The trouble with Telstra

The trouble with Telstra

The last couple of months have been tumultuous at best for Telstra having hit the headlines for all the wrong reasons. Whether it is the network outages or threats from rival networks, Telstra’s problems have been large but ultimately fixable.

However, their latest blunder might not be easily fixable as the mobile giant revealed last week that they would stop publicly supporting the LGBT community in their quest for legalising same sex marriages.

Despite making a U-turn on the stance, the gay community has been merciless with their response essentially boycotting any products or service that has direct links to the company.

With the latest saga still raging on, could we be finally seeing Telstra’s fall from grace or will this be just yet another passing storm?

The LGBT debacle

The battle to legalise gay marriage has been one of the longest running sagas to currently plague Australian politics. Although the Federal government has yet to budge, numerous industry powerhouses across the country such as SBS and Qantas had pledged their support to the campaign.

Telstra also initially jumped on the bandwagon until last week when a report from The Australian suggested that the telco would no longer publicly promote the campaign for marriage equality.

It hasn’t taken long for the damage to sink in with gay business networks in Brisbane, Sydney and Melbourne all announcing a boycott against the company and cancelling any ongoing deals that are in place.

Indeed, this was highlighted in comments made by GLOBE (Gay and Lesbian Organisation of Business and Enterprise) president David Micallef who slammed Telstra’s actions. In comments made to SBS, he said: “[We] will not accept any sponsorship or financial support from Telstra, and have already taken steps to cancel the organisation’s phone account.”

Realising the error of their ways, Telstra CEO Andrew Penn later completed the full U-turn reinstating their support for the campaign admitting “it was the right thing to do”.

Unfortunately, the damage will not be easy to repair with the company having no option but to try and win back a community whose fight for equal rights has powerful backers on both sides of the debate.

Only themselves to blame

It’s not uncommon to see a large company go through struggles but more often than not, there are always one or two mitigating factors that can’t be controlled.

However, all of Telstra’s problems have come from mistakes made within the company that could have avoided and handled much better when possible.

To understand this a bit better, let’s look at the network outages that have occurred several times since the start of 2016. So far this year, there have been at least 3 major outages that has wiped out service nationwide.

Each outage has been caused by different issues with both February outages cited to “human error” whilst March’s was blamed on a gateway glitch at a depot in Victoria.

Whilst it is only fair to accept that problems may happen from time to time, it is hard for someone to comprehend that a network that is used by over 16 million people could completely shut down due to a single human error.

This “human error” wasn’t brought about by inexperience though, it came as a result of a worker not following the correct procedure and trying to cut corners when they shouldn’t be. The result? Yet Another outage.

To try and compensate, the network did give users two days of free data in both February and April but it has done little to restore the faith with their vast customer base.

The problems aren’t just on the inside though as it seems that external influences are also taking their toll on the company.

With the recent gay marriage scenario, it seems as if the Catholic Church wrote directly to CEO Andrew Penn about making the company taking a back seat on the issue.

The Church wrote to other large business CEO’s to try and ward off the support but none of them buckled especially the likes of Qantas whose leading figure is a well-known member of the LGBT community.

However, Telstra were the only ones to buckle under the pressure and risk losing one of the fastest growing communities across all of Australia.

Can they turn it around?

For Telstra, the need to turn their fortunes around couldn’t be greater. As their brand and reputation has taken hit after hit, many of their rivals have gained customers faster than ever before.

Vodafone, in particular, are making big strides in this area having expanded their own network coverage up to 97% as well as offering more plans that reflect more on data rather than calls or messages.

It’s been years since Vodafone were able to compete with the likes of Telstra and Optus but their continuing developments have shown that there is certainly room for improvement on current deals.

Optus aren’t lagging behind either as they look to adapt across other booming communications trends such as streaming where they have already trumped Telstra by winning several lucrative contracts.

Indeed, Optus’s shock deal to secure rights to the English Premier League from FOX Sports means that Telstra’s digital media platform will be without one of football’s most lucrative competitions for the first time in over 25 years.

With both Vodafone and Optus making such big gains across all areas of the communications world, Telstra know that they cannot afford to make any more mistakes on any fronts.

However, they will need to get their own affairs in order first to ensure that their own reputation remains intact and to ensure that they represent the values and needs of their current customer base.



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.