Telstra is slowly moving 850,000 households and businesses from 25Mbps plans to 50Mbps plans, after nbn discounted wholesale prices in December 2017 amid spiralling concerns about broadband speeds.

The network hoped telcos would pass on the savings to customers and encourage Australians to choose higher speed plans.

The Sydney Morning Herald reports that the first telco to make the move was TPG Telecom, which scrapped its 25Mbps plan and dropped the cost for 50Mbps. It did the same for its brands iiNet and Internode.

A major problem for nbn has been a slower than expected take-up of its higher speed tier plans by customers as they get connected.

Data from 2017 shows 80 per cent of consumers had the slower 25Mbps plans or lower.

Before the price discounts, nbn’s own data showed fewer than five per cent of customers were choosing higher speed 50Mbps plans. By early January 2018, this had risen to about 30 per cent of new connections.

Telstra will now move about 850,000 to 900,000 customers to a faster tiers for free, Telstra head of fixed products, Jana Kotatko, said.

nbn has 440,000 services on 50Mbps plans and by June 2018 it expects to have 1.1 million.

About 10 to 15 per cent of Telstra’s customers choose the fastest speed tier, 100Mbps. Both this fastest speed tier and the slowest, 12Mbps, will be available.

“With increased speeds, our customers will have the freedom to stream in 4K or HD on multiple devices without buffering or interruptions,” Ms Kotatko said.

All new and re-contracting customers will get a ‘smart modem’ with a 4G sim built in. This allows customers to use the internet through mobile if there’s a line outage or connection delay.

There could be a case for a combined NBN and 5G modem in the future, she said.

“We absolutely can see that some customers have had a bumpy ride on the NBN,” Ms Kotatko said.

“The technology is not indestructible, and you’ve got to hope for the best, but plan for the worst in the event the service is disrupted.”

Customers who are unable to get more than 25Mbps will see their plans upgraded at no additional cost, but will not have any speed benefit.

Ms Kotatko said the “vast majority” would be able to achieve the 50Mbps speed.

She said homes with fibre to the node (FTTN) technology, where existing copper and internet networks are used as part of the connection, could be “limited by physics” and their distance from the connection point.

“That is an NBN limitation,” she said.

In details provided to the Senate, nbn admitted half of FTTN customers were not getting more than 60Mbps.

This includes factors beyond its control, including the wiring in homes and the quality of modems.

An nbn spokeswoman said the figure was expected to “improve over time” after ongoing remediation work on the copper network and the end of ‘co-existence’ with the legacy networks that causes interference.

All households and businesses will have 25Mbps minimum for FTTN, with 90 per cent of all connections to have a minimum of 50Mbps.

Shadow communications minister, Michelle Rowland, described the result as “second-rate” saying Australians “recognise the importance of technology that is fit for the future”.

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