For postpaid customers, the changes will take effect in August, and for prepaid customers they will apply from October.

Realistically, Telstra was going to reset prices this year, so customers would have had to wait until that happened.

However, the previous pricing policy, which linked all price changes to inflation, was a particularly blunt marketing instrument.

The newfound price flexibility makes sense: some plans, like the lowest prepaid starter, can stay the same, while many customer plans increase by 4 to 5 percent. Some long-term plans are the hardest hit, with increases of up to 12 percent.

For comparison, inflation was about 4 percent last year.

Customers should also be aware that inflation will impact Telstra’s own cost base, so this attempt to generate revenue is sensible enough.

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This follows Telstra CEO Vicki Brady announcing a 10 percent workforce reduction as she seeks to cut costs to meet previous profit expectations for shareholders.

While the mobile division continues to perform well thanks to improved network coverage and a large number of fixed-line customers, other business units, such as the huge Enterprise division that provides communications and technology services to companies and governments, account for almost a third of the company’s group revenues.

The company has been trying to stem the tide of declining profits in the corporate sector for more than a year, as it becomes increasingly vulnerable to businesses switching to internet-based services from software companies instead of traditional voice calls.

This is the department where most of the layoffs will occur.

For Telstra shareholders who were unhappy with the 5.5 percent drop in their share price this year, the price announcement brought some relief.

Shares rose more than 3 percent in the early afternoon, easily outpacing the ASX 200, which rose 0.7 percent.

Telstra’s May announcement removed guidance for its 2025 financial year. Raising mobile phone plan prices is the tonic Telstra needs to deliver on its profit promises.

Brady really needs to get this directive right.

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