Battlers hit hardest as Telstra imposes above-inflation mobile phone increases in CEO Vicki Brady’s fix push

Telstra will hit battling Australians with mobile phone price rises that are around triple the rate of inflation as chief executive Vicki Brady tries to turn around the chronic laggard.

The nation’s dominant mobile provider said hikes of up to $4 a month would be imposed on post-paid plans from August 27, while the more competitive pre-paid plans would be whacked from October 22.

Some of the most vulnerable pre-paid battlers will be hit hardest, with basic plans rising by $4 to $39 a month — an increase of 11.4 per cent for the offering that limits monthly data to 15GB.

An even-tougher price hike of 12.5 per cent is being imposed on the battlers’ special plan that offers a 70GB data cap lasting up to six months. Its price rises from $160 to $180.

All of the hikes, announced on Tuesday, appear to be above national inflation of 4 per cent in the year to May 31. In the more comprehensive quarterly CPI, 3.6 per cent inflation was reported for the year to March 31.

The big hikes reflect Telstra’s decision unveiled on May 21 to abandon its policy of increasing charges in line with the consumer price index.

This tougher policy was revealed at the same times as Ms Brady moved to win back investor support by outlining big cost cuts — including axing almost one-in-10 of its workers.

Defending its above-inflation hikes, Telstra boasted it still had Australia’s biggest mobile network and said there were a “range of factors that go into any pricing decision”.

It claimed the changes “provided greater flexibility to adjust prices at different times and across different plans based on their value propositions and customer needs”.

“Telstra has balanced cost of living pressures it knows some of its customers are experiencing, with its need to continue to invest to manage technology evolution and continued strong customer demand on its mobile network,” it said.

The price of its basic post-paid plan with restricted download speeds and a 50GB monthly data limit is set to rise by $3 to $65 — an increase of 4.8 per cent from August 27.

The so-called essential plan, with 180GB of data and unrestricted speeds, will increase from $72 to $75 a month.

A similar 4.2 per cent rise will be imposed on the premium plan when its monthly charge rises from $95 to $99 a month. That plan has a 300GB monthly data limit.

The roughest treatment is being spared for pre-paid customers — with the $4 hike being imposed across the board on its monthly offering.

While luring new customers with $25 recharges until October 7 to its mid-tier pre-paid plan with a 35GB monthly data limit, the charge for new and established customers will rise on October 22 by 7.2 per cent to $59 — arguably double inflation.

The 70GB monthly plan prices rises by 6.2 per cent to $69.

The price increases were welcomed by analysts and share market punters.

UBS analyst Lucy Huang said her group believed Telstra would lead the market “on mobile price recovery”.

“It is pleasing to see above-CPI type price rises on the majority of mobile plans in both post-paid and pre-paid,” Ms Huang said in a note to investors.

She said her team expected customer churn rates to remain low, with the biggest customer switching occuring at the more price-sensitive lower end of the market.

Telstra shares were up about 2 per cent in early trading Tuesday at around $3.74.

But the shares are still more than 10 per cent down on peaks reached in the first half of 2023 and less than half their price at the turn of millennium.