Telstra hit with record fine of AU$1.5 million over porting dispute

Summary

  • ACMA says that Telstra contravened laws on porting; slaps AU$1.5 million fine.
  • Telstra has blamed the COVID-19 pandemic for its porting woes.
  • ACMA believes 42,000 customers were hit because of hiccups in porting by Telstra.

Australian telecom major Telstra Corporation Limited (ASX:TLS) has been fined AU$1.5 million by the telecom and media regulator on allegations of failing to port its customers last year.

Porting is an exercise where a mobile phone user moves from one telco to another, without changing his/her number. It is a global practice now, with the option to choose allowed to the customer.

Telstra is said to have stopped enabling porting for almost four months last year till July, as COVID-19 lockdowns had severe “impacts on its offshore operations”.

According to Australian Communications and Media Authority (ACMA), Telstra had stopped about 42,000 customers from porting in or out of Telstra – a backlog that did not get cleared till October 2020.

“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,” said ACMA Chair Nerida O’Loughlin.

As a result, the ACMA has asked Telstra to pay a record fine of little over AU$ 1.5 million – the highest ever – within 28 days. This fine is 1.5 times the last record -- an AU$1 million fine slapped on retail Woolworth Group Limited (ASX:WOW) for breaching spam laws last July.

In an infringement notice to Telstra, the ACMA alleged that the contraventions to subsection 462(1) of Telecommunications Act 1997 took place between 7 April 2020 and 24 April 2020.

The ACMA fine impacted the shares of Telstra, which shed 29 basis points in the early morning trade on ASX. However, its rival TPG Telecom Limited (ASX:TPG) was on the wane too, with shares down by 275 basis points.


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