Optus chief calls for better customer service

Optus has spoken out against the poor customer service delivered by our biggest telecoms, saying they are even worse than the banks.

Kevin Russell, chief of Optus, owned by Singapore Telecommunications (ASX: SGT) says the level of customer complaints to the industry ombudsman reached “stratospheric” levels in recent years. Even compared to our peers, Australian telecommunications companies lag behind in delivering a good experience. “The standard of service in Australia relative to the standard of service in the UK just seems to have gone backwards” Mr Russell said.

As more and more competitors enter the Australian market, Russell added that Telstra (ASX: TLS), Optus and Vodaphone, owned by Hutchison Telecommunications (ASX: HTA), need to lift the standard of service, otherwise their customers will not be willing to do business with them.

Recently Optus, Telstra and TPG (ASX: TPM) forked out more than $2 billion to expand their wireless data and communication networks. However, the companies may find it difficult to get a return on their investment because the current trend for revenues is pointing downwards and international competitors such as Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL) are posing a real threat down under.

Mr Russell told the Australia Israel Chamber of Commerce that, “my simple logic is if you are going to ask people to pay a bit more, your service better be good. Happy customers will pay a bit more and my experience tells me that unhappy customers will not pay a bit more”.

This comes on the back of Telstra managing director David Thodey announcing that his company will now be focusing on improving retention through excellent customer service. His plan is to give staff cash rewards when they are able to get positive feedback for the company.

Foolish takeaway

Australia’s telecommunications industry has gone from strength to strength in recent times. While there are good businesses and large dividends to be had, investors should make sure that the past fortnight’s drop in prices isn’t the start of a new trend.

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Motley Fool contributor Owen Raszkiewicz does not have any financial interests.

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