Is telecommunications a shonky business?

Is telecommunications a shonky business?

Summary: Last year the telecommunications industry set new records. Record complaints to the TIO. Record complaints from the ACCC. Why are telecommunications companies getting it wrong?

TOPICS: Telcos

Last year the telecommunications industry set new records. Record complaints to the Telecommunications Industry Ombudsman. Record complaints from the Australian Competition and Consumer Commission. Why are telecommunications companies getting it wrong?

These days it might be best not to admit publicly that you are employed in the sector. If you're at a barbecue over the summer, tell everyone you work for one of the big four banks. You'll be more socially acceptable.

So why are telecommunications companies getting it so wrong? I suspect it's a combination of poor processes and a misunderstanding within the industry of what is the "norm" that is acceptable to customers. Are senior managers actually seeing things from the customer's point of view? Or is it another symptom of a skewed industry where one company controls the vast proportion of the profit?

Telcos have an annoying habit of making things more complicated than they need to be, sometimes driven by the limitations of technology, but largely because of pricing and marketing specialists who don't have the mental agility to develop plans that are easy to understand.

In this edition I call on previous interviews on Twisted Wire and BTalk (on to illustrate just how out of touch the industry is with the real world. Do you agree? Add your comments in the Talkback section below.

If you want to hear more listen to these pieces on Twisted Wire and on our sister site

Topic: Telcos


Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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  • What Crap

    Are we getting it wrong? Or is the TIO spending a huge amount on TV ads. Letting customers out of contracts they clearly signed up for.

    Working in the industry my belief is the TIO is nothing short of extortion
  • As a consumer...

    ... your industry:

    * has no idea about customer service
    * appears to deliberately establish practices and terms and conditions which are impossible to decipher for the average person
    * relies heavily on contract law to beat consumers into submission
    * uses contracts yet allows no negotiation of said contracts for what has become (effectively) essential services, making it a take it or leave it proposition
    * provides goods and services with a fixed life that provides benefit only to the business and does the consumer over
    * engages in practices that are either deliberately deceptive or at the least lack transparency
    * appear to promise the world, but actually promise and deliver nothing ("speeds up to', or 'unlimited' anyone?)
    * hides behind technobabble and excuses
    * palms off accountabiltiy to someone else consitently - as often as not to the consumer
    * charges for a premium service that it can't provide

    ..... and that's from someone who knows exactly what they're signing up for before handing over a cent... so what's the opinion of the rest of the mug punters.

    Seriously, you guys need to have a good look at yourselves before consumers start to wise up.

    Forget that, it'll never happen (oh you did already)!
  • Confusing much?

    It's true that people will complain more when they find someone who will listen, but IMO the fault lies squarely with the industry.

    Most companies offer a bewildering array of plans with complex fee structures, quotas, freebies and bonus options. The amount of fine print, conditions and qualified statements in the advertisements and contracts is almost absurd. Only a lawyer could truly understand what they all mean, and the average consumer has no hope.

    Secondly, the industry is totally addicted to 24-month contract terms, in a field where flexibility is becoming increasingly important.

    Thirdly, customer support from many big firms is virtually useless to the customer, unless they have a few hours to spare while waiting on hold - which creates a vicious cycle when there's so many complaints.

    Finally, many companies impose artificial limitations on their products and services in order to squeeze the customer for more money, and attempt to hide it through technobabble excuses. For instance, why does tethering attract a surcharge, while using the same data on your mobile phone is ok? That kind of hypocritical grab for cash is why people no longer trust such companies.
  • Idiots running the show

    You have marketing who has no technical knowledge at all designing technology-based offerings, sales who lie through their teeth for commissions, and management that only care about their bonuses and shareholder returns.

    Customer service and reliability are at the bottom of the list of important things.

    All of the people directly responsible for the products that customers receive are proud of their complete lack of understand of the technologies they are abusing. The whole industry is a joke, run by money grabbing idiots, and it is a wonder that things don't cock up more often.

    It is always the support staff who cop shit form customers when things inevitably break, who can't fix things because of bad company policies and management, and who get the lowest pay.

    Then just add the 100 pound gorilla Telstra making things a million times harder for everyone.
  • Disagree

    I think it's mostly the consumer having absolutely no clue about how the internet works, and the moment something goes wrong they always blame the ISP even thou 99% of the time the problem lies with the consumer.

    The TIO is a joke, even if the problem is with the customer the ISP gets charged every for every complaint that is filed, The consumer should get charged if they complain and it's not the ISP's fault!
  • Rightyo

    The industry sells the internet in a way that suggests its a utiltiy level service, and that computers are simply clever, highly user freindly appliances, and then you blame the consumer?

    Wow! I'm sure any business you'd run would operate really effectively so long as there were no customers. Sorry I forgot the industry exists for its own convenience.

    Its that exact attitude that requires consumer advocacy. If the industry was as good as it sells itself to be, there'd be no need for a TIO.

    If (as an industry) you want to flog it as though you don't need a comp sci degree (or any degree), to make it work any time, all the time, everytime then don't be surprised when unfullfilled 'promises' result in complaints.

    Certainly some consumers probaly shouldn't be let near the a PC let alone the internet, but ask yourself, who sold them the dream.

    If consumers did have a clue about how it all worked there'd be a revolt about the insane pricing, the QoS, the network management techniques, the locking up of content and its association with "ISPs", etctera, etcetera, etcetera......

    Be very careful what you wish for!
  • ...

    with no personal attack, you just make a point that i dont agree with.

    When you say 'who sold them the dream', could you imagine a customer asking for an telecommunications service, to be told by the consultant that they dont have the mental capacity to purchase the service? as a consultant for a telco you can be the nicest guy in the world (yes, we do exist - the 2% of us), you can explain how the technology works, open their eyes to the expected and realistic speeds/coverage/costs, yet you will always getting them coming back complaining that you screwed them, all because they didnt listen or could not understand - however at the time of sale they were keen and were saying they were understanding the points i was making!

    sure, it could be miscommunication, but how is the sales person supposed to then analyse this person and then say "sorry, you dont have the mental capacity for this service".

    on that note, i agree - commissions and shifty sales people, KPI focused managers and insanely hard to understand pricing structures dont make it easy.
  • Telecomms isnt shonky

    Customers just expect too much, and have unrealistic expectations. Work for a telco (as I have for the past 6 years) and you'll see it all, pretty quickly too.

    Its kind of funny really, no one gets more irate than a customer whos Internet has been offline for a day or two, yet they'll happily accept that their car has broken down, or the hot water heater is broken, or an appliance has died.

    Telecomms brings out some funny emotions and reactions from people...
  • As a propvider

    I'm sorry but as someone who has worked in the industry, the margins on most of the consumer ADSL connections very tight.

    To put it bluntly;

    If you don't want a 24 month contract, pay the connection fee and don't take the free modem. Your new ISP will have to pay Telstra to connect the ADSL to the line, or churn you over from you old ISP, and the modem isn't actually free.

    If your running a business that will come to a grinding halt the moment the internet goes down, maybe the $40 connection isn't for you, and maybe just maybe you need a backup plan for when it does fall over.

    You signed up with us because we offered the lowest cost plan on the market, we are a business which means that we aim to make a profit at the end of the year, you probably shouldn't be expecting the same level of service as our higher priced competitors. You don't expect McDonald's to set the table for you or take your coat, but you can expect a cheep meal.

    We are selling you an internet service not tech-support for every gadget that happens to connect to the internet, you don't expect your gas provider to fix you stove, or help you install your hot water heater, why should you expect your ISP to clear the spy-ware from your computer or help you update your web page. There are people out there that can help you do this but unfortunately you will need to pay, just like you have to pay a mechanic when can't fix your own car.

    The trend of the Australian broadband market towards lower and lower priced ADSL plans, and the fact the ISP's are lowering their prices service levels in order to stay competitive rather than bucking the trend, shows that the majority of consumers just aren't prepared to pay for a premium service. As if they were more companies would be out there providing it.

    At the end of the day your ISP has to make a buck just like any other business, and just like any other business you get what you pay for.
  • shonky by the minute

    The Oz telco industry is so awash with 457 "professionals" no wonder its going downhill, a bunch of fakes the lot of them.
  • blame the customer!

    Ignorance is the corner stone of Australian retail telecoms. Contracts are specifically designed to deceive, to make the service offering sound more attractive. Tags such as "$200 free calls each month" are deceitful as they rely on complex tariff calculations. Same for credits that expire - imagine if someone turned up to claim the unused fuel in your car at the end of each month! There are so many players relying on the general ignorance of customers to increase monthly revenue that it is little wander that the TIO is being swamped.

    Time for retailers to start offering clearly defined products and clearly defined SLA's. If an operator cannot afford to provide an honest service then they should not be in business. Customers should be at the centre of every decision an ISP makes otherwise they are simply another guerrilla operator out for a short term gouge. Time for general education of the public for what is now a utility service. But don’t expect consumers to ever understand the technology, after all, how many people understand how their TV works? How many understand how a bank works?
  • Revamp

    Oz telco industry needs a serious revamp , no wonder Sol clearly stated working in Oz was like going back in time.

    The companies out there with no strategy or working policies to both drive the organisation and cater for there biggest assets (customers) is almost 90 %.
  • umm

    we went back in time, *because of sol*!
  • Re: Telecomms isnt shonky

    I'm not paying $100/mth for someone to maintain my car or HWS as I am for internet & line rental.
    But I do get rather irate when I spot a telstra service van parked anywhere between the local exchange & my residence Then regularly to arrive home to discover my connection either gone or switched over with either the local panel beater or a neighbour's number.
    Then when I attempt to get things fixed there's constant buck passing as to who's responsible if I can even connect to someone inside an hour with an intelligible accent.
    Followed up by weeks without any internet or phone service & you consider my expectations unrealistic?
  • SLA = $$$

    There are business grade products out there with defined SLA's, and if you want to spend $400 a month for one you are more than welcome too.

    Most house hold connections are residential grade with a 'best effort' connection (because if it's down a few days you are hardly going to lose thousands of dollars right?), which is why your plan is substantially cheaper.
  • TIO = fail

    Some customers are just idiots, I recall when working for an ISP a customer downloaded an upgrade patch for a game from an clearly unofficial quota-free download page of the companies website, then went to the TIO saying they were promised a free game! The TIO made the ISP pay the customer the cost of the game -_-

    Having worked closely in the past with ISP staff who dealt with the ISP side of TIO complaints, It's stupid customers like this that are the majority of TIO cases.
  • .

    > "speeds up to', or 'unlimited' anyone?

    The only people left to use 'unlimited' are telstra, no argument there that they are dodgy.

    Speeds up to 24 megabit is a correct term though, because it's based on the length/quality of your cabling from the telephone exchange, which most ISP's clearly make you aware of.

    >uses contracts yet allows no negotiation of said contracts for what has become (effectively) essential services, making it a take it or leave it proposition

    err yes? what's wrong with that? ISP profit margins are already fairly low due to high wholesale costs, did you want to barter with them for half price or something? o_O
  • Sure...

    ... but which ISP/telco makes that clear in consise clear language for (average) consumers?

    Can't think of one myself.

    McDonalds is a terrible analogy. It's very clear what it is you're getting for you money. And once purchased its yours to consume as you see fit, and it will be as promised everytime, no matter which franchise you use and how far it is from it essential 'ingredients' (exchanges??).

    Again show me an ISP/Telco that is that transparent and with the capabilty to deliver each and every time - for a non-technical consumer?

    Yes the business is damned hard, but not because of some inate expectation of consumers, because of the expectations generated by the marketing and product dev depts, and senior management of said orgs.

    From an expectation setting and management perspective there's a long way to go - and matching the marketing rhetoric with delivery would be a starting point.

    Any business that doesn't understand that its relationship with consumers is the start, and end, of the business will, eventually fail. Unless, of course, its business model is based on a one-shot interaction that generates sufficient revenue to obviate the need for a genuine connection with the consumers needs/desires, and it has an inexhaustible supply of consumers.

    Perhaps market rationalisation is over due?
  • The relevance...

    ... of your comment to the original post is?
  • Its incredibly unfortunate...

    that every single 'industry' response here is defensive, and (yet again) putting the onus on the consumer to understand their business models, frailities etc.

    Not a single response that says "OMG consumers don't get us - what can WE do to fix that"

    Kind of reinforces what the blog is saying.