Are you paying a premium for your phone and internet service without even realising it?
If you’re a Telstra customer, a new analysis suggests you could be forking out up to $1000 more each year compared to those on the cheapest available plans.
This so-called ‘Telstra tax’ is raising eyebrows among consumer advocates and sparking a fresh debate about value, choice and what we’re really getting for our money.
What is the ‘Telstra tax’?
The term ‘Telstra tax’ refers to the extra amount Telstra customers pay for the company’s premium services compared to the most budget-friendly options on the market.
According to consumer advocate Joel Gibson, the difference can be staggering—up to $300 to $400 per device or service, and potentially more than $1000 per household each year.
Gibson, who now runs the consumer advice platform Joel Kills Bills, teamed up with telco comparison site WhistleOut to crunch the numbers.
Their analysis compared Telstra’s plans with the cheapest alternatives, factoring in the upcoming 1 July price hikes.
The result? Many Australians are paying a hefty premium, often without realising they have other options.
What are you paying for?
Telstra, for its part, rejects the idea that customers are being unfairly charged.
The company points out that its plans aren’t directly comparable to the bare-bones offerings from budget providers.
A Telstra spokesperson said, ‘There is no “tax”. More customers choose Telstra because they see the benefits of being with us.’
So, what are those benefits?
Telstra highlights several key points:
- Network coverage: Telstra boasts the largest mobile network in Australia, with the best regional and remote coverage. For many rural and regional Australians, Telstra is the only reliable option.
- Exclusive features: Only Telstra’s Upfront Mobile Plans offer access to new features like Australia’s first satellite-to-mobile text messaging service, which can be a game-changer for those in remote areas.
- Service and support: Telstra invests heavily in customer service, network reliability and additional perks that budget providers may not offer.
It’s also worth noting that some budget providers, such as Belong, ALDI and Woolworths Mobile, use the Telstra Wholesale Mobile Network.
However, this network only covers parts of what Telstra’s own customers can access, so coverage and speeds may differ.
How much more are you paying?
Let’s break down the numbers.
With Telstra’s 1 July price increases, most phone, data and internet plans will rise by $3 to $5 per month.
While the cheapest mobile and internet contracts, as well as pre-paid and 5G home internet plans, are staying flat, the standard NBN plan will soon cost $408 more per year than a comparable plan from budget provider Exetel.
And according to recent government testing, Exetel even offers faster download speeds—though you’ll need to buy your own modem.
Add in a mobile plan and a mobile phone, and the annual difference can easily hit $1000 or more for a typical household.
Why do people stick with Telstra?
Despite the price difference, millions of Australians remain loyal to Telstra.
For some, it’s about peace of mind—knowing they’ll have coverage wherever they go, especially in regional or remote areas.
For others, it’s the convenience of bundled services, customer support or simply the comfort of sticking with a familiar brand.
But as Joel Gibson points out, ‘There’s nothing wrong with paying a tax if you know that you’re paying it and you know what you’re getting in exchange for it, but we suspect many are unaware they have a choice.’
What’s next for Telstra customers?
With NBN Co also raising its wholesale prices by 3% this financial year, telcos are passing on these costs to consumers.
It’s more important than ever to review your bills, compare your options and decide what you really need from your telco.
Your turn: Are you paying the ‘Telstra tax’?
Whether you see it as a necessary investment or an unnecessary cost, the discussion around the so-called ‘Telstra tax’ highlights the broader question of value for money in today’s telecommunications landscape.
With prices set to rise and more providers entering the market, many Australians are beginning to weigh up whether sticking with a major provider like Telstra still delivers the bang for their buck.
Do you think Telstra’s premium service justifies the higher cost? Have you considered switching providers, or are the added features and coverage worth the extra spend for you? We’d love to hear your thoughts and personal experiences—share them in the comments below.
Also read: Could your emergency calls be at risk? Here’s what the Telstra fine means
I use Telstra for all of my phone stuff but use a satellite connection for internet because it is lighting fast. Have always been with Telstra because one can go to an outlet and they will help with any problems with no charge.
I have been a Telstra customer this time since 2006, also a retail phone sales person since the late 1990’s. In November last year I moved my NBN to Superloop leaving my mobiles with Telstra. At the time I moved the NBN my home phone was part of the internet NBN FTTN connection, Telstra on a 50 plan could only manage 30 as a download speed changing to Superloop the internet flooded in at 56 before the FTTP was connected and using the same modem. The difference, no phone. Telstra didn’t give phone option. Superloop, don’t give toss about help or forcing a phone option.
I have been with Telstra for about 35 years. Their customer service used to be excellent. Last year I had a problem that when I sent e-mails to anyone, they did not receive them. I called Telstra who referred me to technical support. They called after a few days, I had difficulty understanding an Indian accent. They said they could not help me and would refer me to someone else in tech. support. After another few days my wife answered the phone to another person at Telstra who my wife could not understand and said she would get me. They hung up and I have never had any more contact with them. I could not get anyone at Telstra to help me. Their customer service seem to be run by immigrants who do not care about customers.
I used to be always Telstra. Worked for them twice in the 1970s-80s.
Finally gave up on them when they kept on putting up their prices which I couldn’t afford.
I’m now with Flip Connect for both my mobile phone & internet (Seniors plans), and couldn’t be happier (Optus carrier, but only 4G, which doesn’t worry me). I can get full coverage where ever I go in NSW. My phone has just gone up by $5 pm, and NBN $4 pm, which wipes out the pension increase last March.
I’m on the lowest phone with data plan, as I rarely use data, and have never gone anywhere near the limit since being on the plan.