Telstra will fork out around $25 million in refunds to over 50,000 customers for failing to tell them the NBN speeds on their plans weren’t achievable.
Customers who weren’t getting the NBN speeds they signed up for – in some cases less than 30 per cent of the speed in their plan – should have been notified and given the option to move to a slower plan or leave their contracts at no cost, the Australian Communications and Media Authority (ACMA) found.
Telstra and its subsidiary Belong failed to adequately notify customers and give them the full range of options given the poor performing NBN speeds.
ACMA expects Telstra to cough up around $25 million in refunds to affected customers, beyond those found by the regulator.
Telstra Global Connectivity and Platform Products Lead, Sanjay Nayak, apologised to customers in a blog post explaining the issues with its notifications.
“There’s also no way to tell what maximum speeds you can get on your NBN service until after you are connected to the NBN for the first time,” he said.
“This means you might order a 100Mbps service when you first move, only to find out later the NBN connection is not able to support those speeds.
Nayak said the company has already begun implementing new processes.
“This is a complicated issue that we are managing proactively, and we are very sorry to have let these customers down,” he said.
ACMA Chair Nerida O’Loughlin said Telstra didn’t do enough to make sure people were getting what they paid for.
“The ACMA is very concerned with this conduct as these customers have been paying for a level of service they were not receiving,” she said.
“Telstra denied these customers the opportunity to downgrade their plan or exit their contract.”
Under a remedial direction from the communications regulator, Telstra will have to review its internal systems and governance processes as well as submit to an independent audit which is due to be completed by the end of August.
Failure to comply with the remedial direction could see Telstra hit with fines up to $10 million.
A Telstra spokesperson was disappointed Telstra got singled out by ACMA in a press release despite self-reporting the issues to regulators.
“We know this is happening more broadly in the industry and it is disappointing that the regulator as singled out Telstra and rewarded our self-reporting in this way,” the spokesperson said.
ACMA and its regulatory cousin the Australian Competition and Consumer Commission (ACCC) have taken telcos to task for their communication around the NBN.
In June the ACCC fined Dodo and iPrimus $2.5 million for lying about typical NBN evening speeds.