Following the publication of an audit report of customer billing complaints which had established that Telstra had continuously overcharged a section of its customers for about six years, Moses, (2012a) explains that the company immediately agreed to refund its customers whatever they had been overcharged and further committed to undertake measures to prevent multiple charging for international roaming services
In implementing the two corrective measures mentioned above, the company was faced with three major unique problems and which had different cost implications for Telstra.
To begin with the first implication, Moses (2012b) explains that Telstra needs to refund approximately about $30 million to its customers who had been overcharged. Ordinarily, this is a substantial amount of money which could have been put into different uses by the company to enhance its growth or to improve its service delivery standards.
Secondly, as pointed out by Moses (2012b) and Ramli (2013), Telstra needed to expend some considerable amount of time to enable it to effectively undertake and complete the processes of locating previous customers not currently using Telstra’s services as well as correcting the large number of inaccurate bills before it could start and continue refunding the overcharged customers.
The cost associated with this implication is that the many man hours and by extension, the employees which the company had been forced by the situation at time to allocate to facilitate the timely completion of these two important processes would have been used to achieve other company goals.
As result of this therefore, Telstra ended up bearing the cost of paying for labor that did not directly contribute to enabling the company to meet its various goals.
Thirdly, as reported by McGrath (2013), the industry regulator had ordered investigations on Telstra’s billing practices to be instituted with no delay following the findings of the audit report. The cost implication for this was that Telstra was faced with the immediate necessity to undertake damage control measures to safeguard the company’s reputation in the telecommunications industry.
Specifically, the cost the company incurred with respect to this implication was increased expenditure on marketing its international roaming service offering in a market that was still coming to terms with the revealing findings of the audit report on Telstra’s billing issues.
The nature of the revelations painted the company in negative light within a market that can be best described as apprehensive of continuing to use the international roaming service offered by Telstra.
Finally as pointed out by Moses (2012b), Telstra’s unique case led to the drafting of a new additional standard relating to billing regulations for international mobile roaming services which would be enforced in the whole telecommunication industry in Australia.
Enforcement of the new standard require all the telecommunication service companies to provide their customers with correct information on the cost of their services and to develop tools which their customers are able to use to manage the costs.
The cost implication linked to the introduction of this standard is that all the providers including Telstra will end up spending more to ensure compliance.
Points for the Power Point Slide
Introduction
- Contextualize Telstra’s roaming services
Costs and Implications involved for Telstra
- Large amount of money to be spent on refunds (Approximately $30 million)
- Refund process will take a lot of time/Labor-locating previous customers and correcting the many inaccurate bills
- Reputation of Telstra within the industry at stake-Additional cost in marketing due to the company being put under investigations by the regulator
- Introduction of a new standard on international roaming services in the industry-All providers will spend more to ensure compliance
References
Moses, A. (2012). Telstra repays $30 million after overcharging for global roaming. Web.
Moses, A. (2012). New rules to stop $150k phone bill surprises. Web.
McGrath, P. (2013). Communications regulator ACMA warns Telstra after it overcharged customers for data use. Web.
Ramli, D. (2013). Telstra escapes with ACMA warning for overcharging travellers. Web.