How Can Telstra Avoid The Curse Of Vodafail?

Another week, another Telstra mobile network outage. There was a time when that seemed like a very improbable sentence. Now it's a reality that Telstra has to face: what can it do to avoid having its reputation for quality tarnished? More bluntly: how can it avoid Hellstra becoming the new Vodafail?

Zombie picture from Shutterstock

No mobile network is available 100% of the time; signal is imperfect, buildings get in the way, and people make mistakes. But when a network develops a reputation for being consistently unreliable, customers will start leaving it in droves.

That's what happened with Vodafail, the mass exodus from Vodafone back in late 2010. Despite having essentially entirely rebuilt its network since those days and now claiming coverage of 96% of the population, Vodafone still has to deal with the lingering sense from many Australians that its network simply isn't up to scratch. One sign of that: it still offers a "network happiness guarantee" that lets you pull out of a contract in the first 30 days.

There are some important differences between what happened to Vodafone then and what's happening to Telstra now, of course. While Telstra has suffered two widespread but brief outages, the central issue with "Vodafail" was lousy network performance that stretched over days, weeks and months. In part, that was due to insufficient network maintenance; in part, it was because Vodafone had attracted a large customer base by offering pricing that was considerably cheaper than its rivals.

No-one is likely to accuse Telstra of trying to go cheap. Its reputation for having the broadest network coverage and fastest speeds has always come with a caveat: you'll pay more for it. Telstra's data allowances at a given price point remain slightly lower than its rivals. Want to pay $50 a month on a month-to-month plan? Optus and Vodafone will both give you 5GB of data a month; on Telstra, you'll only get half that.

Yet even here there are some indications that the world is changing. Telstra has been trialling a new plan for "power users", which offers more data (7GB rather than 5GB) but eliminates most support options. It's still not a super-competitive deal, but it suggests that price sensitivity is starting to become an issue.

It's also a riskier time to be upsetting potential SIM buyers. Telstra can't automatically assume that its customers are on 24-month contracts and will have to put up with variable network performance until that contract is finished. Figures from Worldpanel ComTech show that the percentage of Australians on contract deals is declining, while the number signing up for SIM-only month-to-month deals doubled over 2015. A big reason for choosing those plans is that they frequently offer more data than contract deals, but the flexibility they offer is also an important part of their appeal. If your network keeps having issues, you can switch.

So far, Telstra has been quick to acknowledge its mistakes, offering free data days to make up for the outages. That's a fair way of dealing with the issue, but if free data starts becoming a monthly occurrence, customer patience may eventually wear thin. We haven't reached the seventh circle of Hellstra yet, but it's lurking there somewhere under the smoke.

Angus Kidman is editor-in-chief for comparison site finder.com.au , a former editor for Lifehacker Australia and a serial SIM card tester. Follow him on Twitter @gusworldau.


Comments

    One of the big things with the telstra outages it wasn't just an area here or there but multiple major cities at the same time. Virtually an entire network crippled. I can't recall outages that bad with other utilities.

    I think the outrage is partly due to the fact we are not used to getting outages with Telstra. The network has usually been very good.

    I guess this is expected, as the price you pay should reflect the service you receive. Unfortunately, I would say that many people use Telstra service for their work. These outages occur during the week, when we need the service the most (No phones /emails etc = lost income). The free day is great, but one a Sunday when it doesn't make up the lost time at work.

    Personally, it doesn't bother me. I work a job without commissions or targets etc, but if you did or perhaps own your own business, it would.

    I have to have coverage everywhere for work, so I have to use Telstra. Even at home there are no other providers which provide the same coverage. Two incidents within such a short time are pretty bad but by and large the network has the best coverage and overall reliability out of any of the major services. Vodafone's issues were over a protracted period which showed that they hadn't planned ahead for congestion. Optus are worse (they don't even cover my suburb that well).

    If it's just two instances I doubt anybody will care, and when all is said and done, if you want service in the arse end of nowhere, nobody but Telstra is likely to help you (or you need a satphone).

    I'm a Vodafone customer because they are the best value for my needs, i.e. they provide coverage too all the places I visit and I've never had any major issues with their network (I was a 3 customer before that), I did have some minor performance issues during the so called vodafail time, but they halved my plan costs for 6 months and by then it was all fixed.
    Where I work Vodafone (in a shopping centre) as the best coverage, they have service where nobody else does (carparks and nearly all the shops)

    Vodafail was a failure to plan ahead for a major increase in data due to the smartphone revolution which can kinda be forgiven because most people didn't see it coming, thankfully for me it drove away most of the extremely data heavy users from the network and now it GREAT!

    Telstra on the other hand has had 2 major wide spread complete failures with no warning, now that strikes me as either hardware failure without the correct redundancies in place or poor design somewhere, hopefully its not indicative of poor maintenance etc and its going to stop.

    Wow, the network drops out twice for no more than a couple of hours and all of a sudden it's the apocalypse.

    And ... Telstra have been hit with another national voice outage today.

    http://www.smh.com.au/business/consumer-affairs/telstra-investigating-national-outage-20160322-gno5mi.html

    Three National outages in two months? How's that "outsource everything" strategy working out for them?

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