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Poor internet, phone deals costing small businesses significantly

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
05 June 2020 1 minute readShare
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Small businesses are regularly committing to phone and internet plans unsuitable for their needs, with breakdowns in communication when fixing faults on the rise, the Telecommunications Industry Ombudsman has warned. 

Since July 2016, the proportion of complaints from small businesses to the TIO has steadily increased, reaching 19,000 last year.

But, with the coronavirus crisis boosting reliability on internet and phone services, the ombudsman has warned that these figures could get much worse.

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“We carried out this investigation before the devastating bushfires and COVID-19 pandemic brought unprecedented challenges to so many small businesses,” Ombudsman Judi Jones said.

“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.”

 

The TIO’s investigation into the causes of last year’s complaints found that while small businesses may commit to products unsuitable for their needs, delayed connections have added to the problem.

The report also gave an insight into the financial impact of disrupted phone and internet services on small businesses, with some 1,100 complaints involving claims for business loss compensation lodged between September 2019 and March 2020.

“The relationship between small businesses and their providers is vital to the businesses’ ongoing success,” Ms Jones said.

“Any issues between a small business and their provider in the delivery of a service can have significant consequences.”

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She warned that while most small businesses rely on phone and internet services, many do not have a back-up plan in place if a fault interrupts the services.

She explained: “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.”

Responding to the TIO’s findings, the Australian Communications Consumer Action Network (ACCAN) said that one of the key takeaways for small businesses is the importance of having telco services that are fit for purpose.

“For example, if you’re looking at getting an NBN internet plan, make sure that you’re looking at business-grade plans that are designed with your needs in mind,” said ACCAN CEO Teresa Corbin.

Ms Corbin opined that it’s also really important for telcos to communicate consistently and clearly with their small business customers when issues occur.

“Small-business owners have to juggle countless tasks during the day, and don’t have the time to endlessly chase updates on faults.”

Top 10 complaints for small businesses in FY2019

  • No or delayed action by provider – 6,684 complaints (34%)
  • Service and equipment fees 5,835 complaints (30%)
  • No phone or internet service 3,506 complaints (18%)
  • Delay establishing a service 2,816 complaints (14%)
  • Intermittent service or drop-outs 1,795 complaints (9%)
  • Resolution agreed but not met 1,713 complaints (9%)
  • Misleading conduct when making a contract 1,033 complaints (5%)
  • Termination fee 980 complaints (5%)
  • Disconnection in error 885 complaints (5%)
  • Number problem due to connection, disconnection or transfer 841 complaints (4%)
Poor internet, phone deals costing small businesses significantly
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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