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May 20, 2009

Optus takes on Telstra for the worst customer service

Despite not being exactly a beacon of fine customer relations, comparatively speaking, Telstra’s customer service is certainly not the worst in Australia.

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Following the stealth departure of Sol Trujillo from the Telstra CEO role late last week and the abrupt resignation of former National Farmers Federation boss, Donald McGauchie as Chairman, there has been general acknowledgement that Telstra’s American experiment was largely a failure.

Alan Kohler in Business Spectator today summed up Trujillo’s tenure succinctly, noting that the Wyoming-native “was a smart, almost blinding salesman, but to my mind — and to many others — he was too arrogant and condescending.”

While praising Trujillo for the launch of the 3G network. Kohler, like many commentators, was highly critical of Telstra’s poor customer service record, claiming that “Telstra is now one of the least customer-friendly businesses in the country. It is virtually impossible to deal with: even the employees hate having to ring the company to get something done. Making a minor change to one’s phone service can be a nightmare.”

Despite not being exactly a beacon of fine customer relations, comparatively speaking, Telstra’s customer service is certainly not the worst in Australia — perhaps Kohler hasn’t had the privilege of dealing with Telstra’s main competitor, the majority Singapore-owned (and Irish-run) and Optus.

While Telstra’s BigPond division’s customer service levels are somewhere between ordinary and abhorrent, the service levels of its fixed and mobile phone divisions are passable. Telstra has a centralised contact number (13 22 00) and a voice recognition system which is reasonably effective. In most instances, Telstra call centres are staffed by Australians (who introduce themselves by name and state where they are located in Australia) and the “hold time” (with the exception of BigPond) is generally satisfactory.

By contrast, Optus has at least ten different contact numbers for everything from billing to technical support to new connections. Further, Optus employees are trained in specific areas, so an Optus staffer who deals with Residential DSL is not able to answer an enquiry relating to Business DSL or Residential ADSL2 or normal home phones (Optus’ internal systems simply do not allow it). If a customer is transferred through to the wrong area (a common occurrence), they will then have to wait on hold while they are passed around to someone who is able to deal with their query.

Moreover, for customers seeking technical assistance, Optus will regularly put the caller “on-hold” for upwards of one hour, even if the call relates to a problem caused by Optus itself. After the inevitable hold-time, the customer is often transferred to a representative based overseas who is unable to assist with the problem. In many instances, overseas-based Optus employees are so poorly trained that even when the customer eventually reaches the correct division, they Bangalore-based contractor is unable to be of any actual assistance.

Since 2004, around the time of CEO Paul O’Sullivan’s appointment, Optus drastically cut Australian call centre staff and moved those roles to its call centre operations in India. While Optus’ Australian employees saw their roles shifted offshore, O’Sullivan was paid more than S$2.6 million in cash alone last year and was eligible to receive more 740,000 SingTel shares. In 2006/07, O’Sullivan was paid S$1.9 million cash and was able to receive more than 900,000 shares.

Telstra may not have been well managed in recent years — its relationship with government evaporated and Trujillo’s hostile regulatory stance ended up backfiring on the company and its shareholders. Further, during Trujillo’s reign, Telstra shares fell by more than 36%. However, when it comes to customer service, Telstra is far from the worst — that title is claimed by its overseas-owned competitor, whose main goal is to send profits back to Singapore rather than to serve its several million Australian customers.

Adam Schwab —

Adam Schwab

Business director and commentator

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