Telstra defends 7 per cent increase for mobile plans

Telstra has come under fire for ramming through a huge 7 per cent price hike for its mobile plans, with the Australian Communications Consumer Action Network (ACCAN) saying the “shock” move is disappointing.

Australia’s largest telco unveiled a number of bill increases on Monday that will add between $36 to $72 a year ($3 to $6 a month) to plan prices from July 4, following an internal company review.

ACCAN boss Andrew Williams said the rise will put already strained family budgets under more pressure.

“The 7 per cent came as a bit of a shock … we were very surprised,” Mr Williams told The New Daily on Tuesday.

“It’s pretty tough for customers considering the cost-of-living pressures.”

Telstra, which booked a $1.8 billion net profit last financial year, said the price increases reflected a higher cost of doing business and a need to make upgrades to its network.

“We know price rises can be hard for some people, especially when cost-of-living pressures are high, and we want to be clear on why we’re doing this, and what’s available if you need support,” Telstra executive Brad Whitcomb said.

But Mr Williams said the company’s profits suggested the increases could have been “more modest”, and that with headline inflation now likely to fall below 7 per cent it was not clear the hikes reflect how costs will change over the year ahead.

“They really need to be conscious of those who are going to be put under stress,” he said.

Optus and TPG have not unveiled price increases of their own yet for the coming year, but in the past both telcos have waited for Telstra to unveil hikes before moving ahead with their own.

Mr Williams said reports suggested their prices may rise between 4 and 5 per cent, less than Telstra’s increases.

As things stand, Telstra customers on a starter mobile plan who were paying $47 a month will pay $50 a month from July 4.

Customers on the $89 premium bundle will pay an extra $6 a month.

Prices for mobile broadband S (small) and mobile broadband data bundles will not change, the company said.

“Like most businesses in Australia, we are also responding to increasing costs,” Mr Whitcomb said.

“These increased costs come at a time when the CPI data shows overall telecommunications prices – which covers all telecommunications equipment and services, beyond just mobile price – have not increased for consumers anywhere near the rate of other goods and services in recent years.”

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