Lessons from a big island

“Consumer complaint levels in the telecommunications industry are far too high and poor customer care (both directly and indirectly) drives many consumers to complain. Poor performance in these areas imposes real and significant costs on consumers. It also imposes unnecessary costs on industry.

In contrast to their dissatisfaction with customer service, consumers are generally satisfied with the quality and service reliability of the communications services themselves. They are increasingly demanding faster services with more functionality and greater capacity and, for the most part, industry is meeting these demands.

However, this juxtaposition raises an important question—why is the quality of customer care being provided by telecommunications companies failing to meet consumers’ expectations when the services they provide generally do?

While it is evident that complexity, convergence and the rapid growth in both new services and demand have had a profound impact on the industry and, in turn, on consumers, these matters alone cannot entirely explain or excuse the level of consumer dissatisfaction in the sector.”

Believe it or not, this is an excerpt from a report published by the Australian Communications and Media Authority (ACMA) but it could easily apply any telecoms market around the globe.

Indeed, even ACMA recognizes that “Australia is not alone in dealing with these challenges—regulators and service providers in other jurisdictions are also grappling with such changes. In some overseas jurisdictions, however—where the number of services in operation is significantly higher than in Australia—the comparable number of consumer complaints is considerably smaller. This suggests that telecommunications companies in those jurisdictions may be offering a level of customer care that meets their customers’ expectations (or simpler products that give rise to fewer customer concerns in the first place). The evidence before the inquiry suggests that in Australia they are not.”

It goes on to state quite categorically that, “the way in which the telecommunications industry in Australia deals with its customers must change, and change immediately.”

How does a market get in such a state that it requires the regulator to step in and call for radical change in the way the CSPs operate and in the way their customers are handled. Contrary to popular belief, particularly amongst the British, that Australians are perennial whiners, it has been established by ACMA that they have plenty of reasons to be unhappy. The Insider has commented previously on the complexity of capped plans offered there and the incredible amount of complaints received by the Telecoms Ombudsman, but these are not the only reasons for change.

The ACMA is formally inviting the industry to incorporate the following changes to its Telecommunications Consumer Protection (TCP) code by February 2012:

1. Clearer pricing information in advertisements allowing consumers to more easily compare services
2. Improved and more consistent pre-sale information about plans
3. Developing meaningful performance metrics which allow consumers to compare providers
4. Tools for consumers to monitor usage and expenditure
5. Better complaints-handling by providers

The Insider suspects that other regulators and consumer bodies may be watching progress in this far-flung continent as a guide to handling issues closer to home. It may be no coincidence that Google has just released figures that show Australia has the second largest penetration of smartphones in the world. Does this have a correlation with the number of complaints and consumer issues in the market? Has the remarkably swift onset of smartphone take-up taken the mobile operators by surprise leaving them ill-equipped to introduce easily understood plans? Perhaps it’s because all the operators steered well clear of those ubiquitous and incredibly popular (in other markets) “all-you-can-eat” plans?

For those markets moving away from fixed to capped plans, this may be a portent of what will happen to them. Increased customer confusion, more calls to customer care, potentially bad publicity from disgruntled users and, even worse, forced intervention by the regulator. Think clearly before making the move and take a close look at what ACMA has recognized, it may save CSPs a lot of agony.