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iiNet, TPG consumer complaints skyrocket

Complaints about Vodafone and Telstra decreased, while those about Optus and iiNet/TPG rose, according to the Ombudsman's annual report.
Written by Corinne Reichert, Contributor

While overall complaints to the Australian Telecommunications Industry Ombudsman (TIO) have decreased by around 10 percent over the last year, those about telco iiNet jumped by almost 50 percent.

According to the TIO's Annual Report 2015-16 [PDF], iiNet saw a 48.2 percent increase in new complaints across all service types throughout the year -- mobile, internet, and landline.

(Image: TIO)

The TIO also said iiNet's now-owner TPG saw "mixed results" over the year, with an overall increase in complaints of 7.4 percent. Complaints about TPG's internet and mobile services increased, while landline complaints decreased.

On Tuesday, market research company Kantar revealed that TPG/iiNet has also lost mobile market share over the last year, accounting for just 2.7 percent of the total mobile market, down from 3.1 percent this time last year.

Its prepaid customer base fell from 1.4 percent to 0.8 percent of the market; its post-paid customers accounted for 1.9 percent of the market, down from 2.8 percent; and its no-contract customers amounted to 9.4 percent of the market, down from 9.6 percent.

The TIO also reported that complaints about Optus increased during the year, jumping by 18.2 percent. Complaints about landline and internet services increased, while complaints about mobile services decreased.

Optus CEO Allen Lew last week said during Optus' financial results call with media that Optus' complaints statistics "remain an area of concern" for the telco.

"I think we certainly take a look at the TIO data very closely, we are not happy with the fact that our numbers ... are still high," Lew said.

"But I think if you look at it on a quarter-by-quarter basis, it had gone down, so that is good from our perspective, there are still things that we need to do better, and we will continue to look at some of these, and we will take action on some of it.

"I think at this time, it remains an area of concern for us, and we will continue to work on it."

According to Kantar, Optus clocked a rise in total mobile market share of just under 1 percentage point over the year -- from 21.4 percent in September 2015 to 22.3 percent in September 2016.

Telstra and Vodafone Australia were the only two major telcos to see decreases in the number of new complaints over the year, the TIO said, with Vodafone shaving off complaints by 59.5 percent year on year. Vodafone has seen a "sharp reduction" in complaints over the last three years about its mobile services. Telstra's internet service let it down, leading the telco to have an overall reduction in complaints of just 3.2 percent.

According to Vodafone chief strategy officer Dan Lloyd, the telco brought down its complaints by implementing a complete "mind shift" across the business.

"What we really did was a mindset shift, so I think historically, the company viewed complaints as something that you needed to manage, rather than signals that there's something that you really need to think about and probably need to change," Lloyd said in September.

"And we've now set up a very systematic process where our frontline teams have a route direct to the top of the company to tell us dynamically what is it customers are complaining about, and then we have forum that doesn't simply ask how can we make those annoying customers go away, but asks what is it that we could fundamentally change?

"It's out of that process that we made big changes to our products and services, made big changes to our credit policies, made big changes to our whole complaints-management system, and I think it's only when you make that fundamental mindset shift that you can drive the sort of amazing productions that we've driven over the last few years."

Telstra's total mobile market share was up 0.2 percentage points year on year from the 39.7 percent reported at the end of September 2015 despite its seven outages during the year, while Vodafone Hutchison Australia's market share fell by 0.2 of a percentage point to 14.9 percent of the Australian mobile market, according to Kantar.

Ombudsman Judi Jones attributed the decrease in overall complaints to telcos offering higher data allowances, making more investments in mobile infrastructure across the country, and focusing on improving customer service.

Speaking last month, Optus VP of corporate and regulatory affairs David Epstein said the overall drop in telecommunications consumer complaints is a result of the industry "maturing".

"In essence, it's a function of the industry maturing, and understanding that it's no longer in an environment where there might be two or three customers waiting," Epstein said in October.

"It's about retention, it's about service, and people just won't cop it. The other thing is, it's probably an industry, because it grew up with the TIO almost from the very start of the mobile period, that to some degree informally outsourced its complaints processes rather than taking accountability for its own actions.

"Overall, customer service is getting better, it's getting more consistent. Telcos are getting more approachable, and working out ways to reach out to their customers. There are, however, some ripples in areas; I don't think as an industry we've quite worked out how to solve the issue of interface with the NBN just yet. There's a lot of manual processes, there's a lot of feeling the way through."

The TIO reported that overall complaints about all telecommunications services decreased by 9.6 percent year on year, down to 112,518 during FY16, which also amounted to a 43 percent decrease between 2011 and 2016.

This was mostly thanks to a sharp decline during the first three months of the financial year, however, with new complaints rising throughout the last nine months.

Mobile made up 36.6 percent of all complaints, down by 10 percentage points from last year; landline complaints were up by 1 percentage point, to make up 28.8 percent of all new complaints; and complaints about internet were up by 9 percentage points, to 34.6 percent.

A breakdown by issues saw billing and payments make up 41.6 percent of all new complaints; customer service account for 38.6 percent; faults 34.1 percent; complaint handling 30.4 percent; contracts 21.9 percent; connections 14.2 percent; credit management 14.1 percent; and other 5.5 percent.

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