Telstra yet to float iPhone data cap idea past customers

Bill shock leads to bad debt.

Telstra won't enact a proposal to cut off smartphone users' internet access before they run up huge mobile data bills without first floating the idea past its customer base.

A report by News.com.au said Telstra would apply the cap to about 1.6 million iPhone and BlackBerry users on its network, barring them from accessing the web if they exceeded their quota limits and overspent.

The measure was said to be in response to $90 million in bad debts incurred by Telstra when customers had bill shock and didn't end up paying.

A Telstra spokesman told iTnews that the capping option was "something... we may look to introduce in the future once we've consulted with our customers.

"It's early days - we're looking at a range of options that give people better certainty and control over what they spend on phone services," the spokesman said.

"As smartphone's become more popular, customers are learning what services are available, and we are learning how best to help them manage their usage and spend."

It was unclear from statistics discussed at Telstra's full year results yesterday just how many smartphone customers were reneging on paying the larger-than-expected bills.

However, it appeared only a small number could potentially be affected by a cap decision with the average iPhone user failing to get near their quota limit, according to Telstra chief executive David Thodey.

"In terms of wireless data usage, interestingly, the average use on an iPhone is around 200 to 400 megabytes per month, nowhere near what people are actually acquiring on their cap," Thodey said.

Data use, however, now dominated Telstra's Next G network, he said.

"When you look at the wireless network... less than 10 percent [of traffic] now is voice, 90 percent is all IP packets of data.

"So that is where the growth is, and if you are profiling any network, it is definitely around the data."

Bad debts caused by bill shock contributed to a worse-than-expected results announcement by Telstra.

Shareholders saw Telstra's stock value slide almost 10 percent in the hours following the financial announcement.