Telstra boosts web speeds. You may not like why

Telstra's NBN customers will be compensated after receiving substandard speeds.

Telstra's NBN customers will be compensated after receiving substandard speeds. Photo: Getty

After more than three years of lagging behind, Telstra appears to have finally fixed its sub-par internet speeds. According to one expert, it was a simple case of spending more money on bandwidth.

In March, for the first time ever, Telstra topped the list of Australia’s fastest internet providers, as measured by streaming giant Netflix, with an average speed of 3.68 megabits per second.

Between April 2015 and August 2017, Telstra – which provides more than half of all NBN broadband and wireless plans – consistently delivered the worst broadband speeds, with a low of 2.05Mbps in July 2015, according to Netflix.

But beginning in August last year, Telstra started jumping up Netflix’s monthly rankings until it took out top spot in March, the first time it had ever outranked Exetel, Optus, iiNet, TPG and Dodo/iPrimus since Netflix launched in Australia in 2015.

Telstra, the dark green line at the bottom, has improved dramatically since August 2017. Photo: Netflix

Why the sudden improvement?

According to telco expert Paul Budde, Telstra fixed its poor connection speeds by buying more network capacity (bandwidth) for its customers.

“Telstra has bought the right level of capacity to provide the best possible service,” Mr Budde said.

“If they don’t buy enough capacity, and lots of people are using this service, then your internet speed goes down.”

Mr Budde’s theory echoes that of NBN Co, which has in the past accused internet providers of failing to purchase enough bandwidth to deliver promised speeds.

Internet providers like Telstra buy bandwidth access to the NBN in bulk. Bandwidth is a measure of capacity. If the bandwidth is too small for the number of people trying to connect to a network, speeds drop.

In November last year, the Australian Competition and Consumer Commission found about 42,000 Telstra customers received slower internet speeds than advertised.

What Telstra says it is

When approached by The New Daily, a Telstra spokesperson did not mention bandwidth.

Jana Kotatko, head of Fixed Products at Telstra, said giving more customers the so-called ‘Smart Modem’ and increasing their NBN speed tier had helped improve broadband performance.

Telstra announced in February it had plans to upgrade more than 850,000 users with NBN connections of 25Mbps up to the 50Mbps plan.

In mid-December 2017, NBN Co said it would temporarily discount Telstra’s 50Mbps service plan and keep its most basic contract service with the 25Mbps tier, which has also helped move many customers into higher-speed plans.

“With increased speeds, our customers will have the freedom to stream in [ultra-high definition] 4K or HD on multiple devices without buffering or interruptions,” Ms Kotatko told The New Daily.

“As the popularity of streaming content like Foxtel Now and Netflix continues to grow, we’re seeing data on our fixed network increase by about 40 per cent each year.”

Mark Gregory, an expert on internet networks at RMIT, said the differences in speeds measured by Netflix probably reflected its different mix of customers.

“Those with more [customers] on DSL technologies would have a lower average speed than ISPs with more [customers] on fibre and cable,” Dr Gregory told The New Daily.

The other factor likely to affect the results was “whether the Netflix video is being delivered directly into the ISP access network”, he said.

Streamed Netflix content can be slowed down if it is redirected through multiple internet servers.

Major telcos, such as Telstra, have the ability to prevent this “bouncing around”, Dr Gregory said.

A Telstra spokesperson said: “Like many operators around the world we work with streaming services, including Netflix, to place copies of their content closer to our customers.”

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