Telstra is milking you dry!

Consumer groups and customers are outraged as Telstra has resorted to charging their customers increments of one-tenth of a cent. This method of payment stands to reap millions of dollars in additional revenue for Telstra.

Telstra has approximately eight million customers and by a 0.1 per cent increase adds $10 million to their profits.

Choice's Christopher Zinn stated that when you multiply this across their customer base, it becomes quite a substantial revenue stream. He further stated that for Telstra it was pennies from heaven.

Teresa Corbin CEO of Consumers' Telecommunications Network stated that the move showed how desperate Telstra were to push their bottom line. She went on further to suggest that there should be some sort of investigation by the ACCC.

A spokesman for the ACCC said that the watchdog had no role in what was a "commercial decision by Telstra."

Paul Budde Telecommunication's analyst stated that when combined with other billing changes, such as charging in 30-second blocks rather than by the second, then you are talking about huge amounts of money.

Telstra customers have been angered by these charges saying that Telstra is paying out millions to their outgoing CEO Sol Trujillo but that they are doing no favours to their loyal customers.

David Luff spokesman for Telstra initially stated that all providers charged to one-tenth of a cent and that it was linked to the GST. Optus has said that they do not, except for single SMS and MMS charges.

Mr. Luff later stated that many of Telstra's charges were charged in part cents and many usage-based services such as internet browsing are charged in part cents. By displaying charges to three decimal places it will assist customers in understanding how they round the bill to reach the total amount due.

Another point to note is that 'Total Due' is rounded to two decimal points.

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Published on March 3-th, 2009 in Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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