Telstra to kill bill shock by cutting off net hogs

TELSTRA'S 1.6 million iPhone and BlackBerry customers will have their internet access cut off if they overspend because the telco has had enough of customers refusing to pay.

The "app cap" would apply to all so-called smartphones on the Telstra network, barring users from the web until the following month.

"It stops the charge but it also stops the service," Telstra chief financial officer John Stanhope said yesterday.

He said, while Telstra "didn't want to intrude" into users' lives, it had been forced to act because it was losing tens of millions of dollars when customers failed to cough up.

"There is bill shock. People go, 'Wow, I didn't expect that size bill'," Mr Stanhope said.

But he also said Telstra was partly to blame because it wasn't doing a good enough job of explaining its plans and costs to new smartphone customers. He argued the app cap would benefit many customers by protecting them from big bills.
It was possible that customers would be able to set the cut-off limit themselves, he said.

And Telstra would also increase its efforts to "educate" users about plans.

Telstra expected to have the cap in place by the end of this financial year — by which time the telco was likely to have more than two million smartphone users because sign-ups were growing 30 per cent annually.

Rapidly rising revenue from mobile web access was one of the few bright spots in the annual financial result Telstra reported yesterday.