NBN complaints rise by 40 percent amid continuing drop in telco complaints

Complaints to the TIO about 'unusable' and delayed NBN services have risen again, though not as rapidly as new connections have been made.
Written by Corinne Reichert, Contributor

Complaints to the Australian Telecommunications Industry Ombudsman (TIO) about the National Broadband Network (NBN) were up again for the December 2015 quarter, with a 40.1 percent jump in complaint numbers year on year.

The TIO has released its statistics for the October to December quarter, revealing that 2,176 new NBN-related complaints were registered, with complaints regarding delays in connecting to the NBN increasing by 23.5 percent year on year.

Complaints about unusable NBN services jumped by 42.6 percent quarter on quarter for internet services, up to 184 complaints; and by 47.9 percent quarter on quarter for landline services, to 210 complaints.

These complaints had a high rate of being resolved, however, according to Acting Ombudsman Diane Carmody.

"The majority of complaints about unusable NBN services happened during the first few weeks of consumers transferring their services from copper to the NBN, and 90 percent were resolved after the TIO referred them back to the telco," Carmody explained.

The TIO also noted that the 40.1 percent increase in all NBN complaints was far lower than the 128.3 percent growth in premises connected to the NBN over the same period, a comment also made back when same issue arose at the end of last year.

"While NBN is working hard to provide [a] positive customer experience for everyone, we acknowledge we don't always get it right," an NBN spokesperson told ZDNet.

"The number of complaints per 100 connections is going down if you consider the rapid rise in connections over the past year. Connections to the NBN network, when compared to the same period in 2014, grew 128.3 percent or 413,661 new active homes and businesses, outstripping complaint numbers substantially."

The TIO also revealed that telco complaints are now at the lowest level recorded for nine years.

In total, the TIO received 23,572 new complaints about telcos for the period, with 40 percent about mobile services; 32.4 percent about internet services; and 27.6 percent about landline services.

Mobile services complaints dropped by 36 percent year on year, from 14,743 in October-December 2014 to 9,434 in October-December 2015, thanks to declining numbers of excess data charge complaints and improved mobile coverage.

Landline complaints also reduced, from 7,971 to 6,499, or by 18.5 percent.

Internet complaints, on the other hand, rose by 11.6 percent year on year, to 7,639 new complaints. This was due to a higher number of internet fault issues, such as slow data speeds, connection dropouts, and unusable services. Over the quarter, 1,662 slow data speed issues and 1,039 service dropouts were recorded -- both higher than in the year previous.

Across mobile, internet, and landline, billing issues continue to be the most complained about issue, with 42.5 percent of all complaints in the quarter concerning bill amounts, monthly plan fees for unusable services, and termination fees.

"I welcome the continuing drop in mobile and landline complaints, but internet service providers need to be on alert about internet fault complaints," said Carmody.

Faulty services made up 33.2 percent of complaints, at 7,829 new complaints.

The Australian Mobile Telecommunications Association (AMTA) welcomed the TIO's report, saying telcos have been working to improve the quality of services.

"The continuing fall in mobile complaints particularly in relation to issues such as mobile coverage and excess data charges reflects industry's strong commitment to infrastructure investment and customer service," AMTA CEO Chris Althaus said.

"The latest results and the trend they represent are good news for all concerned and further incentive for industry to continue to work to drive complaint levels even lower."

Government agency the Australian Communications and Media Authority's Telecommunications Consumer Protections (TCP) Code, which first came into effect in July 2012, has so far driven a fall in consumer complaints to the TIO of 35.8 percent since 2012, from 193,702 in 2011-12 down to 124,417 in 2014-15.

The TCP Code serves the primary purposes of requiring telcos to provide consumers with clear information about what their mobile phone plans offer; notifying customers about how much voice and data they have used under their plan; and suggesting spend-management tools to prevent future overuse and subsequent bill shock.

Earlier this month, the TIO reported in its quarterly Telecommunications Complaints in Context report [PDF] that Optus was again the most complained about telco, having received 5.9 complaints per 10,000 services in operation (SIO) for the October to December quarter -- a year-on-year rise of 9.3 percent.

Vodafone Australia is continuing to see the biggest drop-off in complaints, with a 66.7 percent drop year on year, from 10.5 complaints per 10,000 SIO down to just 3.5.

Telstra also kept falling, from 6.4 down to 4.9 -- a 23.4 percent decrease year on year, and a 10.9 percent decrease quarter on quarter.

Mobile services operator Amaysim, which last month acquired mobile virtual network operator Vaya for AU$70 million, saw a 53.3 percent decrease in complaints year on year, from 1.5 per 10,000 SIO down to 0.7.

On Friday, market research company Kantar published market share statistics showing that Optus, along with mobile virtual network operators (MVNOs) Amaysim and Aldi, are experiencing growth at the expense of Vodafone Hutchison Australia (VHA), Virgin, and TPG, while Telstra remains stable.

As of the end of December, Telstra had a total market share of 39.3 percent, falling by 0.2 percent year on year; Optus took out 22.8 percent, a rise of 1.3 percent; VHA 14.8 percent, a drop of 2 percent; other MVNOs 9.1 percent, a growth of 1.8 percent; Virgin 5.3 percent, a decrease of 1.5 percent; Amaysim 3.9 percent, a rise of 0.3 percent; Aldi Mobile 2.5 percent, a growth of 0.8 percent; and TPG 2.3 percent, a loss of 0.5 percent.

In the post-paid sector, Telstra grew by 0.1 percentage point over the year, to 41.2 percent, Optus jumped by 2.9 percent to 24.1 percent; VHA fell by 3 percent down to 15.3 percent of the market; other MVNOs jumped from 6.4 up to 9 percent; Virgin dropped by 1.4 percent down to 6.1 percent; TPG fell by 1.1 percentage points, down to 1.8 percent; Amaysim remained relatively stable, at 1.3 percent; and Aldi grew by 1 percentage point up to 1.2 percent.

Kantar attributed Optus' growth in the post-paid segment to its "generous data plans" for the iPhone 6s. Optus' entry-level plan for the latest Apple smartphone is AU$70 -- AU$17 cheaper than Telstra, and AU$9 cheaper than Vodafone.

"Such plans have allowed Optus to acquire more post-paid customers than it has lost (10 percent new customer gain rate vs. 8 percent churn rate over the 12 months to December 2015), with customers switching from the major networks Telstra, Vodafone and Virgin. An increased reliance on Apple has driven the Optus post-paid customer profile towards a younger female audience (55 percent aged under 35, 55 percent female)," Kantar noted.

For the prepaid mobile sector, Telstra sits on the top, at 4.3 percent market share, trailed by Optus, at 22 percent; VHA, at 15.1 percent; other MVNOs, at 6.6 percent; Amaysim, at 6.2 percent; Aldi, at 5 percent; Virgin, at 3.8 percent; and TPG, at 1 percent.

The no-contract market almost doubled over the past year, now accounting for 14 percent of total mobile market share. For this segment, Telstra contributes 29.7 percent market share, followed by Optus, at 19.8 percent; other MVNOs, at 15.2 percent; VHA, at 12 percent; Amaysim, at 8.2 percent; TPG, at 7.2 percent; Virgin, at 6.1 percent; and Aldi, at 1.8 percent.

On Thursday, Telstra announced a net profit of AU$2.13 billion on revenue of AU$13.68 billion for the first half of FY16, with growth attributed to bundling entertainment and offering more mobile data.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 1.7 percent, to AU$5.41 billion.

Telstra added 235,000 domestic retail mobile customers, to bring its total up to 16.9 million. Telstra's average revenue per user (ARPU) for post-paid was AU$61.38, while prepaid ARPU was AU$21.20.

Optus last week announced a net profit of AU$227 million on revenues of AU$2.43 billion for the quarter ending December 31, due to growth in mobile and NBN.

EBITDA was AU$685 million, up AU$33 million or 5.1 percent from the AU$652 million announced in December 2014.

Optus lost 26,000 mobile post-paid handset customers over the quarter due to "the deactivation of a wholesale customer" -- likely TPG -- but gained 61,000 prepaid handset customers, with total 4G customers up 314,000 quarter on quarter, to 4.45 million. Its 4G mobile services now have a 47 percent penetration rate.

Optus' post-paid mobile ARPU was AU$61, while prepaid ARPU was AU$28.

Vodafone is due to present its financial results on Monday next week.

Updated at 12.15pm AEDT: Added comment from NBN.

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