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Optus, iiNet, M2 skyrocket in TIO complaint numbers

Consumer complaints to the Telecommunications Ombudsman about Optus were up by over 30 percent, while iiNet's numbers were up by 26 percent, and M2's by almost 75 percent.
Written by Corinne Reichert, Contributor

The Australian Telecommunications Industry Ombudsman (TIO) has published its Annual Report 2014-15, revealing that while Telstra, Vodafone, TPG, and Virgin have all improved their complaints statistics, competitor telecommunications providers Optus, iiNet, Dodo, Vaya, M2 Commander, and iPrimus have all increased substantially.

According to the report [PDF], Optus saw an increase in total complaints of 31.5 percent, from 14,144 during FY14 to 18,601 in FY15.

This was Optus' first increase in customer complaints in five years, and was attributed mainly to internet service issues -- internet service complaints grew by 52.4 per cent, landline complaints by 35.2 per cent, and mobile complaints by 24.1 per cent.

Optus has been facing increasing competition on both mobile and fixed-line fronts, with M2 Group announcing plans last week to merge with fibre infrastructure company Vocus Communications to form the fourth-largest telco in Australia, and Vodafone Australia following with news that it had signed a AU$1 billion deal with TPG for mobile services.

The Vodafone-TPG deal will see TPG's 320,000 mobile customers moved from Optus' mobile network across to Vodafone.

Optus has denied that the deal would affect it to a large extent, and merely said that it is in discussions with TPG on future plans, and regardless continues to be a primary mobile network provider in the space.

"Optus remains the leading wholesale service provider in the market," an Optus spokesperson said.

"We are currently working with the TPG Group on revised wholesale arrangements, but expect to be a continuing wholesale provider to the TPG Group in the future."

TPG's deal with Vodafone follows its acquisition of rival telco iiNet earlier this year in a deal worth around AU$1.5 billion, wherein TPG paid AU$9.55 per iiNet share, incorporating a AU$8.80 cash or scrip consideration and AU$0.75 cash per share.

The acquisition will see TPG overtake Optus in customer numbers as a fixed-line provider.

iiNet shareholders ultimately voted in favour of the acquisition, with the ACCC and the Federal Court also approving the deal last month.

According to the TIO's annual report, however, iiNet customer complaints were up by almost as much as Optus', increasing by 26 percent from 3,051 complaints in 2013-14 to 3,844 in 2014-15. The TIO attributed the complaints to internet and mobile repair delays, slow speeds, and disputed charges.

All three of M2 Group's telco brands also saw substantial rises in complaints. Complaints about Commander were up a massive 73.6 percent, from 864 in FY14 to 1,500 in FY15; iPrimus was up 18.5 percent, from 1,072 to 1,270; and Dodo was up 17.3 percent, from 3,187 to 3,737.

The woes of M2 were due to disputed bills, poor contract information, disputed service charges, slow speeds, landline repair delays, and internet and mobile repair delays.

Vocus' merge with M2 will form a telco worth AU$3 billion, bringing it closer to Telstra, TPG, and Optus.

Mobile provider Vaya, which resells Optus' 4G mobile services, saw its complaints increase by a whopping 288.4 percent, from 421 to 1,635, due to excess charges, disputed bills, and failed usage notifications. The company did note, however, that its customer base had increased by 174 percent over last two years, which may have contributed to the increase in complaints.

Meanwhile, telco providers Telstra, Vodafone, TPG, and Virgin all saw an improvement in their customer complaint numbers. Complaints about Telstra decreased by 4.3 percent, down to 55,529 for 2014-15, while Vodafone's dropped by 46.2 percent, from 35,876 to 19,311; TPG's by 5.4 percent, from 4,759 to 4,501; and Virgin's by 38.9 percent, from 3,460 down to 2,115.

Vodafone's 4G mobile network currently covers 96 percent of the population, while Optus only claims that its 4G network covers 90 percent, and Telstra lays claim to 94 percent. However, according to a report by OpenSignal last week, which calculates "time coverage", Vodafone covers 77 percent of the population, Telstra 76 percent, and Optus 70 percent.

In regards to speeds, Telstra is the 21st fastest mobile network provider worldwide, at speeds of 23Mbps; Vodafone is in 37th place and Optus is in 43rd place, both with average download speeds of 19Mbps.

The TIO's annual report also revealed a 68.6 percent increase in complaints by consumers about the National Broadband Network (NBN), but an overall drop in total complaints to the TIO.

Australian Communications Consumer Action Network (ACCAN) CEO Teresa Corbin said communication needs to improve between NBN, consumers, and retail service providers (RSPs).

"The number of subscribers on the NBN has grown substantially, but NBN and the retail service providers (RSPs) need to ensure consumers aren't worse off during the switch-over," Corbin said.

"ACCAN is calling on the telcos and RSPs to publish their complaint data so that problem areas can be better identified and consumer complaints can be avoided. This also benefits the industry, as it allows showcasing of low complaint levels by the star performers."

More than 124,000 complaints were made about mobile, landline, and internet services during FY15, a drop of 10.5 percent year on year in the fourth consecutive year of telco-related complaints to the TIO decreasing.

Mobile complaints were down 21.1 percent, to 57,983 -- the lowest number since 2007-08. The TIO attributed this to greater transparency in data usage through alerts to consumers, required under the Telecommunications Consumer Protection (TCP) Code, as well as improvements in coverage due to continuing investment in mobile infrastructure.

"Improved coverage through telco investment in mobile towers, and usage and spending alerts that help consumers control data and phone usage, have contributed to this improvement," Acting Ombudsman Diane Carmody said.

The Communications Alliance welcomed the results of the report, having said it signalled an improvement in network infrastructure and customer service within Australia.

"This is the fourth consecutive year of significant reductions in complaints, and it is fair to say that industry is on a long-term path to greater customer satisfaction. The TIO results are backed by our quarterly national polling which also shows steady improvements in customer satisfaction since the commencement of the polling two and a half years ago," Communications Alliance director of Program Management Christiane Gillespie-Jones said.

"This improvement stems from various factors, including huge investments into improved networks, a strong Telecommunications Consumer Protections Code, and most importantly, an industry-wide commitment to deliver an outstanding customer experience to customers."

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