Another Telstra outage……but will customers seek an alternative?
This week, Telstra experienced its third network outage this year. Millions of Telstra customers across Australia were unable to access phone and internet services. Other Telstra customers complained of poor internet speeds, broken landlines and failure to access various websites.
The outage caused Telstra CEO Andrew Penn to issue an apology, saying he accepted full responsibility for the problem and offered customers a data free day on April 3. Mr Penn said in a statement. “As the CEO I take accountability and I regret the impact on our customers and the fact that we let them down,” (smh, 2016)
So what went wrong?
Telstra have recently blamed their outages on everything from human error, software problems and network cable issues. Since the Andrew Penn took over the company, he significantly increased Telstra’s spending in infrastructure. Was this an indication that the infrastructure was in bad shape? Or, has this increased spending diverted funds away from ongoing maintenance of the network? The recent outages could be just bad luck, however the significant impact on the customers would not be something that Telstra could easily fix with apologies, freebies or even a simple marketing campaign. (News.com.au, 2016)
Damage control marketing
Telstra initially apologised profusely and offered compensation for the outage (data free days), (The Australian, 2016). However, post the third outage, Telstra downplayed the latest issue and reminded customers that they are the biggest and best Telecommunications Company in Australia and effectively have no local peers. In a statement, Telstra said “While small, we appreciate the impact this outage had on the customers affected, and we apologise to them…..while we have the leading network in Australia, like many of our global peers there will always be issues that arise in such a large and complex technology environment.” (News.com.au 2016)
What about the competition?
The other main players in the Australian Telecommunications industry (Vodafone and Optus) have both seized the opportunity to increase their advertisement campaigns in an attempt to entice the disgruntled customers away from Telstra. Each company has taken a different approach to marketing. When searching online, the first website link that appears when you type in ‘Telstra Outage’ is for Vodafone with the headlines ‘Is this the last straw? – Vodaphone.com.au’. The link takes you to a page that states in bold ‘Having trouble with your network?’. You are then offered free access fees for the first month when you switch your phone and mobile plans.
Optus have recently engaged in a more aggressive media campaign using Usain Bolt. They are trying to emphasise that they are fast. The Optus website states that they will ‘Stop at nothing’, implying that when it comes to improving their network, there is no finish line. (Optus.com.au 2016)
Where to now for Telstra Customers
Most customers remember the failure of Vodafone in 2010. Rural customers are well aware of the limited network availability in regional areas from Optus and Vodafone. With respect to complaints about the service of the big three telecommunication companies, the below graph published by the Telecommunications Industry Ombudsman shows that Vodafone is making a comeback whilst Telstra is sure to have an increase in complaints due to recent events.
Traditionally, Telstra have been the most expensive of the three telecommunication companies. Customers have been willing to pay premium prices for a premium service. The latest series of outage will surely test the loyalty of Telstra customers. Interestingly, of all the complaints and comments on social media regarding the recent outages, there seems to be no mention of their intention to switch network providers. As customers, it looks likely that it will take more than a few outages to change our beliefs and attitudes.
Iacobucci,D,2014 Marketing Management (MM4) South Western, Cenegage Learning Mason
Telstra CEO Andy Penn ‘sincerely sorry’ for second outage. – SMH News (Sydney Morning Herald). 2016. Telstra CEO Andy Penn ‘sincerely sorry’ for second outage. [ONLINE] Available at: http://www.smh.com.au/business/telstra-ceo-andy-penn-sincerely-sorry-for-second-outage-20160317-gnlo34.html. [Accessed 19 March 2016].
Telstra hit with fresh outage. – The Australian – 2016. Telstra hit with fresh outage. [ONLINE] Available at: http://www.theaustralian.com.au/business/technology/telstra-hit-with-fresh-outage/news-story/475e6c5e6238474957e684eee77e82b2. [Accessed 22 March 2016]
First Vodafail, now Telstruggle. Is Telstra in strife? – News.com.au. 2016. First Vodafail, now Telstruggle. Is Telstra in strife? [ONLINE] Available at: http://www.news.com.au/technology/gadgets/mobile-phones/first-vodafail-now-telstruggle-is-telstra-in-strife/news-story/d136cc6e9cdf10b555bb3742d0111f33 [Accessed at 24 March 2016]
Having trouble with your network? – Vodaphone 2016. Having trouble with your network? [ONLINE] Available at: http://www.vodafone.com.au/personal/plans/network&cid=cbu:post:mob:new::perf:campaigns:gog&mkwid=sg0muAK2k&pdv=c&pcrid=96244412773&pkw=telstra%20outage&pmt=e?gclid=Cj0KEQjwoM63BRDK_bf4_MeV3ZEBEiQAuQWqkZZXuL3lpvR261TYyLB4deCue6LFLe2uSSixppS58zIaApeJ8P8HAQ [Accessed at 25 March 2016]
Stop at Nothing – Optus 2016. Stop at Nothing [ONLINE] Available at: http://www.optus.com.au/?keyword_k=optus&CID=sem:con:goog:bau:acq:brnd::0:brabrd:br&ppc=1&gclid=Cj0KEQjwoM63BRDK_bf4_MeV3ZEBEiQAuQWqkQ5ikm0qSeq9olM9l3bKFYS0wbd98r6dIpuJoSsLV88aAnmq8P8HAQ&gclsrc=aw.ds&dclid=CJzWisO72ssCFU-YvAoda0kMSA [Accessed at 25 March 2016]