Optus tops distrust rankings as telcos trail social media on scepticism
Optus is the most distrusted telco brand in October after its nationwide outage, with telcos second only to social media for distrust
Optus was Australia’s most distrusted brand in October following its fatal outage, with the telco category the second most distrusted industry behind social media, according to new Roy Morgan research.
The Roy Morgan Risk Monitor data tracked the nine largest telecommunications companies to reveal that Optus was not only the most distrusted telco brand, but its recent fatal outage had significantly impacted the brand’s recovery work to win back consumer trust following the 2022 data breach.
The telco report revealed Optus and Telstra remain “firmly entrenched” in the number one and two most distrusted telco positions, followed by Dodo and Huawei. It also found that distrust in Optus is 23 per cent higher among the business community than within the general population.
While Optus has previously ranked as the fourth most distrusted brand nationally, behind Woolworths, Coles and Meta/Facebook, the October research suggests the brand’s overall ranking may suffer with the latest outage compounding the brand’s reputational damage.
“Consumers aren’t judging each incident separately anymore, they’re experiencing a single, coherent emotional response. And until that neural network is rewired, any new misstep will trigger the same cascade,” said Roy Morgan chief executive Michele Levine.
The report revealed the most trusted telco brands are Aussie Broadband, Amaysim, Vodafone and TPG. The findings suggest Vodafone and TPG can leverage this sentiment when they relaunch the Vodafone brand next year in a bid to reclaim market share and take on Telstra’s dominant market leader stance.
While the report adds to Optus’ woes, there is some positive news for the beleaguered telco with its Amaysim brand remaining untouched by the fallout.
Ms Levine said the results suggest consumers “don’t associate the two brands”. “Amaysim has lifted from a low of 6 per cent [market share] in June 22 to 14 per cent [market share]. The message is simple: customers aren’t abandoning the network — they’re abandoning the Optus brand.
“If we look back five years, Optus was gaining market share in both prepaid and post-paid mobile space, but as soon as the data breach occurred in September 2022, this trend reversed, and Optus has since lost all that it gained. Optus’ brand damage is now showing up clearly in the market share numbers. Pre-paid has fallen from 19 per cent to 11 per cent, and post-paid has slipped from 33 per cent to 27 per cent. The falls were steepest immediately after the data breach,” said Mr Levine.
The report reveals the telco category is the second most distrusted industry in the country, only the social media industry attracts more distrust from Australians. Telcos are more distrusted than supermarkets, mining and petroleum, government and even gambling categories.
“Australians are in a distrust era. Telcos start from a deficit, not a blank slate,” said Ms Levine.
Telecommunications analyst Paul Budde said that while the Optus brand has taken a big hit through the media and government hearings, the actual impact on market share and customer churn was “not that much”.
“People are not stupid, they know what’s happening but they’ve probably already tried several providers and they think [the telcos] are all the same, so they tend to stick where they are.
“Most people are on long contracts, and the people who are on prepaid always go for the cheapest. They’re not not bothered by what is going on, as it’s not part of their decision making process.
“It will, of course, have a bit of an effect, but only by people who have a very high moral conscience. The majority of people are so used to the capitalistic approach, whether it’s the banks, or the airlines or the telcos, they are a bit numb by all the scandals and all the things that are happening so most people just go on with their lives, in that respect.”
Mr Budde believes the bigger challenge for the telcos is balancing dwindling revenues with the costs required to maintain infrastructure against an increasingly regulated category.
“If you look over the next five to ten years, there will be some real difficulties for telcos. I think we will start to see changes in the way the telcos are going to structure themselves more and more like networks. At the same time they will depend more on government and national policies.
“Every other day there’s another regulation. They have regulation around triple zero calls, cyber security, protecting women around domestic violence, social media spam…There’s regulation on regulation. I did a calculation a year or two ago and there are more than twenty-five different regulations on telcos. At a certain stage, as a country, we need to take responsibility as these infrastructures are critical for the future of our country and not just important for the telcos themselves,” said Mr Budde.
