The Federal Court has ordered Telstra to pay an $18 million penalty for breaching the Australian Consumer Law after it reduced upload speeds for nearly 9,000 Belong customers without informing them.
Between October and November 2020, Telstra shifted 8,897 Belong NBN customers from plans offering maximum upload speeds of 40 Mbps to new plans capped at 20 Mbps, while keeping the download speed unchanged at 100 Mbps. Customers were not notified of this change at the time.
ACCC Commissioner Anna Brakey said: “The $18 million penalty sends a strong message to all businesses that they cannot mislead consumers by making changes to key aspects of a service without informing customers of those changes.”
Telstra has 24.2 million mobile phone customers on its telecom network in Australia. Telstra reported revenue of AUD 23.45 billion in 2024.
In addition to the penalty, Telstra will remediate customers with credits or payments amounting to more than $2.3 million. Each affected customer will receive $15 for every month they were placed on the downgraded plan. Belong is contacting impacted customers via email to finalize payments under a court-enforceable undertaking.
The case highlights the ACCC’s focus on misleading pricing and claims in essential services, particularly telecommunications. Telstra, which co-operated with the ACCC during proceedings, has also been ordered to contribute to the regulator’s legal costs.
Launched in 2013, Belong is Telstra’s low-cost broadband and mobile brand. The upload speed reduction stemmed from NBN Co’s introduction of the cheaper 100/20 Mbps wholesale tier in May 2020, which costs service providers $7 less per month than the 100/40 Mbps plan.
Telstra has faced several significant penalties in recent years for breaching consumer and competition laws in Australia.
In 2021, Telstra was ordered to pay $50 million in penalties after admitting it had engaged in unconscionable conduct when sales staff in regional and remote stores signed up Indigenous consumers to mobile phone contracts they could not afford.
In 2022, Telstra was fined $1.5 million by the Federal Court for failing to give proper notice to more than 42,000 customers before restricting their landline services due to unpaid debts.
In 2020, Telstra paid a $10 million penalty for misleading customers about third-party charges being added to their mobile bills without adequate disclosure, through its premium billing service.
The company has also received penalties and enforceable undertakings from the ACCC in relation to misleading broadband speed claims and unfair sales practices, underscoring repeated regulatory scrutiny on its consumer dealings.
Baburajan Kizhakedath
