Telstra adds to Optus contract breakage offer with free feelings

As Australian telcos line up to lure customers on the back of the expected release of Apple's iPhone 6, Telstra is matching Optus' offer and raising a replacement handset after 12 months.

Customers looking to switch onto Telstra's network are set to receive AU$450 of credit if they have to pay contract breakage fees with another carrier, trade in an old handset, and sign a two-year contract that includes handset repayments with Telstra.

Australia's dominant carrier is also set to waive its usual AU$10 levy for its new phone feeling that allows customers to receive a new handset after serving out one year of their contract with the telco, provided the original handset is returned in "good working order". Users will need to be using an "eligible handset" on a handset repayment plan to have the levy waived.

The last in Telstra's trio of offers to lure customers is the option of a free gigabyte of data or AU$1,000 worth of calls and MMS for domestic use each month on Mobile Accelerate Plans, where customers sign up to pay AU$70 or more each month. This offer will begin on September 16.

"We know our customers really love getting their hands on the latest smartphone technology, and we want to give them the chance to get that new phone feeling more often," said John Chambers, executive director, Telstra Mobile, in a statement.

"We know customers want a great quality data experience — rather than simply more data. That's why we're investing around AU$1 billion dollars in our mobile network this financial year so we can continue to offer our customers the speed, reliability, and coverage they have come to expect from Telstra."

Telstra said existing customers who are in the last three months of their contracts can have their contract breakage fees waived, and are eligible for the handset trade-in offer.

The telco giant also said it would be rolling out 700Mhz 4G to customers in "selected areas" of Sydney and Adelaide later this month. Telstra said users with compatible devices — such as the Samsung Galaxy S5, HTC One M8, LG G3, HTC One mini 2, and HTC Desire 610 — would see the increased speed and and better in-building coverage of the 700Mhz band when it is switched on, as well as selling new 700Mhz devices in the approach to Christmas.

Australian telcos are lining up to lure the approximately 1.2 million Australia customers who are coming off their contract in the next four months, according to a GfK survey.

Optus fired the opening salvo over the weekend, when it offered AU$450 in credit to pay out customer plans and trade in phones. Its deal will see customers paid AU$200 credit for customers to pay out their early cancellation fees within 21 days of joining Optus, and up to AU$250 credit for customers trading in an old phone to put towards the purchase of a new phone.

By contrast, Telstra will serve up its AU$200 in credit once the customer stays with Telstra for two years.

Last month, Telstra revealed the extent of its stranglehold on the Australian market, when it revealed that it had 16 million mobile customers, adding 937,000 mobile customers over the past year, and posted an AU$4.7 billion profit for the 2013-14 financial year.

Telstra was recently accused by global peering company CloudFlare co-founder and CEO Matthew Prince of giving Australia one of the most expensive transit networks in the world .

"If Australians wonder why internet and many other services are more expensive in their country than anywhere else in the world, they need only look to Telstra. What's interesting is that Telstra maintains their high pricing even if only delivering traffic inside the country," Prince said.

In response, Telstra said CloudFlare's claims were "factually incorrect" and "far in excess of Telstra's actual charges".

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