Telstra to compensate NBN customers

The telco will compensate around 42,000 customers after failing to provide the speeds promised to them over the NBN.

Telstra has admitted it may have contravened Australian Consumer Law. (Picture David Geraghty / The Australian.)

Telstra has agreed to compensate around 42,000 customers after failing to provide the speeds promised to them over the National Broadband Network (NBN), with the incumbent telco admitting that it may have contravened Australian Consumer Law.

The Australian Competition and Consumer Commission (ACCC) said on Wednesday that Telstra’s measures will include offering refunds to customers, the option to change speed plans, and exit from contracts without paying a fee.

It added that the bulk of the affected customers are on the NBN fibre-to-the-node (FTTN) or fibre-to-the-building (FTTB) footprint.

Of the 42,000 customers affected, 26,500 had been sold super-fast 100 megabit-per-second connections despite those speeds not being available at their premises.

Of those, 9,606 customers could not even achieve speeds of 50 Mbps, which is the next tier down. Meanwhile, 6352 FTTN users could not receive the 50/20 Mbps and 9342 customers didn’t receive the promised 25/5 speed.

“Our investigation revealed many of Telstra’s FTTN and FTTB customers could not receive the maximum speed of their plan. Even worse, many of these customers could not receive the maximum speed of a lower-speed plan,” ACCC chairman Rod Sims said in a statement.

“In essence, people were paying more to get higher speeds that they just weren’t able to get.”

The services offered by Telstra included a “Super Fast Speed Boost” which advertised maximum download speeds of up to 100 megabits per second (Mbps) and maximum upload speeds of up to 40 Mbps (100/40 Mbps).

Mr Sims added that Telstra isn’t the only telco that’s on the regulator’s radar.

“We are mindful this is not just a Telstra problem; it is an industry problem where consumers are often not getting the speeds they are paying for.”

The latest admission from Telstra comes after the telco conceded in May that almost 8000 customers were not receiving the NBN speeds they had been promised. The ACCC’s examination of Telstra’s NBN services has revealed a far bigger problem.

Telstra will contact the affected customers and refund the extra they have had to pay for the higher speed services. Telstra’s basic 25/5 NBN service cost $80 a month ($2109 over 24 months), customers pay an extra $20 a month for the 50/20 service and an extra $30 a month for the 100/40 months.

The telco’s newly appointed group executive of consumer and small business, Vicki Brady, said that Telstra has tried to take a proactive approach to service delivery issues.

“The remedial action will apply to less than 5 per cent of Telstra’s nbn customers, the steps taken by Telstra position it as one of the first RSPs to adopt the ACCC’s Industry Guidance for NBN Retail Service Providers issued in August 2017,” Ms Brady said in a statement.

She also reiterated that the problems highlighted by the ACCC were not linked to the telco buying insufficient broadband capacity from NBN Co. Service quality on the NBN is affected by two factors: the state of the access technology used to connect homes to the NBN and how much broadband capacity the telcos buy.

Telstra currently has an NBN customer base of close to million NBN customers and ACCC boss Rod Sims said that the telco’s undertaking will now provide greater clarity to customers on the speeds they can expect.

“As soon as they sell a service and you activate only then can they test whether the line is capable of delivering the promised speeds, Mr Sims told ABC radio.

“Most people can get the speed they have signed up for but from now it just won’t be the line’s fault anymore it will be RSPs not buying enough capacity from NBN Co.”

Ms Brady said that Telstra was provisioning sufficient capacity from NBN Co and actively monitoring its needs.

“Telstra has been using robotic testers in its network for the last 18 months to ensure it is buying the right amount of connectivity virtual circuit (CVC) from nbn co to deliver the appropriate speeds to customers,” she said.

“The ACCC is conducting an industry-wide investigation and we’re pleased to be the first to reach a resolution with the ACCC.”

With Anthony Klan