Telstra looks at compo after its latest network outage

Telstra could be forced to compensate business customers after a network outage knocked out corporate ser­vices.

The outage was embarrassing for Telstra CEO Andy Penn. Picture: Hollie Adams

Telstra could be forced to compensate its business customers after its latest network outage knocked out banking, payments, healthcare and other corporate ser­vices.

With the latest network disruption — which was mostly felt across Victoria — taking the Telstra’s tally to seven in the space of four months, the telco’s enterprises and services group executive Brendon Riley admitted that the outage had had a significant impact on its customers.

“It didn’t just affect our clients but also their customers. It cut across a number of sectors and at the worst possible time,” Mr Riley said.

The timing of the outage was particularly painful for businesses trying to get their books in order on the final day of the financial year.

It was also embarrassing for Telstra chief executive Andy Penn as it came just a day after he committed to spend $250 million upgrading the telco’s increasingly problematic network.

Telstra has attributed the latest disruption to a network device misbehaving and affecting a part of the network that services business customers in Victoria. Mr Riley said the telco would carry out a deeper investigation to get to the root of the problem.

“We are still working through the specifics on the equipment that didn’t operate as it should have,” Mr Riley said yesterday.

Mr Riley added that the telco would now start engaging with its customers to work out how to best compensate them for their trouble.

“We have a strong relationship management framework in place,” he told The Weekend Australian.

“The outage had different impacts on our clients, some of which have continued to flow into today (Friday).

“We will handle each of the conversations (with our clients) on an individual basis.”

Unlike the six previous dropouts, this outage has predominantly affected businesses, disrupting back office functions across private and public sector entities. However, this in turn affected thousands of customers across those businesses.

The fixed-line outage, which began about 2pm on Thursday, took out National Australia Bank and ME Bank’s internet banking. Jetstar’s check-in system and Myer’s Eftpos network were also affected.

Several Jetstar customers were forced to stay in hotels after delays plagued the airline, while the Royal District Nursing Service was also forced to cancel in-home appointments.

“This has affected our visits to many of our clients’ homes, many of whom are elderly,” a spokesman said.

Other business and enterprise customers across the state — including Medibank, Reece Plumbing, Channel 31, Virgin Active, Monash University and The Royal Women’s Hospital — were affected. Labor’s campaign headquar­ters and electorate offices were also affected.

Mr Riley played down concerns that a litany of disruptions could potentially lead to a reshuffle in senior ranks, saying that the immediate focus of the management was to stem the frequency of the outages and the impact it was having on Telstra’s brand.

“We have to be open to different approaches and options on how we can do things better,” he said.

“We are investing in the core network and we are re-evaluating the relationship we have with our vendor partners.”

Mr Riley conceded that Thursday’s outage was not a good look for a company that was trying to revive the public’s confidence in the Telstra brand.

“We are making some progress but obviously the latest outage doesn’t help,” he said.

While Telstra’s network woes have taken a toll in the telco’s customer satisfaction ratings and is likely to hit bonus payments of executives, there is still little indication on how many customers the telco is set to lose.

Morgans analyst Nick Harris said it was unlikely that the outages would have an immediate impact on Telstra’s customer base but added that the telco’s luck was bound to run out.

“A lot of people are still on contracts so that minimises the damage,” Mr Harris said.

“Telstra picked up a lot of market share at the expense of its rivals in recent years. It got lucky, but that’s going to run out at some time.”