Telstra overhauls mobile phone plans, dumping lock-in contracts and excess data charges

Excess data charges and lock-in plans are dead as Telstra turns mobile phone plans on their head.

Telstra has streamlined its mobile plans in a bold bid to attract more customers. Picture: AAP

Telstra is axing its mobile and data plans and replacing them with 20 in a massive overhaul of its consumer and enterprise services.

The new plans have five pillars: no lock in plans, freedom to change a plan once a month, no excess data charges in Australia, 24 and 36 month device payment options and an ability to personalise plans through add-ons — distinctly different from the roughly 1,800 plans in existence.

Under Telstra’s new regime, users can change their data limits once every month. They can exit plans at any time provided they pay off handsets bought with those plans. Phones can be bought outright or on 24 and 36 months contracts.

Telstra Group Executive, Consumer & Small Business Michael Ackland said a key feature was Telstra’s decision to abolish excess fees across the board. By default users who go over their data limits will be shaped to 1.5 megabits per second, which Telstra says is enough to watch video at standard definition. They will not be charged extra.

Mr Ackland says the new streamlined plans were being launched “in the interests of simplicity”.

Users however can upgrade to the next tier for that month to avoid being shaped down to 1.5Mbps. They can specify to jump tiers starting from the next month. They can exit at any time provided they pay any outstanding handset costs. You can buy a handset from Telstra, or bring your own.

Mr Ackland said users on existing contracts can stay on them and see them out, however they could contact Telstra if they want to swap to the new system.

Leases and exit periods also were being phased out, he said.

This new systems for post-paid accounts starts from today. Pre-paid SIMS from retailers would still be available.

The small, medium, large and extra-large consumer mobile plans include 15GB, 60GB, 100GB and 150GB of data and cost $50, $60, $80 and $100 per month.

The small, medium, large and extra-large consumer data only plans used for example with tablets include 5GB, 10GB, 50GB and 100GB and cost $15, $25, $50 and $75 per month.

These costs include access to Telstra’s new 5G network until June 30 next year. Customers who want 5G access after that will need to pay an extra $15 per month.

Telstra envisages that many customers will be happy to stay with 4G unless they need the extra speed and lower latency. For example, users who are not into high end gaming, or using multiple 4K streams may not see the step-up to 5G as necessary.

These 20 plans will also consist of bolt-on extras, such as $10 per month for international calls. Telstra was working to replace pay-as-you-go international plans with a $10 per day international pass to about 20 countries. Pay-as-you-go however would still apply to countries that are not part of that scheme.

Mr Ackland said the plans would give customers the ability to vary data limits for different months. At Christmas and holidaying with their children, they may need more, and during other months, less data.

Sports passes would remain but Apple Music would no longer be included. However neither would be metered.

He said customers could manage their usage with the Telstra 24/7 app.

He revealed that customer mobile data usage had climbed about 40-50 per cent in a year.

He said Telstra would continue to perform credit checks of customers even without lock-in contracts.

Speaking to The Australian, Mr Ackland said Telstra had unreservedly apologised after revelations that some indigenous customers had been placed on expensive contracts and had accumulated large excess charges

The ABC reported today that Telstra is facing an investigation over selling unaffordable contracts to vulnerable Australians.

It said the Australian Competition and Consumer Commission had confirmed it was looking into whether Telstra breached consumer law, a breach that could attract fines in the millions of dollars.

It said there were dozens of examples of indigenous customers being on contracts costing up to $250 per month and some had accumulated huge excess data charges.

Mr Ackland told The Australian that Telstra had waived the excess charges and had apologised unreservedly for what had happened.

He said affected customers had not been charged a series of $10 charges for each Gigabyte over their limit, the standard charge.

He said Telstra conducted about 500,000 sales transactions with customers each month.

“The point from our perspective is that we deal with customers in a whole range of different vulnerable circumstances, whether it’s education, financial, health, remoteness.

“And we work really hard with financial counsellor groups and a lot of the other stakeholders to help support them.

“I think in the overwhelming majority of cases, we’re doing a really great job. And we’re very, very focused on how we deal with customers in those areas of vulnerability.

“On the specific case (that) the ABC raised, we had worked with this customer really closely, we’d actually agreed to wipe the debt completely.

“Initially there was an error made. And that caused some further anxiety and stress for that customer. We apologize unreservedly for that situation.”