Telstra to shape excess mobile data usage

Telstra mobile customers who exceed their monthly data allowance will no longer cop massive excess data usage charges, and will instead have their mobile broadband speeds throttled, the telco has announced today.

The use of shaping for excess data usage is common for fixed-line broadband plans; however, today's announcement makes Telstra the first Australian telecommunications company to throttle mobile data usage rather than just charging additional fees.

The telco's chief financial officer John Stanhope is set to announce the change at a speech to the American Chamber of Commerce in Melbourne later today, in a move that Telstra said aims to reduce the incidence of "bill shock".

"By slowing data speeds once a customer has exceeded their data allowance, and not charging for the extra data, customers stay connected without fear of a hit to the hip pocket," Stanhope said in a statement.

Customers are alerted by SMS when they reach 80 per cent and then 100 per cent of their data allowance. Telstra told ZDNet Australia that a 2G customer will have their speed reduced to 15 kilobits per second (kbps) while a 3G customer will have their speed reduced to 48kbps. If they want to go back up to full speed, customers will be able to pay for additional data top-ups over the internet via their mobile phone.

"The new service will make life much easier for our customers by providing them with greater certainty and control over their data usage and their bills," Stanhope said.

The announcement was welcomed by the telecommunications regulator, the Australian Communications and Media Authority (ACMA). ACMA chair Chris Chapman said that the authority's "Reconnecting the Customer" inquiry into customer service in the telecommunications industry has already forced telcos to re-evaluate their pricing plans.

"The ACMA is highly gratified that the [Reconnecting the Customer] strategy is already bearing fruit," Chapman said. "Likewise, we look forward to the industry as a whole being similarly responsive."

A draft report of the inquiry is due to be released next Wednesday.

The news comes as the telco has added over one million customers in this financial year, over half of which are iPhone or Android smartphone customers.

ZDNet Australia contacted Optus and Vodafone for a response to the announcement but had yet to receive a comment at the time of writing.