Complaints increase as telcos grapple with new services

Australian telecommunications companies have come under fire after the Telecommunications Industry Ombudsman released a report yesterday which revealed the number of complaints against companies increased 1.8% in the last six months.

While the growth of the number of complaints has slowed, with only a 1.8% increase compared to a 46% increase during 2007-08, communications minister Stephen Conroy says the telcos must lift their game.

“The increase in complaint statistics over the past 18 to 24 months suggests that consumers do not have confidence in their service providers,” he said yesterday. “At a minimum, it suggests the performance of teleco companies has not met consumer expectations.”

Ombudsman Deirdre O’Donnell also said the number did indicate some improvement, but more could be done to stamp out the number of complaints received.

“The stabilisation shows that our collaborative approach with service providers has been effective, but they need to continue their efforts to prioritise customer service,” Ombudsman Deirdre O’Donnell said.

“The proportion of complaints about customer service-related matters has remained unacceptably high and, in the TIO’s view, the industry still has much work to do in this area.”

Most of the complaints received by the companies included in the “Connect Resolve” program were due to incorrect or inadequate advice, with failure to take action on requests coming up second.

Dodo recorded the highest growth figure for the number of complaints received, jumping 33.2% from 283 in January to 377 in June. The company’s complaint numbers have been a problem in the past, with the 2007-08 TIO report showing 6,683 complaints for the 2007-08 year, compared to the much bigger Optus at 9,063.

Dodo’s managing director Larry Kestelman said in the report that the company is working on reducing its customer service issues.

“As with any business with a large customer base… we understand some level of complaints will always surface. Therefore, to ensure these processes are followed accurately, promptly and with the highest level of customer service, complaints are now handled by our most senior customer service staff that have access and skills equipped to handle them in the quickest time possible,” he said.

Telstra managed to reduce its number of complaints from 10,210 in January to 10,036 in June, but chief executive David Thodey said the figure isn’t good enough.

“To put it simply, I am disappointed with Telstra’s results. There has been a substantial improvement in some aspects of Telstra’s performance during the period of the campaign and our performance on the data in the TIO’s progress summary is better than the performance for the industry over the same period. However, we need to do much better and we are focussed on ensuring that we do this,” he said.

A less glowing report was given to the TIO from VHA chief executive Nigel Dews, who said in response to 3 Mobile’s complaints report that the Ombudsman could have helped set benchmarks and identify key issues.

“I know my team also felt that the Ombudsman’s office could have helped us benchmark what improvements were necessary based on the view that you have of the industry. In other words your office could have taken a more active role with us all rather than just reporting on the data and distributing it.”

VHA’s 3 complaints increased by 22.4% during the six months, with 1,137 recorded in January and 1,392 recorded in July. Complaints to VHA’s Vodafone also increased by 13.6%, from 920 in January to 1,045 in July.

Optus, the nation’s second largest telco, recorded an 18.4% increase in complaints, above the industry standard. Additionally, 33.6% of those complaints related to customer service and complaint handling, an increase from 32.7% in January.

Other companies included in the report were AAPT, Primus and Virgin Mobile. Both Prime and Virgin Mobile were able to reduce the number of complaints received in the six month period.

Warren Chaisatien, managing director and principal analyst at Telsyte, says more and more complaints will be heard from telcos as the market grows with new handsets such as the iPhone.

“The market has become so competitive, and handsets have become a big issue for carriers. The market is so saturated now, and telcos are now poaching different customers from networks, and I guess they will do anything to get them to move, and the Ombudsman has heard complaints about what may happen when some customers are in that process.”

“I also don’t think consumers realise that when they enter a contract, they are locked in for however long, 12 months or 24 months, but when they see a new phone they may want to move carriers. They might like a few new features, but they won’t think about the contract terms with their own carrier and obviously that might cause them to complain.”

Nathan Burley, analyst with telecommunications research firm Gartner, suggests the number of new services in the market may stretch some companies a little thin.
“As we see more and more services offered, and more complexity, you’re going to see more complaints. Telcos now have to think about and provide customers support for these new services, and there’s probably some instances where they aren’t prepared for the new types of inquiries.”