Telstra’s 2016 Network Nightmare

Your expectations, when you turn your phone on and having a signal are probably very much like your expectations of turning on a water tap and finding water. Perhaps they shouldn’t be. Australia is a huge country. Covering it with three networks and expecting flawless coverage 24 hours a day, 7 days a week, 365 days a year might not be realistic. Problems happen from time to time, as we have seen with all of Australia’s major networks over the years. In early 2016, it seems, Telstra are taking their turn.

Telstra’s has huge customer numbers. They supported around 16 million mobile customers at last count, around as much as Vodafone and Optus combined. That significant customer base has been built, largely on the power and perceived strength of their network. Telstra have ( had ) a huge amount of good will built up about the quality of their Australian network coverage and embodied in their brand. Their advertising slogans heralded a ‘network without equal.’

Optus’ market share has remained almost unchanged for years. Vodafone lost millions of customers following their merger with ‘3’ and the network problems they encountered at the time. The company is only now turning it around, years after. Telstra and their network resellers ( MVNOs ) like Boost Mobile have been the key beneficiary of the customers which deserted Vodafone. Many left Vodafone in seek of better network performance.

Unfortunately, it is precisely the high expectations that Telstra have set for themselves and significant customer numbers which have amplified the outrage associated with their recent outages. When their network fails it affects an enormous number of people and, potentially, national productivity levels.

Telstra’s public humiliation on the subject of their network is surprising for a number of reasons. With network their key product and marketing message, they’ve made important and sensible steps to manage it cleverly.

  • National WiFi:
    Telstra have done more than anyone else to roll out national free WiFi. They have followed a scheme that has worked in Europe and re-purposed their national network of phone booths to emit a wifi signal. They delivered the project in less than a year. That’s lightspeed for a telco.
  • Spent $7 in marketing to every $1 Vodafone spent :
    Telstra’s budgets are renowned for being huge in the industry. Over the years, Telstra pent $billions on marketing, telling us how great their network is. They’ve emphasized coverage and speed, separately, at different times. They’ve even gone to court to fight tangential references by competitors which hinted at that their network was ‘better’ than Telstra. Specifically, they sued Optus and won, for suggesting with a map on an advert that Optus’ coverage was nearly as broad as Telstra’s. It’s not. Telstra won.
  • They have invested in their stadium coverage :
    More recently, Telstra have been making investments in their stadium and event network coverage. They insert mobile cells near occasions which will attract a lot of people. As a result, Telstra’s coverage is often substantially better than alternatives.

Customer service, pricing, the way phone companies deal with damaged or faulty phones : these things often get ignored. The primary thing people want from their phone company is coverage they can rely on. That’s why, over the last decade, strategically, Telstra’s network focus, messaging and strategy has been the best in the industry.

You can get all the latest statistics on Australian coverage for each of the major networks, 4G in our coverage page.

So, what happened in each of Telstra’s Network Outages in early 2016 ?

Here is a quick recap on the most significant events in Telsra’s network in the first quarter of 2016.

Event Number1
DateFebruary 9th
Customers Affected16.7m
ReasonHuman Error
Other Notes- Senior management blamed a single individual for the outage
- Customers were sympathetic to the first event
- Telstra turned the situation around offering free data to customers over the weekend. (Although this did not satisfy many businesses affected by the outage who didn't work over the weekend.)
- Subsequent news stories were positive - highlighting how well Telstra had done to manage huge volumes of data over the free weekend.
Event Number2
DateMarch 17th
Customers Affected16.7m
ReasonNetwork registration issue (too many phones connected at once.)
Other Notes- Most customers' issues were fixed in 4 hours, some in as little as 90 minutes
- Telstra offered a second free data day: April 3, 2016
- Some users say 'to little too late'
Event Number3
DateMarch 22nd
Customers AffectedApprox 500k
ReasonHardware failure (Media Gateway / Node)
Other Notes- Victoria and Tazmania the most affected. "with some impact elsewhere"
- Not a national issue but reported as one. Initially described as fixed but then customers kept complaining.

 

What do these 3 x 2016 Telstra outages mean to customers ?

  • Awareness :
    Primarily, these outages show people that Telstra is fallible. After years of carefully managing the perception of it’s network, this many incidents in such a short time has made a mark. Telstra has been cut and seen to bleed. These network outages are now part of the Australian consciousness.
  • Free data days :
    The feel among my friends and colleagues is that free data days are more about fun than anything else. Especially for the geek minded, finding a way to download as much as possible over the Telstra network when you’re not being charged is a sport. One individual downloaded 421 GB.
  • Lower levels of contracts & renewals :
    The biggest impact to Telstra is likely to be a loss of customers. This is especially true if the network outages keep occurring. Vodafone has launched offers specifically targeting Telstra customers who want to leave. The irony. This is probably more marketing than real life success but it’ll stick in the craw of the Telstra board.
  • Potential refunds for business customers :
    After so many outages, businesses have been complaining direct to Telstra. It’s always a tricky balance with network outages. Phone companies try and avoid being held responsible for downstream losses. If a business customer of Telstra lost business as a result of not being able to make or receive calls, Telstra would not want to be liable. Businesses are being asked to apply individually for refunds. Telstra have said each case will be considered on its own merits.

What happens if these Telstra outages continue ?

  • People are looking for it now :
    The industry, journalists, customers and competitors are all waiting for it to happen again. Somewhat like an individual who got caught speeding, then caught speeding again, Telstra are on their third warning.
  • Telstrafail ? :
    It s unimaginable that Telstra would experience the loss of reputation that Vodafone has. But then it was unimaginable to Vodafone before it happened. Could Telstra turn n to Telstrafail ?

Summing up Telstra’s Network Malaise

One swallow does not make a summer. Neither does two. Or even three. The same is true for network outages. Telstra have publically dropped the ball on network three times in the first few months of 2016. They’ve had to issue multiple press releases which include the word ‘embarrassing’ and that’s not good, clearly.

The major problem here is probably customer expectations. Whichever company you go to for your network services is going to get it wrong sometimes. Every system is fallible and while national redundancy is possible, the resulting cost of network services would probably be cost prohibitive for most users.

It is incredibly hard to accurately predict network usage for a phone company. Bigger screens on phones, the downloading of more video, the constant pervading of digital in to our lives are all factors in the exponential increase of traffic. On the other hand, this is what they do. Network planning and forecasting are at the core of everything phone companies are responsible for.

People are generally reasonable. When there is a failure, they want to know how the network will fix it. Customers were ‘sympathetic’ to the first error. They made the most of their free data day. In this case, the Telstra PR team, brilliantly in my estimation, turned the situation around. The news reported the strength of Telstra’s network in dealing with the huge data volumes over the free weekend they offered. Behind the scenes on the first outage, things were far less pleasant. Blaming an individual for a failure like the first one ( as Telstra publically did ) shows terrible leadership and a lack of ownership for the fact that a single person should not be able to cause this sort of mistake. It could be indicative of a flawed culture of fear and cover ups which would accentuate rather than explain these issues.

Perhaps most important, as the number of outages rises, is the loss of brand and reputation. Telstra are being made more accountable in a world of real time social media for their mistakes. Their own levels of marketing spend and network messaging mean they’re held to a higher standard and perhaps that’s appropriate.

People are now waiting for it to go wrong again. Big T has used a lot of the good will it had with customers around network, up. This could be a real cost to Telstra. Will people continue to pay more for better in building coverage and signal in the bush when the brand has been tarnished like this ?

Ultimately, this many outages in such a short time has to blemish a reputation. Especially a reputation as previously sterling as Telstra’s. A rational view of competing networks would tell most people they’d be fine on Vodafone or Optus. But there has to be a trigger to get people to move – to offset the complacency associated with people buying from Telstra.

Optus stand to win the most. Optus is already, actually, spending more on it’s network to lessen the gap in terms of square Kms covered and the proportion of Australia’s population they reach. Vodafone isn’t. It’s focusing on in city coverage and it’s doing well. Independent research shows Vodafone offer the best network in cities.

There’s going to be incredible competition coming later this year in the form of the eSIM or Apple SIM. The world is going to contain better informed customers, with more flexible agreements, a preparedness to try smaller network resellers, and an easier method of changing networks ( which doesn’t require a new SIM. ) This is not the time for Telstra’s crown to be wobbling.

Most Australians get their information on national network coverage not from websites like this one but from their friends and partners around BBQs and other informal social events. Telstra have put themselves on a pedestal and, even now, have fallen a long way. When the weekend scuttlebutt about network begins with complaints from Telstra users engorged by Social Media, perhaps, beyond reason ( in the case of the third event which does not appear to have been a big deal ), it’s far more influential than $billion marketing campaigns telling us everything is OK.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.