BigPond discount angers competition

While rival ISPs in the lucrative Australian market are angered over Telstra’s decision to implement dramatic price cuts to consumer broadband plans, the telco’s customers are smiling all the way to the bank with savings of up to $100 per month on high end plans.

The move comes as Telstra plans to win back market share ahead of the construction of the $43 billion national broadband network, following its historic $11 billion deal with the NBN Co and the government, under which Telstra will be paid a fee for every customer it moves on to the new network.

Telstra's competitors are upset about the changes because they undercut the price Telstra charges its wholesale customers. They say the cuts are an audacious bid to squeeze them out of the market.

National internet service providers Internode and iiNet have referred the price changes to the competition regulator, saying Telstra's wholesale charges are anti-competitive.

Telstra has defended the price changes claiming there is no basis to the claims of the rival ISPs, saying they can gain access to the telco’s network for only $2.50 a month and use their own equipment to make healthy margins.

Telstra also said it regularly discusses its wholesale prices with its customers and has invited any concerned parties to raise the issue.

Meanwhile, Telstra has appointed Nora Scheinkestel a non-executive director.

Dr Scheinkestel is a consultant to government, corporate and institutional clients in areas such as corporate governance, strategy and finance and holds directorships with AMP, Orica, and Pacific Brands.

She will join the Telstra board from August 12, pending shareholder approval at Telstra's next annual general meeting on November 19 in Melbourne.