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Escape the "Telstra Tax"

CHOICE says consumers shouldn't be locked into paying a 92% premium to access Telstra’'s failing network

11 July 2016

CHOICE has crunched the numbers on 53 Telstra contracts and found consumers are paying up to a 92% price premium to access Telstra's troubled network, which has experienced seven major outages in the past six months.

"There's only so much free data Telstra can offer before they have to admit their network is failing on a fairly regular basis and its promised premium network is a thing of the past," says CHOICE head of media Tom Godfrey.

"With outages affecting pre-and post-paid mobile voice and data services, as well as broadband internet connections, it has become clear the 'Telstra tax' being charged to access its network is not deserved.

"By its own admission, Telstra claims its real point of difference isn't data limits or cost, but network quality. However, six months of network outages would suggest Telstra is a long way from offering a quality network."

CHOICE analysed 280 telco products[1] to see how much more Telstra customers are being charged when compared to equivalent or better offerings by other companies. Of these, 53 like-for-like comparisons could be made with Telstra products with premiums on the majority of these ranging from 6% to 92%. Examples of the "Telstra tax" premiums include:

Home Internet "Telstra Tax" of 92%

  • Consumers pay a 92% premium to access Telstra's ADSL "Large Broadband" plan ($2963 over 24 months including upfront costs) compared to TPG ($1539.71 over 24 months including upfront costs)

Broadband, Phone and Streaming "Telstra Tax" of 41%

  • Consumers pay a 41% premium for Telstra's X-Large Bundle with $20 NBN speed boost ($169/month) compared to Optus My Entertainment Bundle with $10 speed boost ($120/month)

Fixed Term Mobile "Telstra Tax" of 35%

  • Consumers pay a 35% premium for Telstra's X-Large Go Mobile ($135/month) compared to Optus My Plan Plus ($100/month).

"Although Telstra now claims to be investing millions to fix its failing network, this is too little too late for consumers trapped in fixed term contracts that are not getting the premium service they signed up for," Godfrey says.

"So if you are trapped in a fixed term Telstra contract and are tired of the free data for a failing service, log your outages, record your loss and take the fight up to Telstra to get out of your contract without penalty."

For more "Telstra tax" examples visit: choice.com.au/telstratax.

Tips for when a telco fails to deliver:

  • Gather evidence including the time, location and duration of the service disruption.
  • If you've been financially impacted, calculate how much you've lost by not having access to the service.
  • Tell the telco you intend to break the contract. Make it clear that you aren't going to pay exit charges due to their failure to adhere to the terms of the contract.
  • Escalate your complaint to the Telecommunications Industry Ombudsman.
  • Download ACCAN's My Phone Rights app to keep track of your complaints 

[1] Information was collected from Critical Information Summaries available between 20 June and 6 July 2016. CHOICE compared equivalent products offered by Telstra, Vodafone, Optus, Virgin Mobile TPG, and iiNet.

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