Archive for 22/12/2013

Telstra’s misleading letter to business owners


Some of you may have received a letter from Michael Patterson (reproduced below), Telstra’s Area General Manager for Tasmania, regarding the impending switchoff of the copper network and the need to switch over to the NBN.

I want to point out one place where he may be technically correct, but I believe he is being very misleading. He states that “… if you’re still within your contract, we can transfer your services to a similar plan on the new network, without triggering early termination charges under your current plan, if you move to a plan with an equal or higher monthly cost.

What he neglects to say is that changing over to the NBN is very likely to be a change in the terms of your contract. Under Australian Consumer Law (extended to small business under the new TCP code) you therefore have the right to decline the new “offer” and terminate any existing contract without penalty┬áregardless of what plan you move to or even stay with Telstra at all. In order words you aren’t locked into continuing your existing contract and can terminate it and move to another provider.

This situation is particularly clear if you are required to take on (and pay for) an extra service (such as the new “data only line” Telstra are now offering to allow fax, eftpos, and alarms to continue to work) as part of the transition. In other words you end up paying more for the same service as you’re getting now.

I have been working with a client who took out a bundled internet and phone contract (BizEssentials) for 2 years in April 2013 – the contract will extend well past the disconnection date of May 2014. Because Telstra are not able to support fax, eftpos & alarms over the NBN they have recommended the client take on a “data only line” (actually a single channel ISDN line) at the extra cost of $49.95 per month (plus calls – he is currently getting local and STD calls for free as part of his bundle).

In discussions with the Telecommunications Industry Ombudsman (TIO), they have indeed confirmed that Telstra do need to release the client from the contract without penalty (early termination charges), since they are unilaterally changing the terms of the contract. They have recommended that I escalate this within Telstra and if that proves unsuccessful to get them involved.

I will let you know how I get on.

Update 14/01/14: Following a call to Telstra’s call centre on behalf of a client, they have released the client from the contract – he is now free to choose whoever he likes to transition him to the NBN.