A Case Study on Telstra’s Price Changes and Customer Trust 📶

Raising prices is one of the toughest decisions a business can make. The fear of upsetting loyal customers often leads to hesitation. But earlier this year, Telstra price changes made headlines as the company raised prices, reshaped its plans, and defended its regional premiums—all while facing public scrutiny and rising competition. Surprisingly, it came out with stronger profits and renewed investor confidence.

What looked risky was actually a deliberate, interconnected strategy. Every pricing decision supported broader goals—funding infrastructure, influencing customer behaviour, and reinforcing brand value. For businesses watching from the sidelines, this isn’t just about telcos. It’s a real-world lesson in using pricing to grow strategically.

>Download Now: Free PDF How to Build Hiring Capability to Get The Best Pricing Team

Telstra Price Changes Signal a Shift from CPI-Driven Pricing

Telstra made headlines by ending its CPI-linked pricing model. This meant it could raise prices without tying them to inflation, giving it full control over when and how Telstra price changes were implemented.

This move created flexibility. It allowed the company to adjust pricing based on internal needs, like funding upgrades. But it also risked alienating customers who expected price stability. For Telstra, the trade-off was worth it: being able to adjust pricing in line with business goals outweighed the risk of backlash, especially if Telstra’s price increase plans were framed as delivering long-term value.

This control became the foundation for the next step: maintaining a consistent pricing model while adjusting the levels.

Telstra’s Business Pricing Strategy Sticks with Subscriptions

As new entrants like Mobile X explored usage-based models, Telstra stuck with its flat-rate subscription plans. It wasn’t avoiding innovation—it was prioritising predictability.

Usage-based pricing may offer flexibility, but it can also confuse customers and complicate billing. Telstra needed stability as it rolled out its price changes. Keeping a familiar model helped customers understand what they were paying for and made it easier for the company to manage Telstra’s price increase plans with minimal friction.

This simplicity helped reinforce customer trust, essential when guiding them into new plan structures.

The Role of Bundling and Tiering in Shaping Perceived Value

Rather than lifting all prices equally, Telstra restructured its plans. Entry-level products became more expensive, while premium options stayed the same or dropped slightly, like the NBN 1000 plan, which fell by $11.

These Telstra price changes weren’t just about revenue. They reflected a deliberate Telstra business strategy to shift how customers viewed value. Higher-tier plans appeared to offer better deals, subtly nudging customers toward them. By creating clearer distinctions between tiers, Telstra positioned the upgrades as worthwhile, rather than just more expensive.

This kind of price framing helps businesses introduce increases without triggering resistance—if the value feels real.

How Telstra’s Pricing Strategy Shapes Its Price Increase Plan

To justify Telstra price changes, the company emphasised its $800 million in infrastructure spending, including rural expansion, 5G rollout, and satellite mobile services. It wasn’t just about charging more—it was about showing customers what that money funded.

This approach turned cost into commitment. By framing Telstra’s price increase plan as necessary for better coverage and innovation, Telstra aimed to win trust, even from those paying more. But it also set a high bar: if customers didn’t experience improvements, the justification would fall flat.

For any business, promising value through investment only works if that value is visible and meaningful to customers.

How Telstra Plans to Manage Margins and Price Rises While Retaining Trust

Despite criticism—including claims of a “bush tax”—Telstra saw a 7.1% rise in net profit and 3.1% mobile revenue growth. Analysts upgraded its stock, recognising Telstra price changes as a sustainable direction.

The key was balance. Telstra protected its margins without triggering major customer loss. Its messaging, tiering, and Telstra plan price increase narrative helped maintain confidence, even as prices climbed.

But this wasn’t just a win by numbers. Many customers stayed because of limited alternatives, not because they felt the pricing was fair. For most businesses, loyalty must be earned through perceived value, not market dominance.

Standing Out in a Crowded Market While Justifying the Premium

Instead of competing on price, Telstra leaned on its strengths: national coverage, rural reach, and reliability. It used these as reasons for charging more than rivals like Optus and TPG—a core part of recent Telstra price changes.

This Telstra pricing strategy worked—if customers saw and believed in the difference. The risk is always the same: if the promised service doesn’t match the price, customers feel shortchanged.

For businesses offering premium pricing, the experience must deliver. Differentiation must be real, not just claimed, or the price won’t hold.

What Businesses Can Learn from Telstra’s Price Changes

Their strategy shows how Telstra’s price changes can support broader business goals when everything works in sync. Freeing pricing from inflation gave it control. Stable subscription models maintained trust. Tiered plans shaped choices. Investments backed up price hikes. And differentiation justified the premium.

But Telstra’s pricing strategy also shows the risks of pushing price without strong value alignment. Many customers felt priced out, especially in underserved areas. Smaller businesses can’t afford that. They must ensure every dollar charged reflects what the customer sees, feels, and believes.

The better model? Customer-centric pricing—where the price reflects not just cost or margin, but how much value the customer receives.

〉〉〉 Get Your FREE Pricing Audit  〉〉〉

Use Pricing as a Signal, Not a Shortcut

Pricing is more than revenue. It’s how you communicate worth. It’s how you build trust. If you price with clarity, intent, and customer value at the centre, you don’t just earn more—you earn it better.

If you’re thinking about your own pricing strategy and wondering how to make it more customer-focused, now’s a good time to start. The price changes of Telstra show what’s possible—but also what to watch out for. Every business has different challenges, but the goal is the same: to charge in a way that feels fair, clear, and valuable.

If you’d like to discuss your options or explore a few ideas, we’re here to help. Let’s make your pricing work better for your customers and your business.

For a comprehensive view of integrating a high-performing pricing team in your company, Download a complimentary whitepaper on How to Build Hiring Capability to Get The Best Pricing Team.

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

Make your pricing world-class!