Telstra denies 'Telstra Tax' claims

Consumer advocacy group Choice has hit out at Telstra's prices compared to other telcos and urged customers to break their contracts.

The group said that customers could get out of paying an exit fee due to Telstra's widely reported series of outages that have plagued the telco over the past five months.

Choice's main argument was that the premium price Telstra customers pay for guaranteed service uptime, or the "Telstra Tax", no longer provided value.

The consumer group compared Telstra's bundles with competitors, saying they had to be at least on par when it comes to:

Data allowance
Mobile call allowance
NBN speed tier
Contract type (month-to-month, fixed term)
Inclusion of a TV streaming device (for home broadband bundles)
Whether local and mobile calls are included in the cost, or charged on top of the bill

Choice argued that the Telstra Tax was as high as 92 percent, comparing Telstra's $115 a month ADSL2+ "Large Broadband" bundle - which comes with 1000GB data limit and costs $203 upfront - with the cheapest competitor TPG's $59.99 Basic Bundle, which has no data limit and costs $99.95 upfront.

Both bundles charge for calls on top of monthly fees and run for 24 months.

However, Choice did not take into consideration some of Telstra's additional services such as double data for three months out of the year, in-home tech support and TV streaming subscriptions.

Telstra also offers a 1000GB Belong broadband plan for $75 per month, and its "Best Bundle Ever" for $99 per month.

A Telstra spokesperson told CRN that Choice's analysis was flawed and ignored a handful of its comparable plans.

"In its analysis Choice misses many of our most comparable plans and fails to consider things customers tell us are most important, such as the breadth, speeds and availability of our network and the extras we include like free and unlimited access to Australia’s largest wi-fi network, free AFL and NRL season passes, free home broadband and mobile security, Telstra TV and free Apple Music on many plans," the spokesperson said.

"Our customers clearly recognise the value and competitiveness of our plans and this is reflected in the fact we’re the most popular provider for mobile and fixed services."

Choice said that customers could tell their service provider they intend to break their contract due to failure to adhere to the terms of their contract. If the telco insists on paying the exit fee, customers can escalate their complaint to the Telecommunications Industry Ombudsman, said Choice.