Hi all, just thought I would update on my original post. After a number of wasted hours and phone calls and complications, we resorted to doing nothing. We were keeping on using our TBOX and paying the new cheap rate although we had cancelled the Foxtel part of our new bundle because we didn't want the satellite.
Lacking any more energy or enthusiasm to pursue this further we continued this way until we eventually received a phone call from Telstra. My husband explained everything again and bizarrely we were told that actually, we could have our old bundle back despite what I was previously told.
Anyway, we have opted not to do that and are going ahead with the satellite for various reasons.
An interesting exercise in the end about how inefficient and hopeless the entire saga was despite having come across one or two really helpful customer service people. It seems that a lot depends on the randomness of who you talk to. Our first person should have done a better job when we were trying to change in the first place and all could have been avoided. Then perfectly reasonable customer service operators were stymied by their own organisation, wait times, difficulty in transferring to the right people etc. People didn't phone us back when they said they definitely would and so on.
I think Telstra needs to have a long hard look at their processes. They have kept us as customers for the time being but only because we are too busy to continue looking into things. Next time we need to change services, we will have no qualms in changing service providers.
Thanks to all who contributed information here.