A federal court has said that Australia’s largest telco, Telstra, made false or misleading representations relating to the upload speed of residential broadband internet services supplied to nearly 9,000 of its Belong customers.
It follows court action initiated against it by the Australian Competition & Consumer Commission (ACCC) in December 2022.
The ACCC says that in October and November 2020, Telstra migrated 8,897 customers who were on a Belong NBN plan with a maximum download speed of 100 megabits per second (Mbps) and a maximum upload speed of 40Mbps, to a service with a maximum upload speed of 20Mbps.
It says that Telstra did not notify customers of the reduction in the maximum upload speed in their service.
“Telstra’s failure to inform customers that their broadband service had been altered denied them the opportunity to decide whether the changed service was suitable for their needs,” said ACCC Commissioner Liza Carver.
“There was no reduction to the price Telstra charged its customers even though the cost charged by NBN Co to Telstra was $7 a month less for the new, lower speed service.”
Telstra has admitted that it had represented to 2,785 of the Belong customers, who acquired the 40 Mbps plan between 1 May 2017 and 19 September 2018, that they were receiving a Belong NBN Broadband service with a maximum upload speed of 40Mbps, when in fact they were not.
Telstra allegedly continued to make these representations by failing to update customers once the unilateral migration had occurred.
The telco acknowledged its failure in 2021 and provided a one-off $90 credit to these consumers.
The court also found that Telstra had made false or misleading representations to a further 6,112 Belong customers who had acquired the 40mbps plan between 20 September 2018 and October 2020.
While Telstra never stated the maximum upload speed to these customers, the court noted that these consumers would have reasonably construed the service to which they were bound was the same in all material aspects, including upload speed, as it had always been.
“It is simply unacceptable for a supplier of essential services to mislead consumers when reducing the quality of the services it is providing to its customers,” said Carver.
“We expect better from the country’s largest retail broadband internet service provider and believe these customers, who ultimately received a service they did not agree to, should be compensated.”
The court will determine the penalty and any consumer redress after a hearing on a subsequent date.
This isn’t the first time that Telstra has been pulled up by the country’s consumer and competition watchdog. In August 2021, the ACCC initiated proceedings against Telstra for making alleged false or misleading representations in their promotions of some 50Mbps and 100Mbps NBN plans. Telstra was subsequently ordered to pay $15 million in penalties in that case.
The latest legal setback for Telstra comes a day after the company posted an overall net profit increase of 6.5% to $1.03 billion in the six months to 31 December 2025.
