Telstra pays $1.5 million penalty for breaching customer rights

Telstra Corporation Ltd has paid an infringement notice of more than $1,500,000 after the Australian Communications and Media Authority (ACMA) found it failed to provide consumers with the opportunity to keep their existing local phone number when changing telcos, known as local number porting.

Telstra suspended most of its local number porting operations from late March 2020 after experiencing COVID-19-related impacts on its offshore operations.

As a result, more than 42,000 services could not be moved from Telstra to other telcos, or vice versa, as requested by Australian consumers.

The ACMA found that Telstra unilaterally cancelled transfer requests that were scheduled to occur and stopped accepting new requests. This was done without prior warning to other telcos, which were left not being able to help new and existing customers to transfer their service, while keeping their phone number.

Telstra did not fully resume porting operations until July 2020, and did not clear the backlog of requests until October 2020.

ACMA Chair Nerida O’Loughlin said Telstra’s actions had wide-reaching and lengthy impacts on residential and business consumers, as well as the broader telco industry.

“Australian consumers must have the freedom to change their telco provider to take up services that best suit their needs. This includes keeping your own phone number even if you take your business elsewhere,” Ms O’Loughlin said.

“Local number porting is important for consumers and supports a competitive telco sector.

“We appreciate Telstra had difficulties due to COVID-19 and we took this into account in our enforcement actions, including the size of the financial penalty.

“However, it is clear Telstra, for a sustained period, did not have sufficient plans in place to comply with an important consumer safeguard that promotes competition in the telco market.

“Telstra was on notice that the ACMA took these consumer and competition measures seriously and would not be exercising regulatory forbearance for non-compliance. Telco business continuity processes must be robust, particularly after the challenges of the past year.”

The ACMA also gave Telstra a formal direction to comply with the Local Number Portability Industry Code. Should Telstra fail to comply with the direction, it could face court-imposed penalties of $250,000 per contravention.

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