Telstra rip-off

Telstra has changed its pricing structure, billing in one minute increments instead of 30 second blocks.
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01.Telco rip-off

In a blow to customers, Telstra has changed its mobile cap plan pricing structure to bill in 60 second increments. From 20 March 2011 calls will be rounded up to the nearest minute, meaning that consumers pay the same amount for a one minute and one second call as for a one minute and 59 second call.

A letter sent to existing customers by Telstra helpfully illustrates the problem with the change - a call of two minutes and 15 seconds will now cost consumers $2.77 instead of the previous $2.37. According to Telstra, customers can terminate their contracts, but only after paying fees that can amount to more than $1000.

In the terms and conditions signed by customers, a clause allows Telstra to change the way they bill customers. Relying on this clause, the telco’s call centre staff claim that they are not charging more, just charging differently. A spokesperson for Telstra explained that the move was intended to “simplify charging across our plans. It also brings us into line with competitors charging in 60 second increments for mobile calls.”

This may mean little to customers, many who may have signed up with Telstra because of its previous billing policies, now stuck in contracts.

Telstra claims that the actual impact on customers will be “minimal”, but a poll conducted by CHOICE Online suggests otherwise. In the poll, more than 50% of members said they sometimes or always went over their cap limits. Changes to Telstra billing could mean more consumers are faced with bill shock.

“I signed up with Telstra because even though they had a lower cap limit than their competitors, because I knew that at the end of the day I was paying in 30 second increments, which was likely to actually cost me less.” says Joseph Canaris, an irate customer. “Now I’m stuck.”

CHOICE is on the case, and our strategic policy advisor is drafting a letter of complaint to the ACCC.



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