Telstra declines “public battle” with customer Internode


The wholesale arm of Australia’s biggest telco Telstra has declined to engage in what it described as a “public battle” with its customer Internode, in the midst of delicate negotiations that are slated to affect Internode’s ADSL broadband pricing around the nation.

Late last week Internode managing director Simon Hackett again speculated that Telstra Wholesale was giving some retail internet service providers better deals because they hadn’t built out their own competitive broadband infrastructure as some, like Internode, TPG and iiNet had.

A number of ISPs — such as Dodo, for example — have eschewed the widespread DSL multiplexer (DSLAM) rollouts which some like Internode have pursued over the past decade, preferring instead to use others’ wholesale infrastructure. Dodo in particular is known for its low prices in the broadband marketplace.

In response, a Telstra Wholesale spokesperson didn’t deny the claim, but said it wouldn’t discuss it publicly.

“Telstra Wholesale is in negotiations with many of our DSL customers. We are being flexible and commercial and doing the best we can to accommodate their requirements,” they said. “We have completed a number of deals with our DSL customers and are nearing finalisation with several more, so continue to make good progress in a very competitive market.”

“We are also in negotiations with Internode but we are not interested in a public battle on what is a private and confidential negotiation.”

A number of other telcos — such as Optus and iiNet — also offer wholesale access to their ADSL infrastructure in telephone exchanges. Uptake of 3G mobile broadband services is also increasing at the moment, with some customers seeing the mobile networks as an alternative to fixed-line ADSL or HFC cable broadband.

Optus has also opened up its 3G mobile broadband network to rivals, although Telstra has not done the same with its Next G network.

“Broadband is a very competitive market and Telstra Wholesale is committed to making sure that its commercial offers are attractive to wholesale customers and competitive to the market,” said the Telstra Wholesale spokesperson.

Image credit: Telstra


  1. “We are also in negotiations with Internode but we are not interested in a public battle on what is a private and confidential negotiation” – I’m sure Telstra would like to keep these deals private so Internode can’t compare what they’re being charged vs other ISPs. As an Internode customer, I just hope they sort it out and the $30+ premium for getting internet via Telstra is reduced or eliminated.

    Those quick to jump to the ‘well go with another ISP’ response, remember there’s not always another option in all areas.

  2. So Telstra is discriminating against those who choose to build Competitive DSLAMS? – “a Telstra Wholesale spokesperson didn’t deny the claim,”
    So this is anti competitive monopolistic behaviour , is it not..? The ACCC should throw the book at them.

    • Wholesale ADSL2+ is not a monopoly product, there are multiple suppliers of wholesale ADSL2+, and as such it is NOT a declared service and does not come under ACCC jurisdiction, if Internode do not like the pricing regime that Telstra offers them then use other ADSL2+ wholesalers.

      If the exchange spread of the ADSL2+ wholesalers is not large enough for Internode they could ask their main wholesale partner SingTel Optus the second largest Telco in Australia why they have STOPPED their exchange DSLAM rollout in 2009 and are keeping their hands firmly in their pockets treading water waiting for the taxpayer bankrolled NBN.

      Comments in this forum ask Telstra to keep their wholesale pricing the same for all ISP’s assuming it is indeed different, it is only ‘speculation’ on Internodes part that it is, but hey that’s good enough for it to become fact, no such requirement on the likes of Optus or iiNet/PowerTel to divulge their wholesale pricing uniformity or not across their ISP customers.

      But that’s ok, the blatant hypocrisy in such comments is wonderful!

  3. Again another article which is bias towards internode and against telstra , i wish telstra should just shut down its adsl2+ wholesale , and the competitors can blame internode for it.

    ACCC should have the balls and not listen to these isps who are more concern for profit then customers.

    • i couldnt agree more Henry, well said

      personally i like to see internode squirm like the filthy ground worm it is, much like the fanatics who support this so called business

      if this is true, then sell to all isp’s at the price internode pays. that will make them popular ; )

      OK let the attacks begin

  4. Henry,

    You shouldn’t comment unless you have knowledge on you subject matter.

    It’s not bias… Just because the FACTS point to a conclusion that show one party in the wrong.

    Telstra Wholesale are charging MORE for connection via wholesale (which doesn’t include internet connection) Then Telstra retail are charging for customer connection (which include internet!)

    Every company is concerned about profit otherwise they would be a non-for-profit which no ISP is! Internode ARE concerned about their customers which is why they have keep them updated on the progress and have not dropped their prices below what would allow them to give good quality service.

    Telstra would be in breach if they shut the wholesale system down as this is a requirement via the ACCC.

    • Gee Henry, I wonder why other ISP’s have to buy ADSL1/2/2+ from Telstra? Possibly because Telstra wont give them any space in the exchange perhaps? Why anyone would stick up for Telstra is beyond me. They have always been a bunch of greedy snakes who serve only themselves. I thought the price that wholesalers bought ports for was set and monitored by an outside body. I cant beleive Telstra can get away with this rubbish. At least let them put their own equipment in.

      • Gee Peter, I wonder why Australia’s second biggest Telco and ISP SingTel/Optus have stopped their exchange rollout in 2009? – perhaps Internode should direct that question at their main wholesale partner for ADSL2+ and Naked DSL products.

        While they are at it they could also ask SIngTel/Optus if they they get charged the same wholesale price as Optus’s other ISP clients, and if they don’t (assuming they get a answer lol) take it up with the ACCC, or take it up with the ACCC anyway and ‘speculate’ they are not getting a good enough deal because they are rolling out their own exchnage gear in competition with Optus!

        Perhaps Internode could also ask the ACCC why TPG which has one of the largest DSLAM rollouts in Australia does NOT wholesale ADSL2+ at all, oh that’s right wholesaling ADSL2+ is optional and is a corporate COMMERCIAL decision made by a Telco based on what they consider is a fair rate of return based on their cost!

  5. quote from article
    “A number of other telcos — such as Optus and iiNet — also offer wholesale access to their ADSL infrastructure in telephone exchanges. Uptake of 3G mobile broadband services is also increasing at the moment, with some customers seeing the mobile networks as an alternative to fixed-line ADSL or HFC cable broadband.”

    There is other competition , why dont internode use optus, iinet who wholesale adsl

    liek i said the isps are thinking of profit not the the customer

  6. Henry, you are really an idiot. Have you ever used Optus 3G or heck even Three’s 3G network? Assuming you can even connect the speeds are slower than dial up in congested times. Telstra’s infrastructure was paid for by the tax payer, sold off by governmental idiots who later realised the mistake and were forced to push wholesale leasing so that Telstra didn’t continue to monopolise the market. And telstra did monopolise the market..just ask people who have received $1000 bills from Telstra for excess usage charges over the years.

    As an Internode customer this stinks to high heaven. I am regional and have no option but to use Telstras ADSL 2+ network which is great speed wise, but the pathetic plans that Internode can offer compared to the all you can eat Gigabyte plans in the city is a grossly unfair 2-tiered system. All because of TELSTRA.

    • Have you asked Internode why they have not enabled your exchange with their own gear? – probably not commercially viable, best let sucker Telstra do it then complain about the Wholesale prices at the ACCC.

  7. Henry, I’m stuck on a RIM (ADSL1) which is bound to Telstra-only ports. Competitors aren’t allowed to install their equipment in the RIM which means there is no other competition available for me.

    The best I can do is move my Internet service to Telstra – which for me is a poor service (Customer support, Value-added Services, etc.).

    Internode offer, for me, the best service but because of Telstra’s monopoly I have to pay a higher rate for it.

    Does that sound at all fair to you?

    Why the ACCC has allowed this to go on for as long as it has is a f’ing joke.

  8. If I remember correctly, Telstra aren’t forced by the ACCC to even wholesale their ADSL2+ offering, unlike ADSL1. That was the whole premise of Trujillo not wanting initially to open Telstra’s ADSL2+ network for wholesale access in fear that it would become a declared service. When Conroy and ACCC chairman Graham Samuel said that they wouldn’t do such a thing, that was when Telstra’ opened up it’s ADSL2+ network to wholesale customers with the aim of getting a ‘commercial return’. Yes, Telstra did charge an exorbitant amount to wholesale customers originally to access this very network, but these customers like iPrimus still managed to offer plans that were still far better value than BigPond. Their wholesale pricing seems to be getting cheaper (Kudos where credit is due) as evidenced by some ISPs who use Telstra’s ADSL2+ network are offering their customers higher download quotas for a cheaper price (Think Internode with 50GB for 49.95…It was still cheaper than BigPond’s offering up until 2 – 3 months ago) Only in the last few months has Bigpond actually become competitive! I can empathise with Internode with their current predicament but I don’t think the way in which they are engaging in this ‘public battle’ with Telstra is the most productive thing to do, given the aim of getting a ‘commercial return’ on Telstra’s part. A negotiation is exactly that…so the boffins at Internode should be doing that instead of hurling abuse and threatening to go to the ACCC just because they can’t (for the moment) come to an agreement. Other ISPs did the negotiation thing quietly without too much dramas and their customers are reaping the fruits of their labor.

    One other thing…beyondtool, you said “the pathetic plans that Internode can offer compared to the all you can eat Gigabyte plans in the city is a grossly unfair 2-tiered system. All because of TELSTRA.”

    The ACCC was against the idea of Telstra having proposed a geographically averaged monthly price of $30 per line, instead of prices that ranged to over $60 in regional areas, $6.60 in CBDs (Zone 1) and $16 for metro (Zone 2).,telstra-local-loop-access-prices-tipped-to-rise.aspx

    “According to the ACCC, the ACT (Australian Competition Tribunal) “comprehensively” rejected Telstra’s proposed price for the ULL. “The Tribunal rejected Telstra’s appeal…on seven major grounds and affirmed the ACCC’s decision of 25 August 2006 to reject Telstra’s price undertakings,” the ACCC said in a statement. Telstra had proposed a geographically averaged monthly price of $30 per line.”

    This was when Telstra tried unsuccessfully 3 times to get this through the courts so that people in regional Australia could have fairer and cheaper access to broadband without the current system we have now where we have 3 zones with 3 different sets of pricing. Though Zone 1 and 2 are basically the same (I think Telstra calls these zones City/Metro), Zone 3 is ‘Regional’ where those living in those areas are stuck with higher pricing. Internode and iPrimus average the prices of their wholesale Telstra offerings to get a price that is somewhere in the middle between Zone1/2 and Zone 3. Others like Dodo and gotalk simply charge a ‘metro’ and ‘regional’ price for their offerings. You can blame the ACCC for this blunder (they don’t actually seem to do anything productive for the consumer i.e. bringing the supermarkets and banks into line for predatory behaviour, petrol pricing, etc.)

    With that in mind you can also understand why Telstra’s competitors would be against the idea of rising ULL pricing because if you haven’t noticed, not many of them actually build dslams/msans out in regional areas for this very reason…the high pricing of ULL in these areas. We can all agree that all Telstra’s competitors (including Telstra themselves) are in the business to make money…hence why they only seem to invest in Zone 1/2 because of the cheap ULL pricing (with the exception of a few – TPG, Telstra (obviously) and to an extent iinet). The cheap ULL pricing in Zone 1/2 is the reason why these competitors exist in the first place. If the prices went up, they’d all be up in arms (Optus especially) because their profit margins are under threat…and they still are! It’s a shame that none of these companies mention any of this because it puts a whole lot into perspective.

    When Telstra decided in 2006/2007 to offer it’s ADSL2+ network for wholesale access, all their competitors (except TPG) lobbied for Telstra’s ADSL2+ network to become a declared service (most probably so they can have access to the network at a regulated cost without actually investing in anything). In 2010, this is still going on (albeit much more quietly with Internode and to an extent, iinet doing most of the lobbying).

    Nothing has changed, except that iinet and TPG (moreso TPG) actually invested in a continuing rollout of DSLAMs that has resulted in these two winning over customers eagerly waiting to get away from Telstra. Inevitably, these two are now #2 and #3 in terms of having fixed broadband customers respectively. The results speak for themselves…TPG being the quiet one and actually getting things done in the background without making noise like Internode are doing at the moment, has managed to snag a hell of a lot of customers away from Telstra and it’s other competitors without relying on Telstra Wholesale at all. Why Internode would want to rely on Telstra Wholesale to deliver a service they could offer themselves (considering the successes of it’s competitors TPG and iinet) is beyond me, but that’s the decision that they make and it may cost them in the long run…who knows.

    For me personally, I’ll go with the ones who take the time to invest in my area.

    The point of this long-winded post was put into perspective the situation as I see it, so as to bring a balanced view to the debate. There is a hell of a lot of comments being left on forums that is either anti-Telstra or anti-Internode in the last few weeks that this has been going on. Most of them are biased and usually uninformed and I hope people take the time to research both sides of the story before posting comments which don’t add anything to the debate at all.

  9. Wow Henry you have no idea buddy.

    Node already wholesale ports from optus at a price which allows them to offer great deals,

    Issue is telstra wholesale are charging more for a wholesale port then if you are to get a connection direct from big pond.

    Causing customers to go directly to telstra. It’s called monopoly and it’s illegal.

    Very dirty business tatic, they know by the time the accc get around to issuing a fine they would of already made 6 times the amount of the fine plus they have a lot of new customers to rip off.

    • ‘Issue is telstra wholesale are charging more for a wholesale port then if you are to get a connection direct from big pond. ‘

      How do you know? – what ‘wholesale port’ charge are you referring to in relation to which BigPond plan? and why does this compare unfavourably to other ADSL2+ wholesalers port charges who also retail ADSL2+ plans as ISP’s?

  10. I’m just a few kms from Brisbane CBD and I’m stucked into a poir gain system thanks to Telstra. I hate them and I hope they go bankrupt.

  11. Come on ACCC make Telstra accountable and force them to sell their ADSL2 at the SAME price to all isp’s.

    I am sick to death of TELSTRA holding out on everyone including the public on hardware that was paid for by the australian people.

    • If you mean by the ‘Australian people’ Telstra shareholders who paid for the ADSL2+ hardware rollout in exchanges then you are right.

      • “If you mean by the ‘Australian people’ Telstra shareholders who paid for the ADSL2+ hardware rollout in exchanges then you are right. ”

        Sorry countless $$ in government money paid for the network not shareholders. Not even getting into the fact that shareholders don’t put money into a business they general take it.

        Not sure who you are trying to misinform, But i hope most have enough sense to see through your BS.

  12. I can’t wait for the NBN to roll out in my area so I can have fast internet and phone services supplied by them and I can ditch Telstra forever. I hope they wither and die the greedy, cheating, mongrel low-lifes. They’ve held this country to ransom for far too long with phone and internet services, thanks to the Howard government.

  13. If Internode are having problems with Telstra Wholesale what hope is there then for the small ISP’s like Adam Internet ?
    Adam Internet once upon a time used to be a market leader but now unfortunately has been swamped by lower prices and larger quota plans by most of the larger ISP’s like BigPond, TPG etc now Adam has lost that leading position and unless things improve Adam will soon start losing customers in droves.
    When an ISP requires you to enter into a twelve month contract to change your internet plan with them I think the writing is on the wall.

    • Adam Internet was never a market leader, it sells into limited areas of only one of Australia’s least populated states, South Australia, weird definition of a ‘market leader’!

  14. It would seem that many people commenting on this subject matter make broad sweeping accusations with a pre-conceived bias, based on generalised assumptions that are void of fact.

    Prior to commenting specifically on the issue of the cost of supply, we need to know definitively if T/W is selling services to Bigpond/ Telstra @ a lower rate than that supplied to other carriers/ re-sellers, (This being the crux of the issue), rather than simply claiming it to be the case & having a “hissy fit”. If it turns out that Telstra/ Bigpond are simply retailing services at very marginal rates to retain or gain customers, I fail to see where the problem is.

    One of the benefits Telstra has in terms of the size of its customer base is that it can effectively cross subsidise certain sectors of its customer base with those that generate higher returns. If this legitimate business tactic makes it harder for competitors due to; lack of infrastructure investment, reliance on T/W or smaller market share, than that’s just too bad. If their business model & or liquidity reserves can’t support increased competition from Telstra or reduced profit margins than its time for them to have a serious re-think.

    I understand the position that the likes of Simon Hackett & co are arguing from, however the industry has become very competitive with ever reducing margins. If in order to survive, you need to rely on the incumbent being nice along with Fed Gov’t & Accc intervention every time things don’t go your way; your business model is flawed. That unfortunately is the reality of doing business. This point has been made plainly obvious on numerous occasions within the Aust commercial aviation industry ie; Ansett & Compas 1 & 2 being the 3 most prominent collapses.

    As for the comments regarding; “hardware that was paid for by the australian people”, if you want to adopt such a simplistic viewpoint then, the Australian people also sold the hardware for a tidy sum.

    Whilst under Gov’t ownership 100% of the profits were either re-directed back to improving & expanding the network or siphoned off by the Fed Gov’t & re-directed to other areas ie; defence, education & health etc. Yes, the Aust tax payer effectivly funded Telstra, however much of the monies loaned to Telstra over the years that they were under Gov’t control were loans that were repaid with interest @ commercial rates. Yes we did own it, but also sold it & now some people have the ordasity to complain & blame Telstra. At the time of the initial sale many within Telstra advised against it, go figure.

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