Telcos warned on misleading customers about NBN price hikes

Australians have been urged to shop around for better value on their NBN plan, as the consumer watchdog fired off a warning shot to telcos raising their prices on lower speed services.

Telstra, Optus, Foxtel and Aussie Broadband have all announced price increases to come into effect by the end of November on their 25 and 50mb/s plans.

Telstra’s basic plan will go up by $5 a month, while Foxtel is set for a $10 monthly increase.

And some Optus plans will go up by up to $5 for existing customers.

The changes come after the National Broadband Network’s new pricing agreement, which will come into effect from December 1, was approved by the Australian Competition and Consumer Commission (ACCC).

The new plan will see the NBN lower wholesale prices on all but one data plan, with the largest cuts in prices made to its two lowest speed plans, 15 and 25mb/s, and its highest speed plan, 1000mb/s.

While providers are responsible for pricing what households pay for their NBN broadband plans, they have been warned by the Australian Competition & Consumer Commission (ACCC) to not mislead customers as to the reason for the price hike.

Commissioner Anna Brakey said the watchdog had written to retailers this week, urging them to be “upfront and honest with consumers” about their price changes and why they’re happening.

“NBN retailers should not be pushing households towards more expensive offers with speed inclusions that are higher than they need,” she said.

“If we were to see this, it would raise concerns. We expect NBN retailers to provide clear information to consumers about suitable plans for their circumstances and preferences.”

In making their price changes, Telstra linked their decision to factors including lower profit margins on home internet plans.

“We believe now is the right time for us to look at our plans and make some changes which respond to this and improve the economics of our fixed business,” a Telstra spokesman said.

“Our Basic and Essential plans will increase by $5 a month as well as our Business Essential plan.”

The telco will continue to offer its Voice plan $10 concession credit and $65 starter internet plan for vulnerable customers, but has dropped prices on its Superfast and Ultrafast plans.

Optus said it reviews prices annually, and noted there had been a “surge” in internet usage measured in the last three years.

“Optus is paying more to supply that NBN service and it is necessary for us to adjust our in-market NBN prices accordingly,” a spokesman said.

Aussie Broadband CEO, Phillip Britt, linked the price increase to a decision in NBN Co’s new pricing plan to keep a service charge called CVC in place for plans below 50mb/s, but to drop it for higher speed plans.

“By not only continuing to charge CVC, but doing so on an individual basis, the NBN has effectively forced our hand to raise prices for the majority of our broadband customers – and at a time of heightened financial uncertainty,” he said.

Under the NBN’s plan, the CVC will be reduced every year until it is removed completely by July 1 2026.

The watchdog said a “less expensive” 25Mbps plan would still allow households to access online applications, including HD streaming.

“We are concerned where we see advertising by NBN retailers that suggests households need to be on 50 Mbps or even 100 Mbps plans to stream multiple shows at once, when a less expensive plan may be sufficient,” she said.

“Of course, some households may have a preference for the higher speed tiers, but we want to make sure that customers have clear and accurate information to guide their decisions.”

Ms Brakey said it’s “never been more important” for consumers to compare prices to ensure they were getting a good deal.

She also directed people to access the Measuring Broadband Australia report to see how providers were meeting their speed claims, to ensure their chosen plan would meet their internet needs.

“There are significant price differences between retailers so it is worth seeing what other deals are available,” she said.

“Given cost of living pressures impacting many householders, we expect retailers to assist customers to select NBN plans that best suit their needs so that they avoid paying more than necessary.”

Compare Club’s head of research Kate Browne said most households found interpreting internet plans “far too complicated”. She added that extra competition on the market meant customers could likely score a good deal.

“Before shopping around, contact your current provider to check how much data you are using per month, many customers have more than they need and as a result are paying more than they should,” she said.

“Speed means more devices online at the same time with no buffering. A household of two to four people who are streaming video, browsing and online gaming will usually need a speed of around 50Mbps and there are plans available for as little as around $54 a month.”

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