Telstra drops HFC speed tiers, probably increases margins

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Telstra drops HFC speed tiers, probably increases margins

Telstra has removed download speed tiers from its HFC cable broadband network.

The carrier previously charged extra for faster downloads. Basic plans saw speeds on its HFC network reach 50 Mbps. An extra $20 or $30 per month offered uncapped speeds of up to 100-120 Mbps.

Telstra customer value management executive Jana Kotatko confirmed to CRN that around 500,000 customers across Australia is expected to benefit from the free “speed boost”.

"There’s currently a high demand for NBN connections in some areas, and as a result NBN Co is facing delays in getting people connected," Kotatko said.

"We’re therefore recommending our existing Telstra HFC customers in these areas hold off on ordering an NBN service until the connection times reduce."

Kotatko added that if customers hold their NBN transition orders, it should "take some congestion out of the migration pipeline", and allow for faster connections to NBN Co's HFC for customers on ADSL or for those looking for a new broadband connection. 

"Our engineers have carefully assessed this bandwidth upgrade and confident, based on the current usage patterns, that we don’t expect any major congestion issues," Kotatko said.

"This is part of Telstra’s commitment to improving our customer experience. We’ll contact our customers to let them know when the time is right to make the move to NBN."

It's also part of Telstra's plans to milk its assets for as long as possible. NBN-over-HFC often isn't as fast as Telstra's own HFC broadband service. It also drives lower profits to Telstra!

Dropping speed tiers is therefore both handy for end-customers and a way for Telstra to keep earning higher margins for as long as possible before NBN connections wholesaled by NBN Co become the only game in town.  

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