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Telstra: You Don’t Need Virtually Unlimited Broadband When You Can Have Our Overpriced Service

Phillip Dampier October 11, 2010 Broadband Speed, Competition, Data Caps, Editorial & Site News, Telstra No Comments

Bigpond is Telstra's broadband service

Telstra, Australia’s dominant telecommunications company, is openly concerned about the prospect of Australians finally shedding themselves from Internet Overcharging schemes like low usage caps and throttled speed.  But instead of doing away with these profit-boosting schemes themselves, they’ve decided to argue that consumers don’t need the country’s newest 1TB usage allowance plans, calling them publicity gimmicks.

Of course, Telstra doesn’t offer a 1TB plan.

Heath Gibson tries to explain away Telstra’s Internet Overcharging in a company blog post:

A terabyte is a lot of data. One provider claimed it’s enough to download about 200 DVD quality movies and still have quota left over.  Whilst my inner geek is salivating at the possibilities, the analyst in me is questioning just how many people currently need, or could even use, a terabyte of data each and every month.


Gibson believes the average Australian is better off plans like Telstra’s 50GB DSL service, running $49.30US per month on a two-year contract.  When all the charges and fees are totaled, Australians will pay Mr. Gibson’s company $2,364.50US for two years of service that slows to 64kbps once your monthly 50GB allotment is used up.

“Terabyte plans will have appeal to a special niche and demand for these plans will no doubt grow over time,” Gibson wrote. “But for now my advice to most people would be to look past the attention grabbing headline, check how big a plan you really need and keep in mind all the other things that go in to making a great ISP.”

Australians have already made that decision and they have been voting with their feet to other providers.  On the same day Gibson was dismissing the competition, Telstra CEO David Thodey was responding to it, recognizing the company has lost significant market share because of high prices and poor customer service.

He told The Advertiser improvements were underway.

“The focus on customer service is something that is innate within Telstra, but our delivery leaves a lot to be desired,” he said.

So is their pricing.  Gibson’s views defending rationed Internet service are similar to the arguments broadband providers in the States use to defend their failure to keep up in the global broadband speed race.  Only instead of dismissing the need for unlimited service, American providers try and convince customers they don’t need the faster speeds they don’t deliver.

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Stop the Cap!