Telco industry failing small businesses, says Ombudsman

3 June 2020, Written by Business News Australia

Telco industry failing small businesses, says Ombudsman

Problems with telecommunications services are costing many Australian small businesses time and money, according to the Telecommunications Industry Ombudsman's latest systemic investigation report.

The Ombudsman says a lack of communication and collaboration between telco operators and small businesses is leading to financial losses.

Issues include SMEs signing up for unsuitable plans, and delays in fixing faults with businesses lacking backup plans. 

According to the report, 'Addressing the causes of small business complaints', the proportion of complaints from small businesses to the Ombudsman has steadily increased since July 2016.

At the end of the last financial year that proportion was 14.7 per cent with more than 19,000 complaints from small businesses about their phone and internet services.

The Ombudsman says many of these complaints were complicated and had a significant impact on small businesses.

The report also revealed the financial impact of disrupted phone and internet services on some small businesses: between September 2019 and March 2020 small businesses made approximately 1,100 complaints involving claims for business loss compensation.

"We carried out this investigation before the devastating bushfires and COVID-19 pandemic brought unprecedented challenges to so many small businesses. While the top complaint issues reported to us by small businesses are so far unchanged, the impact of these issues may very well be greater," says Ombudsman Judi Jones.

"The relationship between small businesses and their providers is vital to the businesses' ongoing success. Any issues between a small business and their provider in the delivery of a service can have significant consequences.

"During government restrictions to curb the pandemic, many small businesses became solely reliant on phone and internet services to continue operating. As we begin the return to workplaces, our guidance around working together to fix faults and having a back-up plan may be crucial at this time."

The Ombudsman's report identified four recommendations for small businesses and telcos:

  1. Work together to identify the business's needs, consider suitable options, and focus on key relevant terms before an agreement is signed.
  2. Minimise the risks when connecting new services by checking the business address is correct, communicate expected connection timeframes or delays, and plan for enough connection time.
  3. Adopt a collaborative approach to fixing faults, and actively communicate with each other.
  4. Minimise financial loss by ensuring there is a back-up plan in place if phone or internet services are disrupted.

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