The Impact of Telstra Price Rises

Telstra recently announced that from January 2014 it will increase the call rates on most of its standard residential fixed line plans, including HomeLine Plus and HomeLine Advance. We were curious to see how this affects actual users.

It is of course Telstra's right to raise prices, and one cannot refute their stated reason, which is that increases in their own costs need to be passed on to the customer. Fair enough.

But in a move that would be more stunning if only it were more surprising, Telstra has sought to sell us on the advantage of a price-rise:

By standardising call rates across our consumer plans, it will be easier for customers to compare and select a plan that suits their needs, change as their needs shift and be able to more seamlessly transition to Telstra services on the National Broadband Network when it becomes available in their area.

Ah, the chimerical appeal of standardisation, and the idea that it makes comparison easier. The reality is that having some plans cheaper than others also makes comparison pretty easy. Most customers usually choose the cheaper one. Telstra's further implication is that access to cheaper plans has been stopping people from signing up to plans that suit them better.

Anyway, here at Dog and Bone we have an enormous volume of fixed line call data on file, and can thus quickly ascertain the real impact of changes such as these. The increase overall isn’t enormous, but it is always nice to be apply some figures to it.

I ran a comparison between the existing HomeLine call charges (both HomeLine Plus and HomeLine Advanced) and the new charges that will come into effect next January. I ran these rates over about 104,000 (anonymous) call records. Here are the results:

Table 1. HomeLine Plus Comparison

 

Table 2. HomeLine Advanced Comparison

 

Across the three primary fixed line call rates (Local, STD and Calls to mobiles), these changes generated a ~5% increase for HomeLine Plus users, and a ~6.6% increase for HomeLine Advanced users. (As promised by Telstra, the price increase has also brought those two plans closer together in terms of call value!)

The biggest single jump was 29% for local calls for HomeLine Advanced. Because of the way the STD caps work with these plans, there ends up being a larger STD increase for HomeLine Plus than for HomeLine Advantage. Calls to Mobiles saw only a small increase because the call rates will remain unchanged, although the flagfall has increased from 445c to 49c.

Incidentally, I did not calculate the impact that the new pricing will have on international calls, primarily because these rates can vary so much by country called. It should be noted however that Telstra is removing the 10 or 20 minute call caps to international fixed lines. For those users who make longer fixed line calls overseas, this may have a large impact.

Telstra's announcement of the increased fixed line rates can be found here.