Consumer advocacy groups have applauded Telstra’s (ASX:TLS) move to introduce throttling on mobile data in an effort to reduce “bill shock”, and have called on other major telcos to follow suit.
Under the scheme, scheduled for implementation by the end of this year, the telco will slow customers’ data speeds when their data allowance has been exceeded instead of letting the service continue as normal and charging for the excess usage.
"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,” Telstra chief financial officer, John Stanhope said.
Australian Communications and Media Authority chairperson, Chris Chapman, said the announcement was consistent with the industry responses it was hoping for following ACMA's year-long Reconnecting the Customer (RTC) inquiry, which examined customer care practices, “bill shock” and complaints handling within the telecommunications industry.
‘Likewise, we look forward to the industry as a whole being similarly responsive,” he said in a statement.
The Australian Communications Consumer Action Network (ACCAN) echoed the sentiments of the ACMA. Chief executive, Teresa Corbin, said Telstra’s new initiative would put pressure it has placed on other telcos.
"The pressure is now on Optus, Vodafone, 3 and Virgin the other providers to follow suit to put an end to this kind of bill shock that has seen customers in recent years stung with high excess usage charges for using the internet on their smartphones,” Corbin said in a statement.
According to Corbin, “bill shock” has been an ongoing issue in the industry and one that can only be solved by putting the customers back in control of their monthly spend.
"What the telco industry needs to do is bite the bullet and put the power back in the hands of their customers by allowing them to nominate a maximum spend on their account," Corbin said. “If you are on an $80 a month plan you need to be able to say the maximum I want my bill to be is $80. Customers are suffering from the industry’s so-called 'capped' plans, which disingenuously dictate a minimum spend, rather than a maximum one.”
“Every time a new telco product or service hits the market consumers get hit with a fresh wave of bill shock. In the days of dial-up internet it was expensive internet dumping calls, then mobile premium services (MPS), and now excess data charges and global roaming.”
Corbin said the problem of “bill shocks” would not be eliminated until the rest of the major telcos “put the power back in the hands of their customers”.
The move also follows comments by Chapman at the recent CommsDay summit in Sydney that while telecommunication companies have improved at customer service as a result of the RTC public hearings, complaints to the Telecommunications Industry Ombudsman (TIO) were still on the rise since the last quarter of last year.
“Let me reiterate for industry participants - record levels [of complaints] are still being recorded. The 'she’ll be right attitude’ is no longer acceptable,” he said at the time.
Follow Chloe Herrick on Twitter: @chloe_CW
Follow Computerworld Australia on Twitter: @ComputerworldAU
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.