Telstra bows to pressure, reduces ADSL pricing

Telstra has cracked under pressure from the competition watchdog and the possibility of AU$10 million penalties and will reduce ADSL pricing in the wholesale arena, making it more viable for competitors to resell ADSL services.

The Australian Competition and Consumer Commission (ACCC) served the telco behemoth with a competition notice in September this year, giving it a 12-week deadline to change its anti-competitive conduct or risk being stung with penalties exceeding AU$10 million.

Today, the telco giant said that in response to -customer concerns" it is taking a -whole new approach" to its provision of ADSL. -Rather than just taking a slice off the price, we've gone into the engine of DSL and looked at the whole functionality," Graeme Salt, public affairs manager, Telstra Wholesale, told ZDNet Australia.

Whilst Salt claims that feedback from customers has been positive, he declined to disclose details of Telstra's new high-speed Internet pricing.

-We won't be making an announcement until we get a few deals signed," he said, adding that there are probably four deals just days away from completion.

At the time it when the ACCC doled out its competition notice and twelve-week deadline to the telco heavyweight, the competition regulator claimed Telstra supplied its wholesale high-speed Internet services at prices -whereby competitors buying the wholesale service are unable to compete with Telstra's own BigPond retail prices".

In retaliation, Telstra said its wholesale ADSL pricing was -around cost", with its wholesale division very vocal on the likelihood of retail prices rising if it were forced to slash wholesale pricing. -If the ACCC wants us to increase the wholesale gap do they really want us to increase ADSL retail pricing?" Salt said in an interview with ZDNet Australia at the time. However, this time around, the wholesale group refused to be drawn into discussion about the likelihood of retail prices rising, saying it was a -completely separate side of the business".

ZDNet readers have expressed their anger at what they consider to be Telstra's anti-competitive behaviour in the broadband arena.

-Broadband and ADSL deployment has suffered immeasurable damage which will take years before it recovers fully," one ZDNet reader said. -Without competition, Telstra's pricing policies combined with its incompetent technical implementation and poor level of service effectively suppress our ability to be leaders in the communications and business arena. By maintaining an inflated wholesale price for the broadband services, as usual, Telstra fails to see that 100 percent of nothing is nothing and in the process, locks out all competition, which is of course what it's very good at. It's a joke the ACCC has allowed it to continue without taking the strongest action allowed under the legislation. Monopolies do not work in our best interests. They are self serving. We never learn."

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Talkback 13 comments

    Hello, I feel Telstra ADSL is ...Anonymous -- 20/11/01

    Hello,

    I feel Telstra ADSL is a joke. The service is worse than deplorable, it borders on criminal to take a user's money for such substandard service. Frequent authentication problems, server dropouts and delays in loading pages disgusts me. Then the have the absolute gall to impose a 3.0 GB limit per month! After all the hassles they cause. If you are lucky enough to actually log on, you probably would be lucky to download 3 GB a month from all the server dropouts and connection failures. Dont even get me started on the PPPoE and sign in software, and when it does drop out, most times you need to reboot the PC. Telstra, you are a disgrace! Here Here to competition!

    well since they added the cap ...Anonymous -- 20/11/01

    well since they added the cap in an attempt to say look its costing this much for us to provide the service too rather than drop the wholesale, they have done the quoted "what would u have us do, raise the price of retail..."

    while i cant say the drop outs cause me to reboot the pc (well i do use linux after all, it just automagically reconnects) it does give me crap transfer speed, and its lack of reliability does lead me to question whether the "premium service" i pay for is just a name or if telstras definition of premium is different to mine, a feeling i conveyed in a personal email to ziggy on the days after the 3gb fixed cap was announced. i never saw a reply to the email either, but its not really suprising. i did send it as a cc to ziggy and it was addressed to the BPA cust service area but i never received anything other than the automated receival receipt to say they would look at it and get back to me.

    Can't wait for the competition ...Keith Styles -- 20/11/01

    Can't wait for the competition. I will be changing as soon as my contract expires & with an Int'nl modem already paid for, I should be able to get a better deal. If other Telcos are sub-contracting from T(H)elstra tho, I wonder if it will be any better. At present it is the pits. Lousy response, poor thuput, Tech support who obviously have reached a point of total dispair, a contract that means nothing to T(H)elstra, 3Gig limit,which was unlimited when I contracted for it last December'00 & no alternative copper or cable in my street. I wunda if we will ever get Broadband to work in the 21st century. I doubt it, unless we get a Telco who knows how to deploy a broadband network!! Broadband has suffered immeasurable damage all due to T(H)elstra's incompetence.

    Without a doubt, as soon as an ...Anonymous -- 21/11/01

    Without a doubt, as soon as another ADSL ISP with a comparable pricing structure appears, I will be taking it. no questions.
    And to anyone considering taking up Telstra's "options and rewards" schemes - After nearly a year on them with normal use, I have a total of 5c or so in reward "discounts".

    They no longer care about the consumer, just their share prices and share holders. As soon as more competition becomes available, I think they will feel the inevitable of what happens when you do this.

    I'll sack Helstra as soon as a ...sack_helstra@telstra.com -- 21/11/01

    I'll sack Helstra as soon as another ADSL service proivder services my area.

    If enough people vote with their feet, then Helstra and Helstra's selfish, greedy and international price ignorant share holders, receive the return on their Helstra shares they deserve!

    i joined telstra in oct this y ...Anonymous -- 21/11/01

    i joined telstra in oct this year i was disaponted they put a 3 gig limit i phone up about it they said they had to cause they were make no more funny i thought i seen some were telstra make like 10000 bil last year i would be very happy if senator olsen gets of his **** and stop saying he doing a great good at tele communications ffs its the 21 century and in 1963 we put a man on the moon but we cant even put cable in the ground plus we all know he is one of the telstra highset share holder tha why optus was stop putting in calbe through out oz i see that optus in a over seas commpany formly britsh now singapore and they are cheaper and dont have cap and no speed limit like we down load at 53 max were the have none mighty telstra all ozzie commpany looking after every day ozzies yea right bleeding us dry more like it i hear in korea that 85 % of pep useing internet have cable ffs they 3rd world countrie i think i should say something out thier seveice well it good when its going but since oct have would say on average it would be down at least 10 times a week no good enough from our mighty ozzzie commpany get your act togther they saying they pep are conecting more and more to cable and broad band adsl not out of sevice but out of need for speed but i dont see why they are charging the prices they are i belive say 60 would be fair if it was running proper all the time and i think 40 the way it is now thz another happy telstra customer

    I hate Telstra and their 3GB c ...Ben Noblet -- 22/11/01

    I hate Telstra and their 3GB cap too, but even if they do drop their wholesale price, and someone manages to match them, be aware of the following:

    - anyone competing with Telstra will be using the same network and just rebilling you - it will not be any more reliable.
    - competitors will also have to have a transfer cap, as it actually does cost money to transfer data around.

    Now a sensible solution would be if they started distinguishing traffic - ie. don't charge me the same for a download from my office a few km away (which is also on the telstra network) as a download from an overseas server!

    IInthe 2 months since installi ...ChrisG -- 22/11/01

    IInthe 2 months since installing Te$tra DSL price has gone up & bandwidth has gone down. The marginal value for money of the service has been lost. We quit as 1st Dec and we emailed Ziggy to let him know we are taking ALL our other telco business with us.

    They sent us a letter to cry poor - this from a company that nade what - 4 thouosand million dollars profit last year?

    I fined that ADSL is quite goo ...Vic -- 23/11/01

    I fined that ADSL is quite good and fined the service is good the speed isn't as good as cable but when you can't get cable ADSL is better than 56k modem.I give ADSL 80 out of 100.

    Why blame just Telstra? I've h ...Watchdogg -- 24/11/01

    Why blame just Telstra? I've had ADSL since it was first offered and I genuinely believe that over time, the reliability has improved. What we do need to look at is the overall slackness of all ISP's in Australia. Compared to Europe, Australian customers are given a raw deal all round from all providers. In Sweden you can find "all-you-can-eat" cable @ 1500kbs for AUD$40 a month. Yes, sure Sweden is a much smaller country but I think we have lived here long enough to be accustomed to the tyranny of distance. To all ISP's in Australia - GET YOUR ACTS TOGETHER!

    Personally from my point of vi ...Anonymous -- 27/11/01

    Personally from my point of view is that telstra is too greedy with their money, they have their money spent elsewhere rather than competing with other isps such as Optus@home and iPrimus. telstra continues to charge customers more and more and not even thinking about improving. This is what happens to it now. telstra finally releases the pressure on adsl when they received the bill. They were afraid for that bill, but before then, did they even bother? they are just money greedy in this society. telstra is nothing more but just a badly named isp to be recognised throughout the world. It will make others feel sympathesised (or whatever the spelling was) about Australians getting rip jobs from the Australian owned isp.
    If anyone from overseas who have used cable before and when they take a vacation here, if they look for an isp, they will never touch telstra. telstra will never be able to compete with its own competitors. don't even bother talking about overseas isp and how fast they are, but have a look at Optus, iPrimus. Did they torture their customers like telstra does?
    Yet the fact lies in that both Optus and iPrimus are faster (as in speeds) then telstra, their services and hence they don't have download limit (only newer customers of iPrimus gets 3 gig and Optus has the 10x aup policy which is still better than puny 3 gig).

    At the moment I consider anyon ...Anonymous -- 03/12/01

    At the moment I consider anyone who can actually get broadband to be lucky. It's now December and this is what Telstra is still saying about my area.

    "Stay tuned! At the moment you can't get ADSL, but you should check back soon, because we're in roll-out mode and at this time your exchange is planned to be updated during the month of November.*

    If you want broadband now, check out our cable or satellite services instead.*"

    Naturally I have no access to cable and satellite, apart from the cost, is rediculous for a dwelling less than 30 Klm's from the centre of a state capital.

    Also telstra tech support must be the worst in the industry. I do mobile computer servicing and, after spending an hour at one customers house testing their computer because their broadband had stopped working, finally convinced Telstra to check their local exchange. It turns out that Broadband for that exchange had been shut down for two days, and to find this out took about 30 seconds.

    Meanwhile my customer had spent two days on service calls to telstra, every one of which had insisted it was their PC that was the problem, before calling me. I'm convinced that the service people have a sheet of paper with a list of excuses written on it and each time the customer calls they tick one off and go on to the next one.

    I certainly hope that Broadband in Australia starts to move in a more useful direction soon.

    Why does it cost so much for A ...Anonymous -- 10/09/03

    Why does it cost so much for ADSL in Australia. I have ADSL here in SHANGHAI - 24/7 hookup, no data transfer excess/limits all for 130 yuan flat a month. ($A1 = 5.3 yuan). It cost me 630 yuan to sign up and get connected, but China Telecom tossed in the high speed modem, the network card and a Webcam. Not looking forward to returning home and be without my ADSL.

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