Telstra Isn’t Charging ‘Extra’ For 5G But Everyone’s Getting a Plan Price Hike

Telstra Isn’t Charging ‘Extra’ For 5G But Everyone’s Getting a Plan Price Hike
Mobile phone service concept - Woman texting with question marks on a blackboard.

Last year Telstra announced it would charge some customers for 5G  access from July 1, 2020. With one day to go Telstra will no longer be selling 5G as an add-on. But it has raised its prices and its cheapest plans will still only have 4G access.

Telstra 5G changes

On Tuesday Telstra announced a huge plan refresh for its consumer and business mobile customers. The biggest changes are to the pricing and data inclusions. Most plans are going up by $5 a month, but also get a lot more data.

The other big announcement was about 5G. For the past 13 months we wondered whether Telstra really would charge extra for it. We even predicted a change in stance in an a recent 5G op-ed.

And as it turns out, Telstra isn’t. At least not technically.

From July 1, 5G access will be included for free in Telstra’s new Medium, Large and Extra Large plans.

“Importantly, following the conclusion of our 12-month free 5G trial, we have decided not to charge a separate fee for 5G on our new month to month plans,” Michael Ackland, Group Executive of Telstra Consumer & Small Business, said in a blog post.

“Customers will be able to continue getting 5G if they are on eligible plans or by switching to our Medium and above plans.”

Telstra’s Small plans

While Small plans will not get free 5G access, Telstra can claim it is not charging extra for 5G thanks to a technicality.

Ackland’s blog post reveals that customers on a Small plan who have a 5G handset will be forced onto a Medium plan if they still want 5G access.

To sweeten the pot, Telstra will be giving these customers a $10 monthly rebate for 12 months. This basically means that customers will be credited the price different between these two plans for a year if they’re that keen on 5G.

If you look at the new plan pricing, it’s easy to see what Telstra is is doing here. If the $15 a month ‘Bolt On’ model was still in effect, it would actually be cheaper for these customers to upgrade to a Medium plan. Plus they would get double the data. This renders the bolt-on 5G system superfluous. So instead, Telstra is making Small customers upgrade if they want 5G access.

The telco has also stated that only a “small” number of customers will be effected by this change.

5G charges moving forward

Forced plan migration aside, Telstra is no longer leading the pack on charging extra for 5G. Until today it was the only telco to confirm it would. Comparatively, Vodafone and Optus have simply declined to rule the possibility out.

That being said, 5G is clearly still a premium product. The minimum spend to get it is on Telstra’s new plans is now $65 a month on postpaid and $60 a month on prepaid. Despite the extra data, this still isn’t cheap. You may not have to add 5G on, but you still have to pay more for the plans now.

And these new prices will certainly help with some of the 5G roll out ROI. Around 4 million Australians already on these ‘newer’ plans, most of which are going up by $5 a month. The Extra Large plan is going up by $15 a month. That’s a minimum of $20 million extra revenue Telstra will be collecting each month.

Gizmodo Australia has asked Telstra whether it will consider charging extra for 5G in the future, such as when mmWave is rolled out.