‘Disappointing’: Telstra NBN hikes slammed after CEO pledges transparency on mobile plans

Telstra is ditching CPI-linked mobile prices, hiking NBN fees and sacking workers.

Telstra is ditching CPI-linked mobile prices, hiking NBN fees and sacking workers. Photo: Getty

Telstra will take more control over its mobile plan prices and will hike NBN bills under a massive overhaul of its business that will also result in thousands of workers being sacked.

Under the overhaul, the telco will axe annual price increases linked to the Consumer Price Index (CPI) and adopt a “flexible” approach in which it decides how and when its prices will change for post-paid mobile.

Telstra unveiled the new pricing strategy on Tuesday alongside a reset of its enterprise arm that includes up to 2800 workers being laid off.

The strategy means the next CPI-linked price rise due in July is now cancelled, with chief executive Vicki Brady pledging to be “transparent” about future price changes.

“[It] will provide greater flexibility to adjust prices at different times and across different plans based on their value propositions and customer needs,” Brady said in a statement.

But despite that promise, Telstra also quietly unveiled a $4 to $5 monthly increase in price for its NBN plans on Tuesday, drawing immediate criticism from consumer advocates.

The changes – detailed online – affect four deals from basic to ultra-fast internet plans.

A spokesperson from the Australian Communications Consumer Action Network (ACCAN) slammed the rises, which Telstra claims were caused by National Broadband Network wholesale cost hikes.

“It is disappointing to see Telstra increasing prices on NBN broadband plans, particularly given the cost pressures consumers are feeling,” the spokesperson said.

“Telstra is claiming these price increases are in response to wholesale price increases from NBN Co … [which are] roughly $2 per month.

“It is difficult to see how Telstra can justify this as purely a response to wholesale price[s].”

Telstra had previously copped criticism from ACCAN last year after its inflation-pegged mobile plans soared by seven per cent during the cost-of-living crisis.

Veteran telecommunications consultant Paul Budde said Telstra’s move to ditch CPI-linked prices for its mobile plans is a bid to gain more control as it bolsters competition with rivals Optus and TPG.

“People will make a choice based on what’s the best deal and you don’t have a lot of room as a telecommunications operator to change prices, particularly not in a static way,” he said.

Theoretically, the changes mean Telstra could deliver higher – or lower – price changes than headline inflation moving forward, with Budde saying more frequent shifts are now likely.

But it’s still too early to say whether higher prices are likely, as it ultimately depends on competition between the major telcos.

“The systems they use now are so sophisticated that they can see on a day-to-day basis what’s happening in the mobile market,” Budde explained.

“It’s all about competitive pricing.”

RMIT University Associate Professor Mark Gregory said the shift away from inflation-pegged price changes will be good for Telstra, but means “more uncertainty” for many customers.

“We are likely to see [price] changes occurring at times that suit Telstra rather than waiting to see what the outcomes of CPI are,” Gregory said.

“Whilst consumers want the [price] softening to occur when CPI is high, I think there will be some concern about what it is going to mean when CPI is low … are they going to be higher than CPI?”

Treasurer Jim Chalmers said on Tuesday that the government is seeking advice about the mobile plan changes and the NBN hikes.

“We will be seeking advice from the ACCC about some of the claims that Telstra is making about their new pricing strategy and the role of the NBN,” Chalmers told reporters.

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