Telstra dumps Naked DSL proposal


news The nation’s largest telco Telstra has confirmed it will not launch naked DSL as a commercial offering, despite conducting a 15 month trial of the product and rivals like iiNet boasting more than 130,000 naked DSL customers.

The company kicked off a trial of naked DSL services in early June 2010, stating that it would conduct a two-year pilot of the services. Although naked DSL, in which broadband is sold without a bundled analogue telephone line, has been offered by rivals like iiNet, Internode and TPG for years – iiNet had some 131,000 naked DSL customers as at the end of June this year – Telstra has so far avoided offering such a service, continuing its practice of requiring customers to bundle telephony with their broadband. The trial marked Telstra’s first move to dip its toe in the naked DSL market.

In a post on Telstra’s customer support forums this week, one Telstra customer, ‘Paul’, wrote that he had been involved in the trial since July 2010, but had not been contacted by Telstra for his feedback on the experience. He enquired whether Telstra would offer a commercial naked DSL service after the trial was completed in July 2012. The response from Telstra employee Gareth (labelled online as a ‘thought leader’ for the telco) was swift.

“… there are no plans currently to extend the pure dsl trial to a commercial offering,” Gareth wrote. “Once the trial expires, the credit will no longer be applied. I do thank you all however for your participation. I could go into detailed reasons why we won’t be progressing to commercial launch but I think this thread adequately covers nearly all of the reasons for the cessation of the trial.”

Another Telstra employee, Ben (although not an official Telstra spokesperson on the forum), had noted earlier in the forum thread that it appeared as if the difference between incorporating the cost of a landline into a naked DSL service versus simply charging for it alongside normal ADSL broadband would be negligible on Telstra’s plans, and that having a PSTN service made troubleshooting line faults much easier for Telstra. Others on the thread noted it made sense for Telstra to include a PSTN service in its bundled plans, which see telephony, broadband and other services such as mobile broadband or Foxtel pay television combined into a single plan.

It is believed that unlike the systems of rival providers Telstra’s current billing system does not easily accommodate broadband being allocated to a customer’s account without an associated phone line for reference (that phone line does not have to be with Telstra), with the problem having come about due to the historical nature of Telstra’s systems being based around telephone services on its copper network. Gareth wrote that the naked DSL trial had been carried out through Telstra applying credits to the list of customer accounts on the trial.

He noted that the transition for Telstra customers off the naked DSL trial and onto normal plans could consequently be “messy”, and encouraged customers on the trial to message him directly through Telstra’s support forums to assist with the transition.

“In terms of gathering feedback … I think the optimal method is to private message me here (given the points noted above) and I will digest, read and respond (if I don’t get flooded) and make sure its accounted/mentioned in the review internally once the exit is complete,” he wrote. “My strong recommendation still is however to jump the gun prior to the trial’s end, and switch to one of our great value in-market plans which is fully supported by the business.”

Gareth’s comments come in stark contrast to a statement made by a Telstra spokesperson in response to a media enquiry on the issue over the weekend. “Like with any trial we’ll make a decision at the conclusion and advise customers accordingly,” they said. “[The] trial is only half-way through.”

What a total cop-out by Telstra. To be honest, it sounds as if the company was never really serious about its naked DSL trial. It doesn’t appear as though it contacted all of the customers on the trial to get feedback on the initiative, and now, nine months before the whole thing is due to wrap up, Telstra is already encouraging those on the trial to switch back to ‘normal’ broadband.

Meanwhile, rivals like iiNet continue to bolt on naked DSL customers like nobody’s business. What does Telstra find hard to understand about the fact that some 131,000 Australian households/businesses have already signed up for a naked DSL service – and that’s iiNet alone? Presumably there are several hundred thousand more naked DSL customers signed up through TPG, Internode, Primus and so on.

This decision by Telstra – and its ongoing failure to follow iiNet and Internode and launch internet telephony options, which are also increasingly popular in the Australian telecommunications market — stinks of an attempt to continue to lock customers in to its fixed-line telephone world, with high rates and value-added bundles. Frankly, we think it’s not serving customers – and Telstra could do better. The company should be looking to the future and leading the market — not holding its customers back.


  1. Typical Tel$tra not surprised.

    Now just wait for the wave of Telstra apologists to arrive.

  2. Nothing new to see here.

    Telstra still don’t provide an a process for competitors to transition from DSL to Naked DSL (e.g. remove two jumpers) and instead expect the service to be disconnected and reconnected, resulting in up to 4 weeks downtime.

    Telstra killed the successful trial to extend the reach of ADSL in country areas and instead promoted NextG as a better solution. Bonus points for observing that competitors don’t have access to NextG infrastructure.

    • Hi Matthew,

      One data point for you. Telstra Wholesale, only a week or two back, released a process to wholesale customers to do LSS to ULLS migration (i.e. removing those jumpers you mention). Hey, it only took at least four years of industry demanding it (while being told no demand existed).

      It was lobbed over the fence to us with almost no documentation and with no warning, in a manner that smacks more of trying to meet an ACCC deadline about providing the facility than anything related to actually providing what we asked for because we asked for it.

      But, hey, at least its there.

      In our case (i.e. at Internode), It’ll take us a while to work that into our provisioning systems (see the abovementioned lack of notice about releasing it), but we’ll be offering it to our customers (e.g. a path from Internode Easy Broadband bundles to Internode Easy Naked with an optional phone number port into NodePhone) as soon as we can.

      Simon Hackett

  3. Why would Telstra need to provide a ULL service? ULL is applicable to ISPs because it allows them to bypass a PSTN interface to Telstra which would incur a cost to the ISP. ULL would allow the provider to provide broadband at lower cost, and typically an inferior grade voip service.

    The situation isnt exactly symmetrical, it is questionable as to whether Telstra/Bigpond customers would have considerable savings on ULL vs. traditional Telstra Broadband.

    In essence, an ISP can offer a naked broadband service + Telstra POTS, what used to be called Spectrum Sharing Service (SSS), however ISPs have chosen to opt for a lower grade VoIP solution and hence Naked DSL was formed. There are certainly options available to competitors and ways for them to reduce their primary costs.

    One possible driver behind Telstra wanting to demo Naked DSL is to see if they can eventually decomission the PSTN, its not ‘what you think’ by the way, they are not approaching this from a market strategy or production position, as I’ve stated, they operate diferent from ISPs and naked DSL have different meaning to them than say TPG.

    The error in your claim and the irony is that if Telstra successfully deploys ULL, it would mean that they will begin moving everyone off the PSTN, and force people into poorer ISP quality VoIP services. This means that Telstra will save in operating cost invovled in PSTN upkeep.

    If Telstra was capable of decomission the PSTN and implementing Naked DSL, they would have done it long ago, and saved a bundle per financial year, however the savings would probably not flow through to the consumer for some time, however the consumer would have a poorer voice service.

    • Wow! What 2nd rate VoIP service did you try? When I moved house, I was shafted and screwed, whilst we waited for ages as Telstra and Optus fiddled with themselves to provide the line (the line in the house was already there). And then we were given a line in which we were told “No number portability for you! Take what your given!” by lovable Telstra. Probably the attitude that has made Telstra anethima in our house!
      Luckily we were with a 1st rate ISP who cares about their customers and through the whole process they were wonderful. I am with Internode and they had provided me with a Nodephone service. We had to utilise a 3G data service through a double NAT that 3 Mobile utilises for pre paid. Whilst Optus and Telstra fiddled, 3 and Internode provided us with flawless connectivity till the line was connected. When we did not get to keep our known number due to Telstra’s bastardry and Optus’ complete lack of balls to act because we are not a business, we opted to go Naked DSL. I set the codec to G711 for good quality sound and we have not looked back. Nodephone provides us with 2 virtual lines (when one line is busy the other still can be used) which Telstra’s PSTN has never offered. Nodephone might not be the cheapest VoIP on the block, but as a service for our telephone, it has saved us a hell of a lot of money (the $10 credit goes so far on their cheap rates), top notch service and a Customer Care that I have not found with any other company yet. It has so impressed a number of my friends they have taken it up on a number of other service providors they have for Internet and they love it. It even works well on 3G connections. It even worked flawlessly on a faulty cable that one leg of the line had been cut at my friends house. No PSTN, DSL was dribbling in about 60Kbs, but VoIP worked flawlessly as we reported to Telstra the PSTN was dead but we talking via VoIP to them on the same line. they were stunned and had someone out to fix the line in 24 hours.
      I suggest you revist VoIP with a QUALITY VoIP provider before writing off VoIP as substandard.

    • if Telstra successfully deploys ULL, it would mean that they will begin moving everyone off the PSTN, and force people into poorer ISP quality VoIP services

      Where do you get this information from? Do you work for Telstra?

  4. I was on the trial and never contacted about the service, however I had to contact Telstra each and every month to get my bill corrected. I got sick of it and exited the trial.

    As I am in region 3, I am locked into Telstra equipment until NBN arrives. Then I will be Naked and obviously not a Telstra customer – thank god!

    Why can’t Telstra see that a reasonable number of people (and a large number of under 30s) do not want or need a PSTN service? Telstras argument is always that the cost of maintaining the line is built in to a Naked service “so why shouldn’t you pay for it”? The answer of course is that Naked subscribers DO pay for the ULL cost in the price of their service, just as PSTN users pay for the line cost – even if they don’t use ADSL.

    • You have to understand that while an ISP is small it is easy to change, Telstra is large … for it to make a ‘product change’ it costs tens – hundres of millions.

      Having said that, if you are not satisfied with voip and you want a PSTN line, then ask your ISP and see if they will provide that for you…i think you might find its not as simple as that, an ISP has to decide on what business model it wants.

      As Ive stated, Telstra or Optus does not operate the same business as ISPs, but there are people who continually fail to understand this , this article is a good example.

      ISPs only operate DSLAMS, and youve been in an exchange they comprise of just a small fraction of the equipment in there. A DSLAM is incredibly flexible for what it can deliver and is lucrative, and can be installed in areas that are most market strategic to the ISP, and offer a wide variety of services. Telstra does not have this option, they have a large PSTN network, and providing Naked DSL probably works out to be unprofitable for them, if ISPs want telstra to provide naked DSL, then why dont they build DSLAMS in every exchange (even the unprofitable ones) and offer an alternative to Telstra Naked DSL? Obvious they wouldnt do that.

      • “Having said that, if you are not satisfied with voip and you want a PSTN line”

        If you read my post you would see that I have PSTN line and I do not want it. I have been using Voip exclusively for calls for years.

        “they have a large PSTN network,”

        Not when the NBN is implemented. Eventually the PSTN network will be redundant.

        “Naked DSL probably works out to be unprofitable for them”

        Because they are not hungry enough yet. But I would bet the family jewels that they will be offering it when they no longer have the dominance of the copper.

        I know quite a few people who have Naked PSTN, so why can’t those like me get Naked Adsl?

  5. The madness of the Telstra ‘Naked’ ‘Trial’ is that Telstra never turned off the dial tone.

    It was just another excuse to offer a retail offering (discounted phone+broadband) that fails any rational imputation test against underlying Telstra Wholesale ADSL+line rental costs.

    i.e. it looked to be what it was, and nothing more – a way for Telstra to trial undercutting its own retail bundled pricing to test the market sensitivity to price.

    There was no ‘technology’ involved. Despite being called (laughably) ‘Pure DSL’, again, the dial tone was still there ( just configured to block outbound calls ‘cept to 000).

    I’m guessing that perhaps Telstra are finally realising that calling it a ‘trial’ doesn’t stop it being in such flagrant inconsistency with its wholesale pricing model (e.g. compare it to the wholesale ‘rate card’ sample released by Telstra in the context of the SSU of late) that they ran out of ways to bat their eyes at the regulator and say “oh, I know its far below the wholesale access cost for the port alone, but its a trial, so we claim thats ok, even when we agree that it isn’t”.

    • Thanks for your post Simon that surely clears things up.

      So this appears to be a non story at all.

      • can you explain how would an competitor know it wasnt an trial

        anothert reason the accc needs to get hard on the competiion

    • Simon,

      What’s the difference between removing the dial tone entirely and simply removing PSTN call functionality in software? It acheives the same thing for the user, still leaves an FNN and all the associated testability associated with the line, and is vastly easier to record, program and assure later. The PSTN service also provides a wetting current that the DSLAM port does not, which protects the integrity of the electrical circuit.

      Honestly, I fail to see what pulling the jumper off the PSTN switch LI would achieve in the face of those benefits, so your objection really does seem to be grasping for something to complain about.

      In regards to whether they chose to offer the service configuration (the one thing I agree with in your post is that it’s not a “technology”) or not, that’s their call, and nobody else’s. I have no idea if your paranoid claim about it being a good way to duck the ACCC for a while is true or not, but if so – they got away with it, and as usual you’re just complaining about your lot in life.

    • Interesting, and maybe Simon could answer this, if it is to do with Govt. regulation. I am on one of his Internode Naked Ultra services. I have NU tone on the line if I plug in an analogue telephone onto the pair. I found nothing works except 000 (triple zero) calls. It would seem that even Optus provides a PSTN componant to an ULL, even if it is restricted. So it may be that in reality there is no real “Naked” service in Australia.

  6. “the difference between incorporating the cost of a landline into a naked DSL service versus simply charging for it alongside normal ADSL broadband would be negligible” – Telstra

    Translation: It costs almost nothing to provide a landline to ADSL customers and yet they get away with charging $23 min per month, which is between 25% and 70% extra ontop of the ADSL plans they offer.

    Need ACCC to get Telstra to do anything progressive.

    • I’m the Ben that made that comment. It was made as a personal opinion only and doesn’t represent the company. It was a comparison between Telstra’s current offerings (200GB Complete Home Bundle) and the Naked DSL Pricing of a competitor. Currently, the price difference for a 200GB Peak service through another Provider is about the same as a 200GB service provided over PSTN (depending on Provider of course).

  7. reason why telstra should go naked for the competitiors, the accc really needs to look at the competitors, using them for keeping their profits high

    the competitors arent interested in the customers ,just use the naked excuse for another revenue to make profits

    if the accc havent got sick of the same competitors complaining for losing profits already

    they must be on the verge of it

    • it would not make sense for Telstra to encourage their customers to no use the PSTN. Sure their line rental may contribute to the PSTN, however, the ACCC has not forced Telstra to offer Naked DSL as a product. That would be bad for the company, as it would have to supply the USO POTS service for those who want it, and a cheaper product for those who use voip, there is no cross subsidy, so I think telstra would be in trouble if this actually happened. There are limits as to what the ACCC will do, as it stands, there is quite a lot of competition from ISPs who offer Naked DSL, but this Renai Lemany just likes to do his own bit of Telstra bashing and uninformed biased reporting.

  8. Who the hell would dump a ridiculously brown-eyed girl like that?


  9. If you compare pricing then bundling a PSTN line costs about the same as going naked, for similar data allowance. Having the PSTN is a definite win because you can log a line fault as simple as “I don’t have a dialtone” or “my phone is scratchy”. Naked line faults are troublesome, PSTN is an essential service so Telstra MUST fix it in a timely manner. Can’t see a lot of reasons to go naked!

    • And that is why a number of my friends have a PSTN line even though they now use VoIP exclusively for calls incoming and outgoing. They pay the Telstra Tax so that Telstra will treat them well and not discriminate against them when something goes wrong. And I do use the word DISCRIMINATE deliberately. I have taught them all the “good” words to use when something wrong is happening and how to circumvent the endless loops in Telstra to get it reported fast and fixed fast. It is ridiculous that I have to go so far as to teach people this.
      I have chosen Naked and know the caveats and have 3G access on the router along with an UPS to back up the services required due to past Corporate bastardry. I do not go down. Plus, Telstra’s petulance has angered me so much in the past I refuse to deal with them. I don’t tollerate a child’s petulance, why would I reward an adult CEO’s petulance with more of my $$$ than I absolutely must. A pox on them.
      Geoff, what you have said is a big reason why a lot of people currently keep the PSTN. And it is because of Corporate discrimination that is rewarded and has been aided by the Neo-Cons in the Liberals. A pox on them too.

  10. This is case in point why Telstra must be separated if the industry is ever going to move forward. It was never going to happen and makes no sense whatsoever in an integrated business that relies extensively on service bundling to maintain its revenues. There is no business case for shooting yourself in the foot; never was, never will be.

  11. With BigPond’s new pricing I don’t see why more people don’t take up a BigPond ADSL service and a HomeLine Budget with NA000 Barring (emergency only) and the 500gb plan @ $89.95 = total $112.90
    Compared with iiNet’s 600GB plan @ $119.95
    Or Internodes 300GB plan @ $99.95

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