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.