Telstra to wipe fees in radical plan overhaul
TELSTRA'S mobile and internet plans will be drastically overhauled and excess data charges axed in a bid to save customers money.
The telco giant expects to wipe up to half-a-billion dollars in various unpopular fees over three years in a bid to win back consumers.
Observers expect the shake-up to have a "domino effect" across the industry for potentially millions of people.
Finder.com.au tech and telco editor Alex Kidman said given its premium prices, Telstra was under pressure to provide better value.
This was particularly the case in the mobile phone market, in the wake of a series of embarrassing network outages.
The first step in Telstra's strategy begins next month with new data plans.
Eventually, excess data charges will be eliminated for all postpaid mobile and fixed internet plans.
Instead of being charged for excess data, speeds will be capped at 1.5 mega bits per second - still fast enough to watch videos on a phone.
Other initiatives will be announced in the lead-up to June next year.
"We are prepared to give up more than $500 million worth of revenue in the sort of charges we know have frustrated customers for many years," Telstra chief executive Andy Penn said.
"We believe that will drive more customers coming to Telstra."
Mr Penn said the changes would mean better service.
"We would expect the price customers pay for us - for the service they have today - is either going to go down or they will get more for their money."
Telstra will simplify all plans - including home internet and mobile phone offers - reducing 1800 business and consumer plans to just 20 by June next year.
Existing customers will be migrated to those plans by June 2021.
"When I look at a lot of the activity in the business, it's dealing with issues and complications and problems that we've created for customers because of the complexity in the design of the product," Mr Penn said.
Mr Kidman said the "bold" strategy to axe excess data costs would pressure rivals.
Simplified plans should make it easier to compare costs, he said.
The telco pledged to make it easier to move between plans, and to let customers build their own plans.
Better-value bundles will also encourage customers to combine entertainment, home broadband and mobile services on one plan.