Can the telcos turn over a new leaf?

Australian telco executives are keen to make amends for the industry's past sins but is this a genuine change of heart or just a case of adjusting the narrative to suit a changing landscape?

It’s a bird. It’s a plane. No, it’s Australia’s top telco execs looking to save us from their own companies.

Terrified of mobile data bill shock? Well, fear not, says Optus’ chief country officer, Kevin Russell. The telco will cut short some of its profits just so its customers can enjoy its service without hesitation.

Afraid the government’s latest mobile data roaming regulations don’t go far enough? Relax, says Vodafone’s Bill Morrow. The company will go above and beyond the government’s mandate to make sure that when you're abroad, you can roam the internet on the cheap.

The ambition on display does underscores an interesting new trend in the Australian telco industry. It seems telcos, long criticised for tormenting hapless customers, now want to champion their cause. They want to be... the ‘good guy’.

This new mantra is a welcome change of pace from a sector that once found confusing customers into paying more to be a sustainable business model. 

But has the industry really turned over a new leaf, or is this simply a case of adjusting the narrative to suit a changing landscape? It’s a complex question and there are a couple of reasons that may explain the sector's new-found altruism.

The first revolves around what could be deemed the "kryptonite" of the telco sector - a negative Net Promoter Score (NPS).

To debunk the jargon: a NPS indicates how likely a customer is to recommend a brand to their family and friends. A negative NPS score indicates the contrary - the likelihood of a customer complaining about a service in public.

According to Optus’ Kevin Russell, all three major telcos currently sit in negative NPS territory. As a result, all of them are trying to claw their way back into the hearts of consumers. The idea is that as the network battle starts to level out and metro coverage really becomes anyone’s game, consumers will choose their provider based on how much they like its brand.

An earlier study by telco consumer experience company Amdocs reinforces this point. It not only put telcos in the APAC region as some of the most hated in the world, but - in line with common sense - also revealed that users will pay more for companies they adore.

Independent telco analyst, Chris Coughlan also contends that Vodafone and Optus may be following Telstra’s lead on this issue. He says that Telstra CEO David Thodey has worked hard over the past couple of year to make NPS a mainstream KPI for the telco and its team. 

That might explain why the phrase features prominently in Telstra's 2012 annual report (pdf).

Coughlan says that Thodey's strategy has paid dividends, with the telco increasing both its user numbers and average revenue per user figures over the past couple of years. Vodafone and Optus may be hoping that a similar strategy provides a similar result.

Coughlan also reckons that the new Telecommunications Consumer Protections code (TCP) may also have played a part in transforming mindset of the industry. The code was introduced last September, and it forced the telcos to eliminate weasel words from their plans and better engage with consumers to ensure fairness within the industry.

Some may argue, however, that the TCP code really worked out to be a win for the industry, as the lavish timelines set out by the Australian Media and Communications Authority (ACMA) made it easy for the telcos to claim a PR win by introducing tools like a mandatory data usage notification system well before the given deadline.

The real challenge for the industry lies in this idea of balancing positive consumer sentiment with profits. In this sense, the telcos are really striving to be like Apple and Google - companies that are well and truly loved by consumers but still reap mega bucks from them.

The funny thing is that even Apple and Google have been known to swindle Australian shoppers. Just look at the IT price inquiry and the amount Australians pay for movies and music on their services in contrast to consumers in the US. Despite this, Apple fans - some of the most devout brand advocates in the world - can’t help but do the company’s marketing for it.

Presumably this is exactly the sort of fervour that telcos are hoping to elicit from their customers. However, that will require them to break their addiction to short-term profits and instil a cultural change that puts customer first and doesn’t see them simply as cash cows.

Winning customers might be easy but holding on to them is becoming increasingly difficult. If the telcos want to win back the public they need to maintain their current course, deliver on everything that has been promised and perhaps even surprise a fairly cynical Australian public as to how committed they are to their goal.

If the telco industry was founded on the basis of being fair to consumers then problems like mobile data bill shock and excessive international roaming charges wouldn't exist in the first place. So rather than just repair the damage, perhaps the telcos should be looking for ways to reward their customers.

For instance, how about an unmetered mobile data ‘happy hour’ or carrying over any unused data to a customers’ data allowance for the following month?

Implementing these kinds of initiatives, now, that would be truly heroic.

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