“We suck”: will telcos’ new marketing strategy pay off?

“We suck”: will telcos’ new marketing strategy pay off?

Summary: Moves by Optus and Vodafone to reinvent themselves confirm that they've been quite content to milk customers with overpriced data plans, global roaming, and more. Can their new, self-effacing manner right those wrongs?

SHARE:

Discussing the customer-service culture at an industry conference recently, a speaker related his experience interacting with Telstra via Twitter. “One night I was bored and decided to test their customer service,” he told the audience, “so I tweeted to @telstra and said ‘Telstra, tell me a joke’.”

I couldn’t help but snort when the man next to me said “Vodafone” (which, for the record, was not what came back from @Telstra, which offered something corny involving an elephant).

Zanjeer pic. GFDL by Muhammad Hani (http://en.wikipedia.org/wiki/File:PICT0871.jpg)
Telcos' self-flagellation may resonate with customers, but will it convince them to switch? Zanjeer Zani image GFDL by Muhammad Hani.

Big brands used to command respect with their very presence, their warm advertising, their amazing ability to make us feel good about dropping our hard-earned. These days, however, choosing the right mobile carrier is basically a lesson in self-flagellation and choosing the lesser of several evils.

This, we all know – and so does the Telecommunications Industry Ombudsman, judging by the ongoing high levels of complaints about our mobile telcos ever since Vodafone set the high-water mark in mid 2011.

Fast-forward two years, and complaints are still rising (except for those about Optus). The TIO says it is understaffed to handle the volume of complaints, while ACMA says the carriers are only now moving towards resolving issues within 10 working days.

In other words, things are as bad as ever. A recent Communications Alliance survey found that one in five of us dislike our mobile telcos. The difference this time around: rather than insisting the problem is with their customers, the carriers are owning their problems in an almost refreshing display of self-flagellation.

Optus CEO Kevin Russell took many by surprise with his refreshingly frank confirmation – during an ABC interview with Alan Kohler – of something that anybody with a mobile phone has probably known for years: our mobile carriers are all too happy to shove their snouts in our wallets whilst making us struggle with inconsistent reception, supposed 4G coverage that gets saturated when the wind blows, billing errors, extortionate overseas roaming rates, and all the other fun stuff we deal with every day.

Correct me if I’m wrong, but the whole point of having a second telco is to lead the market away from the all-powerful incumbent. If even Optus admits it has botched up its entire raison d’etre, well, what are we to say?

“I think we’ve lost our way in the past three or four years,” Russell told Kohler. “I think we could have done better in the last three or four years and I believe that overall, we followed the market a little bit more than led the market, in my personal view…. You can’t rely on 15-year-old children going over caps and having $2000 or $3000 data bills. That’s just wrong.”

Correct me if I’m wrong, but the whole point of having a second telco is to lead the market away from the all-powerful incumbent. If even Optus admits it has botched up its entire raison d’etre, well, what are we to say?

And if its CEO admits that the company was basically subsisting by letting its customers run up extortionate, immorally high bills and then acting all respectable when they forgive those debts – well, what are we to say then?

V for… um…

Then there’s Vodafone, which by all rights should be leading the market away from Optus and Telstra but in recent years has mainly succeeded in leading the market away from itself.

After two years of working to recover from its network meltdown, the only records Vodafone is setting are in customer losses. The company lose 551,000 customers in the first half of this year, with 335,000 in the second quarter and 216,000 in the first quarter.

Those aren’t the kind of figures any CEO wants to post, and the fact that the progression of time is seeing more customers leave Vodafone – not less – cannot bode well for our limping number-three telco.

Many of those customers, after all, will have signed two-year contracts with Telstra (or, perhaps, Optus, if they preferred to stick with the company that Russell himself described as “the best of a bad bunch”). Which means that in the last year, Vodafone has sidelined itself for two years with more Australian mobile users than the entire population of Tasmania.

That's one heck of a turnaround.

In the last year, Vodafone has sidelined itself for two years with more Australian mobile users than the entire population of Tasmania. That’s one heck of a turnaround.

To its credit, Vodafone has also been forthcoming lately about its weaknesses. A great commercial, which I could not locate on YouTube, had a group of adults talking around a kitchen table. One asks her friend which carrier she ended up choosing and, when the friend responds “Vodafone”, the others all look at her sympathetically and say ‘ooooh’ in concerned sympathy.

Vodafone was just saying what most people would have told their own friends, which made the commercial quite resonant – although clearly not resonant enough to save its plummeting subscriber numbers.

Even the company’s most recent ad – the girl waiting with friends for the call of some cute boy who throws away her number – can’t resist a parting shot at Vodafone. “If you don’t get that call, it’s probably not our network,” the voiceover man says, all but daring viewers to say “yeah, right.”

More recently, Optus has undergone a complete rebranding that put its talking animals out to pasture, and overhauled its plans and introduced a much more reasonable price on mobile data – $10 per GB – as it finally realises we live in a data-centric rather than a voice-centric world.

Optus even released an app that addresses coverage issues by crowdsourcing blackspot locations – a move that I think would benefit every carrier. After all, we all know where our phones don’t work so well, but in the past there has been no point telling telcos who were simply not interested in hearing.

The problem with all of this sucking-up is the implicit message from telcos, which can be summed up thusly: “for years we have been content to screw you with exorbitant prices, sell confusing plans and milk commodity data services like the goose that laid the golden egg. Now that you’re sick of us, we’re going to be nice."

This game got a whole lot fiercer after Vodafone addressed ongoing concerns about global roaming by introducing a $5-per-day cap on roaming to the US, UK or New Zealand.

It may be a preemptive strike in the leadup to new roaming rules that require telcos to notify customers when they’re running up a bill that will require a second mortgage – but it’s something. As a careful caller who still dropped over $500 on casual calls and texts during on a three-week trip to the US last year, that deal alone is almost enough to make me buy a Vodafone SIM for my next trip. Almost.

“These prices do not paint a pretty picture of the Australian telecommunications industry,” Vodafone CEO Bill Morrow said in a statement that also called out the past “ridiculously high default rates” of up to $20,000 for 1GB of data. “I am determined to end global roaming bill shock just as soon as I can and make sure Vodafone customers can simply enjoy their holidays.”

The problem with all of this sucking-up is the implicit message from telcos, which can be summed up thusly: “for years we have been content to screw you with exorbitant prices, sell confusing plans and milk commodity data services like the goose that laid the golden egg. We heard you had to sell your car to pay the mobile bill from your last holiday. Sorry about that. Now we’re really, really going to be nice. Honest."

We’ll see.

Through all this, it is worth noting, Telstra has been content to quietly break competition rules, hand over data to the US government, and build 4G base stations with the promise to have blanketed the country with coverage within the next few years.

Optus and Vodafone are quickly following suit so they don’t lose their ways again. Based on my bad and good experiences with 4G in Melbourne’s CBD, I believe the jury is still well and truly out on that one – but hopefully things can only get better.

What do you think? Is self-recognition the beginning of our mobile telco turnaround? Or will things get worse before they get better?

Topics: Telcos, Data Roaming Charges, Mobility, Smartphones, Optus, Telstra, Australia, Next Generation Networks

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

5 comments
Log in or register to join the discussion
  • An Alternative Point Of View

    Hi David,

    Do you mind if I query some of your comments and make some of my own ?

    1. Could you demonstrate some ‘new marketing’ from one of the Australian telcos which says or implies ‘we suck’ please ?

    Vodafone’s current TV Advert is this one ( to which you linked in your article ) : http://www.youtube.com/watchv=1PotIy1JgdQ&feature=share&list=PL_60t_9s5aE75KdZSAeLaGFTXm21pPwft

    Optus’ current ad is here : http://www.youtube.com/watch?feature=player_profilepage&v=hdTRrq5Vw8g

    Neither, in my view says or hints ‘we suck.’

    2. I agree with your claim that complaints to the TIO have increased. They are up 1% in total on the previous quarter which, in my view, represents a plateau, given the significant rise in complaints from 2010 - 2011.

    The query here is – do you think stating a 1% increase in complaints to the TIO accurately reflects the trend of complain about mobile services to the Ombudsman ?

    The rise in complaints between 08/09 and 09/10 was 13%. The increase between 09/10 and 10/11 was 51%. The increase between 10/11 and 11/12 was 9%.

    My view is that, overall, the trend of ‘significant’ increase has plateaued ( hence 1% growth ) – and is likely to turn down late this year, early next year as a result of the new pricing structures Optus has put in place for domestic and Vodafone for overseas.

    ( Stats are taken from the TIO’s report last year, P 17 ) : http://www.tio.com.au/__data/assets/pdf_file/0011/107975/TIO-2012-Annual-Report.pdf

    3. Your Bio says Australia’s economy relies on Telecommunications Innovation. Do you agree that Australian Telcos are innovating at the moment ? Optus’ new pricing structure will prevent the bill shocks which have caused so much dissatisfaction for years. Australia is one of the first countries to roll out 4G services ( perhaps the first in terms of area covered – I believe only some telcos in the USA and UK have even started. ) Vodafone announced this week they are hiring 750 people in Tazmania to improve their customer service (http://www.smh.com.au/technology/technology-news/vodafone-to-double-tasmanian-workforce-20130301-2f9o4.html ) which, in my view, goes against the trend of corporates in every vertical, including telcos.

    If telcos are innovating with a view to improving the pricing structures, speed and service, should they be commended ?

    4. Do you agree that Australia is the cheapest place in the world to operate a mobile phone ?

    ( This is a link to a recent OECD report which makes that claim ? )

    http://www.oecd-ilibrary.org/science-and-technology/mobile-handset-acquisition-models_5k43n203mlbr-en

    I think your comment that, with all these claims from the telcos of improvement ‘we’ll see’ is a rational one.

    I would also like to put forward the view that we are talking about improving something good.

    Australian telcos contributed about $14bn and 55k jobs to the Australian economy last year.

    http://www.oecd-ilibrary.org/science-and-technology/mobile-handset-acquisition-models_5k43n203mlbr-en

    Telcos spent billions of dollars on spectrum and network investments, in the last year alone, to give us the latest technology in the world, at the lowest prices. They do this, despite the unique challenges to network coverage of Australia – low population and large area.

    I don’t think the telcos are saying ‘we suck’ and I don’t think the facts suggest, objectively, that the ability to call almost anyone else on the world’s largest continent and talk to them for 2 minutes, at a cost of $2 is a service that sucks either.

    I believe they are innovating in their pricing methodologies, customer service activities. I think they should be commended for it.

    I don’t think things are ‘as bad as ever’, I don’t think telcos should be ‘snorted’ at, and I don’t think the services we’re choosing are from ‘The best of a bad bunch.’ If they were a bad bunch, the 88% of Australians with a mobile phone wouldn’t bother with one.

    http://www.roymorganonlinestore.com/News/Mobile-phone-use-grows-as-home-telephone-connectio.aspx

    Note for disclosure : I work on a website which compares mobile phones, services and pricing.

    Interested in your thoughts on this alternative point of view.
    Kurt_Hands
    • Pre-paid credit expiry still Sucks!

      Savvytel is the only provider I could find in Oz that doesn't regularly confiscate unused credit on pre-paid sims with their 'never expires' option for casual mobile users.
      Sultanabran-
    • Australia is propably most expensive to operate a mobile phone

      Kurt if you believe That Australia is CHEAPEST place on the word to operate a mobile phone; You never live Australia,or live in dreams.
      ozi52
      • Hey ozi52

        Hey ozi52,

        Check out page 32 of this report and let me know if you think I've misunderstood. I've worked at telcos in 3 countries, including Australia, and I can tell you, it's cheap over here !

        http://www.oecd-ilibrary.org/science-and-technology/mobile-handset-acquisition-models_5k43n203mlbr-en

        Kurt.
        Kurt_Hands
  • Maybe They Could Hold A Regular "We Suck" Day

    And convert to Buddhism while they're at it.
    ldo17