper plans in the future. But you will have a choice: switch to a cheaper plan and be locked into Telstra for another two years, or keep paying the high prices until your contract ends and maybe see what else is out there. I bet I know what most people will do.

    5. Daniel
      Posted 29/02/2012 at 11:33 pm | Permalink |

      Telstra are doing this because they are milking money out of the situation that they are in.

      No different to what they have been doing in that past.

    6. Rowan
      Posted 29/02/2012 at 11:45 pm | Permalink |

      Like all bullies and predators, they do it because they can.

      No other reason – besides deluded visions of huge profit from the ensconced and the ignorant.

    7. Simon Reidy
      Posted 01/03/2012 at 1:10 am | Permalink |

      I think what Conroy unfortunately meant was “Telstra’s pricing is reflective of what you’ll get under Mr Abbott as the current Government isn’t final”.

      No pricing structure is final, but when you’re entering a brand new market and you’ve been paid $13 billion dollars to decommission your old copper network by the Government, in my mind that means “get people off copper ASAP and onto affordable fibre” given both Telstra’s copper and HFC networks are being decommissioned. Rather it looks like Telstra want to milk every last drop it can from both aging networks, and as everyone has pointed out these plans wreak of “playing it safe for an upcoming change of Government”.

      And “Top end” pricing? That’s really funny, because that’s not what I’m looking at. I’m looking at the type of broadband plans that I use to have to unwillingly sell to naive customers when I worked there last decade. Anyone remember their 256k ADSL plan with a whopping 200mbps a month for $30? This reminds me of that. The amount of bill shock that single plan generated while I worked there was an absolute disgrace and these low quota plans aren’t much better (the only difference being that I assume you are shaped to some ridiculously low “dial-up era speed” not charged per extra MB?). Either way, at those speeds, people will reach their qouta levels before lunchtime on day one, so their plans do indeed stink and are hardly high end.

      And the question has to be asked, even if Thodey didn’t personally oversee these plans, surely he at least signed off on them before they went public? So we can flame the CEO just as much as the time travellers from 1996, who must have created these pathetic excuses for “next generation” broadband plans.

      Fix them Thodey-Wan Kenobi, you’re our only hope..

    8. Jason
      Posted 01/03/2012 at 7:06 am | Permalink |

      the ones who nearly destroyed nbn credibility was internode with their $189 plans, the anti nbn group and the coalition were jumping for joy

    9. Vitman
      Posted 01/03/2012 at 7:52 am | Permalink |

      At least Internode has a decent support team and its in Australia not shafted off to oversease like Smellstra does.

    10. PointZeroOne
      Posted 01/03/2012 at 9:24 am | Permalink |

      The Telstra pricing is currently like this because it is a catch all connection type plans.

    11. David
      Posted 01/03/2012 at 9:51 am | Permalink |

      Why is Stephen Conroy apologising for Telstra? He has created a competitive market based on the NBN and if Telstra doesn’t want to play in it, that’s their loss.

      The problem is that Telstra can’t offer competitive pricing on its NBN plans and its ADSL plans. Its rivals have based their NBN pricing on competing with Telstra ADSL but if Telstra does the same it would be shooting itself in the foot by undercutting its own high-margin products with lower-margin NBN products. That makes no business sense.

      Expect these prices to stay in place as long as humanly possible – eg Telstra will keep signing ADSL customers and keep them on its copper until the day it is contractually obligated to push them onto the NBN. Telstra may be transitioning all its customers to the NBN but that doesn’t mean it’s going to be nice about it.

    12. Michael
      Posted 01/03/2012 at 11:39 am | Permalink |

      The new plans apply across all Telstra’s services.

      The “new” Bigpond cable Ultimate (100Mbps / 2Mbps) plans are now $100 / month for 200G (inc. upload) and a bunch of calls. Last month they were $78 a month without the “free” calls.

      It doesn’t look like much progress to me.

    13. Tim
      Posted 01/03/2012 at 12:18 pm | Permalink |

      Firstly, a typo in your opinion – ‘relatively suprised’ should be ‘surprised’ (sorry, I’m a teacher, I can’t help myself).

      I’m also wondering what the heck Telstra are doing by bringing out these prices. There are a lot of people on BigPond who are probably only there because of brand familiarity, it could be that they’re aiming strongly at this market. It could also just be that they haven’t quite got used to the new marketplace, with the NBN Telstra won’t have the stranglehold on rural/regional Australia that they used to.

    14. Douglas
      Posted 01/03/2012 at 1:10 pm | Permalink |

      And they’ll sell like hot cakes to the mums and dads of Australia, no matter the price.

      Just ask anyone working inside a company selling ULL how hard it can be to convince many older people to leave their trusted Telstra as their fixed line provider.

    15. Thrawn
      Posted 01/03/2012 at 2:26 pm | Permalink |

      Telstra basically wants to keep its cash-cow customer base across into the NBN world. It thinks it has the ability to do that. They may be right.

      iiNet has used the same cash cow DSL strategy for at least 5 years now. Notice that while iiNet used to have close to market leading prices, they’re way behind now. Their strategy of expansion is by capturing new customers through ISP takeovers. Whilst leaving existing customer base as cash-cows in place.

      Contrast with TPG strategy which continously needs to demonstrate value in order to attract new customers.

      But unlike Telstra, it seems iiNet sees NBN as an entirely different market and is very eager at competing on value again like the old days.




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