Telecommunications powerhouse Telstra is prepping for its launch into the energy retail market which could see it challenge major providers like AGL and Origin as it awaits approval by the regulators.
In its detailed submission to the Australian Energy Regulator (AER), ‘Telstra Energy’ will operate under the Telstra brand, giving it access to its huge telco customer base of around 13 million accounts.
Known as the country’s largest internet and mobile phone plan provider, a retail license from the AER will allow Telstra to sell electricity and natural gas to customers in New South Wales, Queensland, South Australia and the ACT, with the telco giant also lodging applications to operate in Victoria.
A Telstra spokesperson said: “Telstra is seeking to move into the residential energy sector. However, launch timings are not yet confirmed as there are many components to consider, including obtaining licenses to operate as an energy retailer.
“Telstra is already a significant participant in the energy market and we generate enough renewable energy to power 100,000 homes. We also use our standby power assets to improve grid stability – for example, during recent blackouts in Queensland we kept the lights on for about 50,000 families.”
It’s a move that’s surely going to attract a lot of attention from the competition as well as consumers said Canstar Blue’s Energy Editor, Jared Mullane.
“There’s no doubt that a Telstra-branded energy provider will send shockwaves across the industry, and given its monopoly in the telco space, it wouldn’t be surprising if many of its existing customers consider moving to the brand for their electricity and gas,” he said.
Aside from it set to be a multi-utility provider, Telstra’s point of difference for prospective customers could be its green energy initiatives as well as providing quality service to Australians.
“Telstra has made a strong commitment to its transition to renewable energy in its own business, and has established multiple partnerships through power purchase agreements with the Murra Murra Wind Farm in Victoria, the Emerald Solar Park in Queensland, and a new deal with the Global Power Generation Crookwell 3 Wind Farm in New South Wales,” Mr Mullane added.
“A potential focus on cleaner energy and carbon neutral products could give Telstra an edge, particularly as many power companies – including the bigger players like AGL and Origin – move in this direction. Green energy credentials aside, Telstra will need to ensure its call centres are well-equipped to handle an influx of new customers, particularly as many Aussies will expect a higher level of customer service from the brand – an area it doesn’t have a great track record in.”
It comes after several activist groups led by the Consumer Action Law Centre submitted their two cents on Telstra’s energy application to the Essential Services Commission (ESC) in Victoria. Part of the advocacy groups shared concern in their submission included Telstra’s recent dealings with First Nations customers, which saw the company slapped with $50 million in fines.
Telstra formally submitted its applications to the AER and the ESC on 20 May 2021, with submissions from industry stakeholders closing on 1 July 2021, meaning an official launch date should be imminent.
Compare Electricity Prices
While it’s too early to tell how Telstra Energy will stack up against the competition, we’ve listed a bunch of plans from other providers currently in market. Click on your state to see relevant pricing below or use our free comparison tool for specific quotes in your area.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Will any battle lines be drawn between bundled utility providers?
A looming Telstra Energy launch is big news for competition, especially as an ever-growing list of retailers like AGL, Dodo and Kogan now offer bundled utilities. One of the original energy providers to cross-sell internet with electricity and gas is Origin, an industry juggernaut that weighed in on this expanding market to Canstar Blue.
General Manager – Retail Sales and Marketing at Origin, Duncan Permezel said:
“A healthy, competitive energy market helps drive greater innovation, more choice and better outcomes for customers. We have decades of experience in energy retailing, with millions of Australian homes trusting us to supply their energy needs, and we continue to innovate to provide customers with smarter, cleaner energy solutions and leading customer service.
“In addition to providing a range of energy solutions including electricity, natural gas, solar, home batteries and LPG – we also provide customers with the convenience of being able to bundle their broadband and save.”
Telstra Energy will be headed by former CEO of Powershop, Ben Burge, who is stated to have extensive market experience, according to Telstra’s retailer application to the AER.
In its application, Telstra said: “The team is led by Ben Burge who has had previous experience in establishing and leading innovative customer facing and energy related businesses including Meridian Energy Australia (and its retail arm Powershop Australia). The team has significant established experience across a range of energy retail, network and generation businesses and market bodies including: AGL, Origin Energy, EnergyAustralia, Ergon Energy, Energex, United Energy, Meridian Energy Australia, Powershop Australia, AEMO and AEMC.”
What will Telstra’s move into energy mean for consumers?
Merging telco with energy was pioneered a few years ago and is nothing new for consumers looking to consolidate their home services, however there’s never been a business venture of Telstra’s scale like this before explained Canstar Blue’s Telco Editor, Tara Donnelly.
“While Telstra isn’t the first telco to make moves into the energy space, it’s by far the biggest name, with the biggest market share in both mobile and internet,” she said. “There are around 8.5 million Telstra postpaid plans in operation across the country, as well as over 3.4 million consumer and small business NBN connections – meaning the telco already has a massive customer base that could be swayed by the convenience of bundling phone, internet and energy.
“Whether this move will actually be positive for Australian consumers will depend on what discounts, deals and perks Telstra can offer customers looking to bundle their home services. Telstra’s mobile and broadband plans are far from the cheapest on the market, but many customers feel that the expansive mobile network coverage, NBN plan speeds, and included extras make the premium prices worth paying.
“As a ‘full service’ telecommunications company, Telstra already offers customers the choice of bundling home internet, mobile phone payment, mobile service and entertainment such as Netflix, Foxtel, Xbox and Kayo on a single monthly bill. It’s likely many existing Telstra subscribers will be intrigued at the prospect of adding gas and electricity to that list, but whether Telstra Energy will offer serious value will ultimately rest on what those customers can actually save by making the provider a one-stop utilities shop.”
Which providers currently offer bundled energy and internet plans?
While many retailers offer both electricity and gas, there are a few that also provide internet plans. Keep in mind some of the providers below may only sell an internet plan if a customer signs up to either electricity or gas. Here are the companies currently selling energy and NBN plans in Australia:
Image credit: Javier Catano Gonzalez/Shutterstock.com
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