Telstra Is Killing Off Most Existing Plans: How Will This Affect You?

Telstra Is Killing Off Most Existing Plans: How Will This Affect You?
Image: Telstra

Telstra has announced a massive tranche of changes to the company’s structure and operations. And while the news is really terrible for the 8000 employees who will see their jobs disappear, there’s also the broader impact to the rest of the community. The vast majority of Telstra’s phone and internet plans are set to be permanently “retired”. Here’s what this means for existing customers.

Despite the competition that comes from other businesses delivering internet services and mobile network providers offering mobile communications, Telstra is still a major force in every market it participates in. So, what will the changes that have been announced mean for customers?

Telstra’s CEO Andy Penn announced the changes in a blog post as well as during a shareholder meeting today. The new plan is based around four pillars. These are:

  1. Radically simplify our product offerings, eliminate customer pain points and create all digital experiences
  2. Establish standalone infrastructure business to drive performance and set up optionality post the nbn rollout
  3. Greatly simplify our structure and ways of working to empower our people and serve our customers
  4. Industry leading cost reduction programme and portfolio management

Some of these changes have been a long time coming. For example, the establishment of a separate infrastructure business should have happened back in 1997 when the company was first sold off via the sharemarket. For a long time customers suffered as a result of the close relationship between Telstra’s infrastructure, wholesale and retail business units; a level of cooperation that made it hard for third parties to compete in many sectors.

One of the real benefits for customers will come, if the plan goes ahead as Penn outlined, through a massive simplification of the company’s product offerings.

For example, the plan is for the existing 1800 consumer and small business plans to reduce to just 20. Anyone who’s stepped into a Telstra store in search of a plan will know the pain of trying to figure out what their best option is. This simplification will not only be good for customers but also the market as it will make it easier for customers to compare what Telstra offers with other providers.

For business customers that also means some legacy products that are expensive to maintain and support will disappear. The company expects to will move half their customers to new technology stacks over the next three years. If you’re a Telstra business customer using their cloud or other technology services, get ready for some changes.

There will also be an increased use of digital sales channels so procurement processes will need to change as well.

One of the other benefits from the simplification of structures within Telstra is an expected reduction in the number of support calls we need to make, with Penn forecasting a drop of around 33 per cent.

Making the network more secure was also mentioned. Some of the 1500 new roles being created will be focused on cybersecurity as well as information management and software engineering.

Telstra has been through major transitions before. Those with a few grey hairs will remember that Telstra was once called Telecom and before that was a department of the Post Master General, back when the telco was part of the post office.

There was also the merger with the Overseas Telecommunications business (OTC) that brought international calls into the same business as landlines. We’ve had the arrival of mobile and the internet more recently and, frankly, each change has been bolted onto a business that was designed in a different age.

So, the news today has been a long time coming. But it will bring pain. 8000 people will be looking for new jobs soon – although the company is promising to spend $50M on helping them transition to new roles. Telstra customers, meanwhile, will face an uncertain period as they transition from existing arrangements to new ones.

With that said, Telstra has set itself a 2022 deadline to complete the restructuring of the business: even if you’re on a 24-month contract, there should be plenty of time to negotiate a new plan or shop elsewhere without repercussions. If you’re keen to switch now, you can find some current options here.

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  • Hmmmm more Australians out of work, higher prices on Telstra packages, worse service ( which is pretty hard to see that happening as it is so shockingly bad ATM) more outages on mobile and internet network and oh we will employ more international people, who have no clue on how to help or give service!!! Andy Penn would do well to look at this post and hand his multi million dollar paycheck to the company so as to keep the 8000 Australians employed as it is his mismanagement that has caused this mess.

    • That’s actually still valid news. I know a few people who are wondering (worrying) about what the changes meant – whether they’d need new contracts, lose their phone number, etc. So even if the article pans out to “nothing much happening” it’s still useful.

  • They can’t fully retire a plan that you’re on. They can’t force you off your plan if you’re happy with it. They can phase it out, and try to entice you to sign up for one of their new plans, but they can’t fully retire it while you’re still on it.

    I’m currently on a BYO plan on Telstra that is good. I’m not going to switch unless they offer a new plan that’s better than the one I’m on. If there’s no plan better, I’m staying with what I have, and they can’t force me off it.

    • I’ve just signed on with a BYO plan with Telstra about 6 weeks ago, so will be interesting to see how they handle that. I like the plan, it ticks every box I need, so like you I have little to no reason to switch, if I even can. Was the same with my last plan with Virgin Mobile, which was cancelled ages ago.

      I had what I wanted, hence little need to switch. It was only when a couple of offers combined with a new Samsung S9 made it worthwhile that I did. So how do they handle deals where TWO offers combine into the one package? 15% drop in price, combined with big increase in data is a massive bump in value that’s going to be hard to beat.

    • Frankly, I’d be shocked if something doesn’t come along to beat it in the next couple of years. That’s basically the same holding pattern that some Virgin Mobile customers are in with the whole brand phase out under Optus…

    • I’m not sure about that. Maybe on one where you’re under contract still (signed up for 24 months) but I’d imagine the 5 year old grandfathered plans are probably fair game. It might cause a lot of customer outrage but I’d think they’d just say “ok at the end of the current contract period that plan ceases to exist. Here are your options…”

  • “Those with a few grey hairs will remember that Telstra was once called Telecom”

    Whoa! hold on there! I remember Telecom, my dad worked for them back in the 80’s

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