Telstra, Australia's largest telecommunications provider, is set to raise mobile phone plan prices by up to 4% within six weeks, marking a departure from its previous annual adjustments tied to the consumer price index. 

This move, announced amid a backdrop of cost-of-living pressures and economic uncertainty, will affect both post-paid and pre-paid customers, with pre-paid accounts seeing hikes in October. 

Telstra CEO Vicki Brady revealed in May that the decision to decouple pricing from CPI was aimed at sustaining investments in network reliability and expansion. However, specifics on how the new price increments were determined remain undisclosed, leaving customers and analysts questioning the rationale behind the increases. 

The price hikes coincide with Telstra's plan to lay off 2,800 employees, constituting 9% of its workforce, as part of a cost-cutting initiative expected to save approximately $360 million. 

Brady emphasised the necessity of these measures despite posting a $2 billion profit in the last financial year, projecting robust EBITDA figures for 2024 and 2025. "The measures announced today are difficult, but they are necessary," Brady reiterated, underscoring Telstra's commitment to sustaining profitability amid evolving market dynamics. 

The layoffs are set to commence in the coming weeks, impacting various operational sectors within the company. In response to consumer concerns, Telstra justified the price increases on its website, asserting that the additional revenue will support ongoing investments in network performance, reliability, and security. 

The company cited a 3.5-fold increase in network traffic since 2019, driven by heightened data consumption accelerated by pandemic-driven digital shifts. 

"Upgrades to our 4G infrastructure, coupled with expanding 5G coverage to 89% of Australia, reflect our commitment to meeting growing connectivity demands," a Telstra spokesperson elaborated. 

The infrastructure enhancements are likened to expanding a highway to accommodate increased traffic, ensuring continued service quality amidst surging data usage. 

As Australians grapple with rising living costs, Telstra's pricing adjustments signal broader implications for consumer spending and telecommunications affordability. The company's strategic maneuvers underscore its efforts to balance operational efficiency with customer expectations in an increasingly competitive market landscape.