The Problem With Australian Telcos

Anyone who has ever had a mobile phone service in this country -- be it pre- or post-paid -- has a bad experience to share. Bill shock, bad service, crappy coverage: we've seen it all. But there's one overarching problem that is more significant than all of those combined: the idea of "the average customer".

When a telco considers how to change or adjust its consumer offerings, it will call a bunch of people into a room to figure out how a proposed adjustment might affect people. There are then clever forecasters in the background who look at the information collected and compare it to the usage currently on the network. Who is using what, when and by how much is the question they look to answer.

These forecasters then prepare pleasant looking graphs and PowerPoint presentations to tell bigwigs what they found, and in these meetings, people always talk about "the average customer": the middle ground that will presumably please the most amount of people at once, while driving simplification of a product set.

What we've noticed over the last three years in particular is a good response towards the needs of voice and text customers, but a terrible response to the needs of data users.

The punch line? An ongoing downward spiral if data allowances across the big three telcos --Telstra, Optus and Vodafone-- paired with more expensive plans. Less for more is the new and disturbing industry standard.

Even as recently as this afternoon, Optus reduced its data allowances yet again, giving customers less for their money when it comes to data. Admittedly, Optus is being more flexible about adding more data when people go over their allowances to reduce bill shock, but that's far from the point.

The point is that by averaging out the needs of customers -- the needs of high-usage customers like you and I and the relatively low-needs of people like our parents -- we're left with an awkward middle ground that is too expensive for low users and too limited for high value users.

The last thing this industry needs is more product simplification. Simplification is fantastic for handsets, but when it comes to data plans in particular, there is no such thing as too much diversity.

The ACMA found in a recent survey that the only way data usage is going is upwards, but the only way data allowances are going is down. Mobile data usage close to doubled in 2011-12, and this trend is expected to continue.

Telco industry watchdog, ACCAN has also noticed the decline. It praised Optus for more flexibility and better plan structured, but the downward slide of data allowances continues to trouble.

"However we're disappointed the new plans don't come with more included data given the booming rates of data consumption. Virgin for instance offers 3GB of data for around the same price as the optus 1GB plans. Separately, Optus has also changed prices on its mobile broadband plans recently and reduced included data," noted Asher Moses of ACCAN.

Time to change the record, telcos: let's have more choice, more data, more plans and less "average".

Shouting man image via Shutterstock



    Honest answer Luke - When was the last time you went near to using your data allowance ? I'll tell you mine. I nearly hit 2GB last month - and I am a business user, checking emails, Maps and browsing FB, 4Sq and twitter when I commute in and out of the CBD to North Sydney - the rest of the time I'm sitting on my work wifi or at home again on wifi.

    The Telcos know this - they use all of our info info as a gauge of what is actually being used and are squeezing the living daylights out of their plans for similar users like me and you. Its call ARPU. I've never been hit with over plan charges. So i guess my moral is - Choose the plan that's best for you.

    And mine is just right. Thanks Voda.

      I regularly hit 2.5-2.7gb/month. Which is all the normal stuff plus a bit of streaming. I needed to buy a bolt on pack for my plan, otherwise I'd be paying through the nose because I would always be over the limit.

      I'd like to start this answer with the notion that my particular situation isn't what inspired this story.

      Honest answer? The last time I went over my data usage was two months ago when I managed to ring up ~$475 just in excess data on a $89 Telstra plan. I have since added more data packs and been assured that usage notifications will be sent in future.

      It's great that you haven't been hit with overcharges, but you're missing the whole idea of this article: everybody is different and trying to hit "the average customer" is bad for all of us.

        I'm on Virgin. I check my usage every day using an app and when I know I'm close to using up all my data, I'll just buy additional bolt-on data. Cheaper than actually running over.

        This helps too because depending on what I'm doing that month, I might use anything between 250MB to 750MB.

        Just chiming in to say the exact same thing happened to me. Also on the $89 Telstra plan and only got the notification after I had already gone over my limit (this happened when I moved and was without broadband for several weeks). Their current usage notifications can be 24-48 hours behind actual usage in my experience.

        Yep I get that .. I suppose i was edging towards the "get an app that tells you" direction - If you know what your cap is then make sure you stick under it - There are plenty of apps that allow users to gauge what's left - Otherwise get a bigger plan or indeed a bolt on ...

        There has to be an ARPU - otherwise the carriers wouldn't be able to operate. Our ARPU is different from say M2's ARPU.

        4G certainly isn't going to help anyones data usage and of course the Tier one carriers want you to overspend ! It's their cream and cherry in one.

        My advice would be to get an usage app like Megabytes and a data proxy like Onavo Extend that squeezes the living daylights out of your traffic.

        and been assured that usage notifications will be sent in future.
        The problem here is that Telstra only promise to let you know within 48 hours of reaching 50%, 80% and 100% - and this is totally compliant with the ACMA Telecommunications Consumer Protections Code!! I still can't believe that this amount of lag was allowed in the revised code that was published last year.

        I was bitten badly once before when I didn't realise I had a download running, while tethered during a weekend away. If I'd received an immediate warning at 50% or even 80%, I would have switched it off and stopped using data for the rest of the weekend. But instead I found out a day or so later, when I was already hundreds of MB over my limit, and had to negotiate with them to add a data plan and have further fees waived "just this once".

        Unless you were somehow promised a way to receive more prompt warnings?

          telstra can't even provide me with any warnings since my sim card is in an ipad

          i am currently refusing to pay a $600 excess usage charge because they failed to send any notifications after previously promising to do so and failing to provide anything close to up to date info on my usage charges

          These over quota warnings that can be delayed up to 48 hours with the Labor Government's blessing are the greatest criminal con act performed on the public I have ever seen. Buy a prepaid 1GB plan. Try to download 1byte over 1GB. You can't. Their systems pick it up instantly and cut you off. But if you're on a postpaid with obscene over quota charges, they let you carry on downloading and racking up $100's of dollars until they feel like getting around to warning you. The Telco's are deliberately avoiding sending timely warning with the government's blessing via their toadies in the ACMA.

      If you know that you only have 2Gb allowance a month you will use wifi as much as you can to keep that down. Its learned behaviour due to a low data cap. Then the Telcos decide that people arn't using as much data and cut allowance rates, which means people will do more while tethered to a wifi connection to save thier allowance for when they are out of wifi range. Then the Telcos...

        Honestly the very idea of having such low data caps is archaic in the first place. Compare our telco's data plans with what is offered in the US or in Europe. What we have is a joke.

    I go no where near my data allowance because of fear of bill shock. Its not that people want or need less data now its just they are using less to make sure they dont get stung. This is very bad news

    Is it an "average" customer, or is it
    "data usage is going up" - therefore lets reduce data on our plans to push people up to the next tier and make more money! We'll increase call value which noone ever gets close to as it is to make it seem like we're giving with one hand.

      It's the same a credit card companies. The "cost of doing business" for credit card interest rate increases is always quoted but it's just about making more money.

    I definitely limit the usage of my data. I have iTunes match, and I really have to think about when and where I want to download stuff with only 2gb of data a month. The same goes for streaming anything. I don't want to have to think about this. I just want to use my phone!

    I find the pestering phone calls by people claiming to be Telstra employees - recommending that I sign on with a service provider I have ever heard of and how my phone charges will be reduced to be offensive.
    The Government should just inform them all that All crime is Treason and Resisting Arrest under charge of Treason carries a death sentence.

    telstra used to have 2Gb data on a $50 prepaid , and it reduced to only 800Mb data on a $50 prepaid since mid 2012 :(
    I wondered when will they increase the data allowance again :(

      I'm on a $59 plan with Telstra which gives me 1.5 GB (+ $15 towards my phone repayment) each month, and it's the perfect amount for me, as I always use between 1.1 - 1.3 GB per month. Telstra doesn't offer this plan anymore; instead the closest is a $60 plan which only includes 1 GB of data and $10 towards the phone repayment each month. So If I went on a new plan I'd be paying more for the phone, plus I'd have to buy a data pack on top - not gonna happen. The only advantage of the newer $60 plan is an extra $50 of calls ($600 instead of $550) but I never go anywhere near my current $550 limit, so it's useless to me.

      If Telstra let us sacrifice some call credit for more data, it would be perfect. Unlimited SMS is cool, but almost everyone I text uses either iMessage or Facebook Messenger (of the last 12 people I've text, only 2 of them were via SMS).

        I'm still on one of the grandfathered $50 incl 1GB plans. I'm off contract now and constantly have the business centre calling me to try and get me on to a new contract. I keep telling them that I don't want a new phone, I don't want extra calls, I only want an additional data pack included. And they just can't do it, even though I'm bringing my own phone. Crazy.

          Telstra prepaid: $50 recharge gets me 800mb then I buy a browse pack. So for my $50 I get 3.8,GB

    All Telcos should come up with an option to hard stop to data once you have reached you data allowance. Then the customer should be required to make a call to the customer care to get the data back switched on. This way everyone can be rest assured that they will not go over the data and if they need it to be, can add data packs at the right time.
    But no one will do this coz they wouldn't be able to charge massive amounts for just a bit of overage. Due to 4G speeds, you can really gobble a huge amount of data pretty quickly without even realizing it.

      Telstra announced a long while ago that they would be rolling out a data-shaping solution like they do with internet; slowing down speeds when you reach your data limit, instead of charging extra. A year and a half later we're still waiting. (Also check the article linked in the first post, dated 7/11/2011)

    I was with Voda for about 2 years on the unlimited $45 plan. It had 500mb of data included. I never went over. My new plan has 6gb of data. It's amazing how much data you can use once you stop paying attention and using wifi etc. Now my phone is a hotspot for my nuxus 7 and i'm using about 4-5gb a month...

    The only way they will implement anything like a data shaping plan is if the government forces them too, they make so much money off excess data charges that its simply not worth it for them to make it easier for their customers.

    Telcos gave everyone loads of data in the past few years so you would get used to using as much as possible. Now when you are used to it, they want to make money out of the data, as they are not making as much profit from voice and SMS anymore (especially thanks to iMessage). So they reduce your inclusions, and give you data packs to spend more!
    Telcos are out there to turn a profit for their shareholders, that is the bottom line! Just need to do it in a way that appeals to the "average" customer and can maintain profit and market share!

    Android 4.1 has a built in data usage monitor.
    You can set the start and end date of the monthly period, the allowed limit and points where you want a warning notification. I've found it to be pretty accurate when compared with the numbers returned by the widget showing the data used from my carrier.
    (At least it does on my Galaxy S2, that may be a Samsung only thing.)

    But we do need higher data quotas in general. Also more for fixed line connections.

    This is why I went Kogan. 6GB of data for 24 dollars a month with speeds around 6-7Mb/sec

    I have always been with Telstra. I have never gone over a data quota and I never think about how much data I have (It may be 1.5GB/month). I use a wide range of services and the plan I have is good for me. I guess it just goes to show that if you choose the right plan you won't have any problems. So stop blaming the telcos and have a look in a mirror to find the real guilty party.

    All the indices point to us sending less SMS messages in the future and making less voice calls. Facebook, Facetime, Skype, Kick etc etc are the future of communications. Optus knows this and so do the other Telco's. That's why they are trying to keep us using standard voice and SMS services. If we ever get a decent NBN in Australia and free WIFI becomes ubiquitous then mobile networks will go into decline They all know this.

    If data use is rapidly increasing as reported then I would assume it is no longer a matter of providers choosing not to cater to the high end market but rather they are using limited plans and high price signals to tell people to slow down.

    Anyone who has used voda at all or people who work in major CBD areas can attest there just ain't enough throughput available. Personally I would prefer a limited plan that is usable to unlimited usage I am unable to access.

    After being in international locations where data is approx $30 per month for unlimited, I notice my usage and experimentation of using new sites is curbed because I am wary of going over. I've an 11G data w Telstra and go close to using all each month. My concern: Australia is going backwards on new tech if data isn't easier to gain.

    Hot tip if you significantly go over your usual amount, the regulations are that telcos notify you of this. The TIO website form is great for disputing charges which are always dropped in my experience owing to large penalties imposed on telcos by TIO. Stand up for changes to poor processes and don't pay excessive charges.

    They all will be dropping the data, by sept the data on all phone plans will. You will see 1/3 to 1/2 dropped off all data & phone plans. If the other idiots get into government NBN max speed 25m/sec. Shit people will move to Vodafone 4G. Now that is sad?!?!. All the telco's know they will have the fastest Internet service and with no competition from NBN!.they will be in the money, your money!.

    I pay $10 a month for an extra 2Gb on top of the 250Mb that comes with my plan and I never get close to using it all, even though I usually tether my Playbook to the phone because I am too lazy to get up and turn my modem on. As long as you can bolt on extra data I don't see why there would be an issue here. Surely that is the ultimate in flexibility? For me, the alternative would have been to spend another $50 a month on a plan that exceeds my call/SMS needs by an order of magnitude. In fact, the best solution might be to include zero data and offer bolt-on packs for those who need/want it.

    I've never had bill shock, if you know your usage well and keep everything monitored properly, there is no way you could get it.

    In terms of service, besides the initial calling for porting/opening a new account, I don't need to deal with customer service (not having bill shock helps)

    Even with "small" telcos, the service is great. I've been with virgin, dodo and now TPG. Dodo is my favourite so far, they had lots of tools for you to keep track of your stuff without having to call them all the time. Pity they couldn't offer me the same plan for contract renewal.

    I don't even go close to the 6GB Kogan gives me for my $29 per month.

      that's cos Kogan does not allow you to, they snip you off with no warning before you know it, your service is already disconnected, why do you think so many people were upset with Kogan?

        I made the change over from the start back in December. Haven't had a problem. One month I did actually use the 6GB (in 4 days while traveling for work). I simply recharged my $29 and away I went again.

    Jou just gotta bear in mind that the average user, is using 700mb (according to an study by optus on their customers). It's also very expensive to maintain something such as a 4g network, so people on unlimited plans and not using data, are taking up space on allocated data when it comes to the internals of the telcos. Because the average is low, the justification of only selling low is easy to make.

    I think about 3 gigs as standard is pretty acceptable. Also data allowance, both pre and post pay needs to be charged per kb not the next nearest mb!!!!

    United States have a huge population and after customer revolt, AT and T is bringing back all you can eat chinese. Same with all the other little ones like Criket etc. How is it that they can do it? I am sure their bandwith is jam pack with mango jam.

    Folks, this is a country of bullies, cheats and thieves, run by bullies, cheats and thieves, for the benefit of bullies, cheats and thieves. Any questions?

    Voda have started sending SMS notifications for both Data and $$ use. It is better than not having a notification at all. I guess Australian Telcos are adopting standards from other countries where you pay more fro data etc. Luckily we still have MVNOs for somewhat cheaper offering.
    Companies need to make lots of money to (1) fund infrastructure. 4G doesn't come cheap. (2) and to pay their fat execs + shareholders. The more the population grows, the more congestion you will face, the better the network will need to be, and therefore companies will have to spend big bucks.
    sorry guys, this is the evil circle of life.

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