Telstra ditches lock-in contracts, slashes plan line-up

Telstra has radically reshaped its collection of post-paid mobile plans for consumers and small businesses, whittling down around 1800 plans to 20 core offerings.

The changes to the telco’s line-up of mobile plans follows a similar simplification push last year for its broadband offerings and is a key component of its ‘T22’ strategy. When Telstra’s chief executive, Andy Penn, in mid-2018 announced T22, he said the strategy had four key pillars.

Penn told a June 2018 briefing on T22 that those pillars comprised “radically simplifying our product offerings, eliminating customer pain points and creating all digital experiences; establishing a standalone infrastructure business unit to drive performance and set up optionality post the rollout of the NBN; greatly simplifying our structure and ways of working to empower our people and serve our customers; and, finally, delivering industry-leading cost reduction programs and portfolio management.”

Telstra in April launched a revamped loyalty program (‘Telstra Plus’) as part of T22.

At the start of T22, Telstra “made a really bold statement that we were going to change the way we did things and the way we serviced our customers,” Michael Ackland, the company’s group executive, consumer and small business, today told a press briefing.

“Today we’re announcing the next stage of that  transformation and we’re announcing today  our new flexible mobile plans.”

Telstra now has four key mobile plans: Small (15GB of data a month for $50); medium (60GB for $60); large (100GB, $80); extra large (150GB, $100). The telco also has four data-only plans: 5GB for $15 a month; 10GB for $25; 50GB for $50; and 100GB for $75. Both mobile and data-only plans include Telstra's sports streaming service.

Ackland said that Telstra was the first major Australian telco to do away with lock-in contracts for mobile and broadband services for consumers and small businesses.

“That means our customers will be able to change their plans up to once a month,” he said. “That could mean moving up or moving down in terms of data inclusion and changing their plans.”

“We’ll be offering completely transparent options to buy a device and to pay that device back over 24 or 36 months or to simply bring your own device and attach it to our plans,” Ackland said.

Additional services, such as entertainment options, can be bolted-on to a plan, he said.

Ackland said that Telstra could also claim another first by doing away with excess data charges. Instead, the company will throttle speeds to 1.5 megabits per second when a user’s data cap is reach. A user can use Telstra’s 24/7 app or contact centre to shift to a plan with a higher data allowance if they require full network speeds for the billing period.

T22 also involves major changes to Telstra’s workforce, with the company by the end of June expecting to have earmarked 6000 roles that will be cut.