TPG and Optus refunding customers after offering unachievable internet speeds

After failing to notify thousands of customers of the unachievable speeds on their internet plans, both Optus and TPG have now issued refunds of more than $4.4 million and $2.1 million respectively to affected subscribers.

When customers sign up to an NBN plan, the provider is required to notify the customer if the plan speed they choose is unattainable at their home because of incompatible NBN infrastructure. The rules set by the Australian Communications and Media Authority (ACMA) state that telcos must verify the maximum internet speeds, and inform customers if their home’s connection will be unable to achieve the speeds offered on their choice of NBN plan.

In July 2021, Optus self-reported that over a two-year period, more than 34,000 of its customers were not informed that their internet service was unable to achieve the speeds listed on the service they signed up to. Likewise, TPG notified the ACMA in October that it had also failed to inform over 4,400 customers of the unachievable speeds listed on their plan.

Optus and TPG directed to undergo independent audits

The ACMA issued Optus with remedial direction, while TPG offered a court-enforceable undertaking — which the ACMA accepted — for the breaches. Optus will now undergo an independent audit of its compliance systems, and implement effective systems to ensure compliance in the future. TPG is also to commission an independent audit of its compliance systems and implement effective systems for future compliance.

On these breaches, ACMA Chair Nerida O’Loughlin said that customers are entitled to move to a cheaper, lower-speed plan, or exit the contract at no cost, if a telco cannot deliver advertised speeds.

“The scale of service failure by these companies is significant. Our actions will ensure the top three telcos are more vigilant delivering the internet service their customers expect and have paid for,” said Ms O’Loughlin.

If Optus and TPG fail to meet the requirements, the ACMA can take further action and commence proceedings in the Federal Court.

In an official response provided to Canstar Blue, Andrew Sheridan, VP Regulatory & Public Affairs at Optus said, “As the ACMA has recognised, Optus self-identified this issue and has already contacted customers to offer remediation options. Given that Australia’s three largest telco providers have faced similar enforcement action it is legitimate to ask whether additional regulatory scrutiny of the underlying NBN service would have helped to better meet customers’ expectations.”

Canstar Blue has reached out to TPG for comment, but had not received a reply at the time of publishing.

This is not the first time telcos have been put on notice for similar breaches, after the Australian Competition and Consumer Commission (ACCC) initiated federal court proceedings in 2021 against Telstra, Optus and TPG for allegedly misleading customers over their NBN speeds.

What does it mean when telcos fail to deliver promised internet speeds?

It’s important to recognise that these instances of telcos not informing customers of unachievable speeds is not the same as customers having slow internet.

Canstar Blue’s Telco Editor, Tara Donnelly said, “The average speeds promised by telcos should be attainable if you’re on the correct NBN technology type, but if your real-world speed is falling seriously short, you may have a problem.”

When a home is connected to the NBN, one of several different technology types is used to connect that home to the network. These technology types — FTTC, FTTN, FTTB, FTTP, HFC, fixed wireless and Sky Muster satellite — differ from home to home depending on a range of factors such as the building itself (is it a free-standing house, apartment, etc), location and available technology in the area.

FTTP, known as Fibre to the Premises, is one of the fastest technology types, delivering services directly to the home. In the case of the NBN’s fast speeds — NBN 100, NBN 250 and NBN 1000 — these speeds are typically only available to households with a FTTP connection, and sometimes to homes with an HFC connection.

Telcos will typically list which connection types are compatible with NBN plans. Some providers might also require you to do an address check before signing up, which can sometimes filter out plans which are not available at your home.

In some cases, you may sign up to a faster speed tier, such as NBN 100, then discover that your home’s technology type is not able to deliver those expected speeds. When this occurs, telcos are required to inform a customer, and move them to a plan that their technology type is capable of achieving. Considering that faster NBN plans are more expensive, customers can end up paying more for a plan that they will never get the most out of.

This is why it’s important to know what your NBN technology type is, along with what NBN speeds you can achieve on that technology. However, NBN providers still have a responsibility to ensure that your home can access the speeds promised on a plan once you’ve signed up.

My internet is slow — does that mean I’m on the wrong NBN speed plan?

Your internet can be slow for a number of reasons, but it’s also important to realise the differences between slow speeds and being signed to a plan incompatible with your NBN connection technology type.

If you’ve done an internet speed test (you can use the Canstar Blue speed test tool to take a test now) and noticed that the speeds are slower than what should be available on your plan, you’ll need to take a few things into consideration.

For example, if you’ve signed up to an NBN 50 plan, do a speed test, and find that your speeds are somewhere between 30Mbps and 49Mbps, these speeds are still faster than the next-lowest speed tier, NBN 25. This means that you may be experiencing congestion on the network or in the home, you could have an outdated or damaged modem, or you’re using the internet during the peak evening time (and in that case, those might be the typical evening speeds listed by your provider).

However, if you’ve signed up to an NBN 100 plan and consistently experience those 30Mbps to 49Mbps speeds, you should get in touch with your provider to find out what the problem is.

Test your internet speeds

If slow internet speeds concern you, it’s important to take internet speed tests frequently and under different conditions. “Performing a free, easy NBN speed test regularly — and comparing your results with the speeds cited by your NBN provider — is one of the quickest and simplest ways of ensuring you’re getting the performance you signed up for,” said Ms Donnelly.

When testing your internet speeds, check throughout the day and night, in situations where only one person is online and when all members of your household are using it (when more devices are connected). This way, you can have a clearer idea as to if your speeds are consistently slow, or if it’s only occurring during peak usage times and with multiple users.

You can then get in touch with your provider to discuss what the issues are and see if something can be done to fix your slow speeds. If you’re still unhappy, it might be time to switch to a different NBN plan and provider.

An example of being on the wrong speed tier is if you’ve signed up to a slower NBN speed — such as NBN 12 or NBN 25 — but want to use your home internet for activities such as HD video streaming and online gaming, or you have more than two people in your household using the internet. It’s possible that the NBN speed you have is too slow for your home internet needs, and you might need to switch to a plan on a faster speed tier.

Compare NBN plans

If you’re unhappy with your current NBN plan or provider, the below table compares a range of plans and providers across the four main NBN speed tiers — NBN 12, NBN 25, NBN 50 and NBN 100. Switch between the tabs to look at the different speed tiers.