Can Telstra compete now that Optus, iiNet and others have got naked?

The latest announcements by Optus to run a naked DSL service at ADSL2+ speeds, which will mean that customers no longer need to pay for an added PSTN telephone line rental charge when they take out a broadband DSL plan, will make competition in the Australian broadband and voice market a lot hotter.

Further pressure will now be put on Telstra’s PSTN business as the number three Australian ISP, iiNet and a host of smaller service providers will now be joined by Australia’s second largest broadband, Optus in offering naked DSL plans.

The substantial PSTN voice business that is owned by Optus is what makes it different from the other naked DSL provider’s iiNet, Exetel, GoTalk and Internode. For this reason Optus has bundled its mobile phone service with its naked DSL offering whereas the others compete directly with PSTN by offering bundled VoIP services.

With an increasing number of consumers only opting for mobile phones for voice and not bothering to use fixed line telephone service this move make a lot of sense for Optus because it allows the company to go after these users. The offering of an inexpensive VoIP service that can compete with the more costly PSTN service it offers has now become a viable option for Optus.

All the plans offered by Optus are bundled with a post-paid mobile phone service on a 24 month contract and these plans come in three sizes beginning with a 7GB download limit for $50, 15GB for $60 and for 30GB it will cost $100, all of which include free modem and setup.

It will cost users $248 for the modem and setup, plus an extra $10 per month for the naked DSL service if the mobile phone service is excluded from the package.

Other providers like iiNet or Gotalk, which offer the added benefit of competitively priced VoIP service may be better value for any users who don’t intend to subscribe to the mobile services from Optus.