Telstra’s network woes could lead to cheaper broadband
It’s safe to say that the past few months haven’t been exactly what Telstra would have hoped. Three outages — two national in early February and just recently that affected users nationwide, and one smaller outage affecting only prepaid mobile users in early March — have shaken customer’s faith in the nation’s largest telecommunications provider.
When Telstra suffered its first outage in February, it quickly corrected the problem, attributed to human error relating to its network infrastructure, and compensated users with a “free” data day on the 14th of February. Some users went the whole hog, downloading hundreds of gigabytes of data for nothing, something that Telstra would usually charge hundreds of dollars for. The more recent outage on the 17 March were apparently due to switching errors relating to international roaming customers, and again Telstra’s promising a free data Sunday, this time to take place on the 3rd of April. Customers affected by the prepaid outage will be credited with 200MB of bonus data, according to Telstra.
I suspect that the second free data day won’t generate anywhere near as much crazy usage as the previous offer, simply because it’s no longer a novelty on the Telstra network. Indeed, for many it may be an annoyance, as additional usage floods the limited mobile broadband spectrum on the day.
For years, Telstra’s sold itself as the “leading” mobile network based both on the ubiquity of its coverage and the strength of its technology. It’s hard to argue with either proposition, especially if you travel regionally where, while they’re improving, competitors Vodafone and Optus haven’t had anywhere as much coverage or speed. Telstra was by far the first telco to offer regional 4G services, something that Vodafone is only now fully rolling out.
With three outages in less than two months, you might think that this is overall a bad thing for mobile broadband in Australia. I’m not so sure that it is.
Not that an outage is, by itself a good thing; the loss of telecommunications services in the modern age is a serious problem in and of itself, and no doubt there’s serious work being done at Telstra to ensure these kinds of problems are unlikely to happen again. I say unlikely, because telecommunications networks are very complex matters and no provider will ever quite guarantee 100 percent coverage all of the time.
Here’s the upside, however. For the longest time, Telstra’s sold itself as the premier network on coverage, speed and technology terms, but it’s always charged a premium on that basis. While other providers have got on board offering unlimited calls and texts packages, you’ll only find those for smartphones with Telstra on their highest tier packages. Likewise, Telstra’s mobile data remains the most expensive of the big three network providers by a fair margin whether you’re a postpaid contract or prepaid customer.
That argument stands up fine as long as Telstra can deliver the goods, but as the recent outages have shown, that argument looks a little shaky right now. Undoubtedly some previously loyal Telstra customers may well look to shift to other providers to save money if they’re not sure that Telstra can provide the same level of quality assurance it once did.
So how does Telstra possibly contend with that, especially if it starts to lose actual customers, but even if it only thinks it might? Aside from one-off “free data days” — and as I mentioned previously, I suspect they’ll have less allure the more Telstra has to use them — it can do so by lowering prices competitively, or increasing data allowances on plans. That puts it on a more level footing with competing telcos with the advantages of its network, which does still offer significant advantages for a reasonably large proportion of the population.
That’s a solid win if you’re a Telstra customer, and, by increasing competition via either price cuts or data boosts, it even helps out if you’re a customer of Optus, Vodafone, or one of their virtual network partners such as amaysim, because it’ll force them to compete even more vociferously.