GCN 0.00% 0.7¢ goconnect limited


  1. 36 Posts.
    GCN desparately need a swift uptake with this new technology but as always the hype doesn't match the reality it would appear .Have a look at this article from crikey dot com and I'm hearing the same from acquentinces how also have the phones....lots of legal issues and dropoffs ahead .

    August 15, 2003

    Business Index
    Virgin Blue's sexist ways
    Hutchison hangs up on 3 customers
    Shock resignation: BRW v ASIC chairman
    Exclusive: Elliott book bombshell
    Are you sick to death of Qantas?
    Seek and the future of Fairfax
    Gunns hits $1b as EGM approaches
    RMIT: textbook management failure
    Crikey at the McBank AGM
    Huge doubts over Gold Coast Indy
    Voodoo economics of major events
    JF Smith on the Ansett scandal
    Qantas crisis a Fairfax myth
    How good is BHP Petroleum?
    Kewell: The business of sports agents
    The Macquaire fee machine
    Given their April launch of Australia's first 'third generation' (3G) mobile telephone offering, Hutchison's recently announced half-year results were particularly keenly watched by the market.
    Although the headline $129 million loss inspired no market confidence, evidenced by the 13.5% share price fall over the next two days, what did surprise the market was the better than expected number of customers Hutchison had attracted to its '3' brand.

    Starting from a base of zero, the company announced that in less than four months, they had acquired an impressive 43,500 '3' customers.

    Given the multi-billion dollar investment by parent company Hutchison Whampoa and the risks implicit with being the market leader in such a new technology, the result seemed to cast Hutchison's struggling business model in a more positive light, even though break-even was still forecast for a distant 2006.

    Financials and forecasts aside, I was particularly interested in Hutchison's result, because I was one of the first '3' customers in Australia. But folks, let me warn you, it has not been a pleasant experience. So while Hutchison is basking in the good 'quantity' news, I have some sobering commentary about the 'quality' of the '3' service.

    The 3 journey begins. . . and heads downhill fast

    The initial excitement of having a '3' phone (the NEC e606 handset) subsided when Hutchison came out with their 'Family and Friends' offer which provided a 50% discount for your second 3G phone. Given my girlfriend and I had just paid full price a couple of days prior ($800-odd each over 24 months), this did not seem like a good way to reward early adopters. Unlike other companies who recognise the value of such customers (such as Microsoft with their Xbox), requests for a retrospective discount fell on deaf and slightly patronising ears.

    It was not long before the terrible quality of the phone service became the more pressing issue. Many calls were dropping out, there were constant busy signals and the voicemail did not work. Given my understanding of new technologies, I refrained from ringing up to complain, as I had expected teething problems. Friends who did call however, related stories of rude (and sometimes indecipherable) customer service people who could little else than, 'it's a new network which is improving all the time'. Based in India, the call centre staff would enquire where problems were being experienced even though they had no idea where places like George St or the Opera House were.

    I battled on, trying to ignore that around 15% of my calls were dropping out. It did not seem so bad given two friends who had also purchased 3 phones were experiencing drop outs on almost every call (that's right 80-90%). When one friend found he could not even hang up without taking out the battery, he made a series of complaints to '3 Customer Care'. Even with a clearly unusable phone, 3 Customer Who Cares were not sympathetic. Stronger insistence for the problem to be resolved was met with, "Take your complaints to the Telecommunication Industry Ombudsman".

    It was only after reaching a more reasonable 3 representative that he was instructed to get a replacement NEC e606 handset. Staff at the store who provided the replacement acknowledged that there was a problem with "old software" on some NEC e606's, which effectively made the phones unworkable.

    By now, my girlfriend and I could not speak to one another for 5 minutes on our 3 phones without 3-4 dropouts. She made several complaints and after many heated exchanges with rude and un-empowered call centre staff, was finally offered a replacement handset. Now the new phone 'only' cuts out between 15 and 30% of the time.

    My own 3 complaints odyssey begins in earnest

    It was about this time I rang up to complain as my call dropout rate of around 30% was unbearable. I was told my complaint had been logged and forwarded to the technical team. They promised to call me back as soon as possible. Several days later I called back. Nothing had progressed, my phone was deteriorating, and again they promised to call me back within 24 hours with an update. Two days later I called them back. Nothing new but the 3 representative had an idea she would mark my case 'urgent'.

    To cut a long story short, this charade went on for several weeks, with promise after promise being made and subsequently broken. Finally after over a month, a technician called me. He conducted a simple 10-minute diagnosis and surprise, surprise, said I had old software and needed to get a new handset.

    So even though I suspected this was the problem from the start, it eventually took me almost two months to have my broken handset replaced, given there were further delays (and more broken promises) in 3 getting the new phone to me.

    And guess what. It still does not work properly. I have not been able to bring myself to call 3 to complain again. The process is simply too scarring and the 3 representatives appear incapable of doing anything to help.

    One person's story of a bad customer experience is hardly scintillating stuff, so I started asking around.

    Including myself, there were 3 people I knew who had 3 phones all three had to have their NEC e606 handsets replaced after high drop-outs and unhelpful, adversarial encounters with 3 Customer Care.

    Then I was forwarded an email from a Crikey subscriber who had purchased five 3 phones (worth $4000). His experience was almost a carbon copy of the one I just described. After several months of "terrible, terrible" service and multiple calls every week to 3 care, and only after threats of complaining to the Ombudsman and references to breaches of the Trade Practices Act, this exasperated customer managed to get a refund.

    And yes, as he confirmed, "The NEC 606 handsets have software bugs admitted to me by their techs."

    It gets worse. The subscriber also wrote;

    "We recommended ten friends go to them and all without exception have massive problems with call dropouts and terrible service when trying to report the faults; half are going back to their old providers."

    His final comment after hearing about Hutchison's customer numbers was;

    "As you know Crikey, numbers are deceiving. This is the worst, worst company service I have ever had or my wife or partners, in my 42 years of life."

    As you can see dear readers, a definite trend was emerging. To (somewhat) balance the criticism, I did receive one email from a more satisfied 3 customer who wrote, "while call dropouts are higher than your traditional 2.5G network, it's made up for by the call costs. Telstra was billing me to the tune of around $700 a month, and 3 is static at $200 a month. And I make more calls!"

    Certainly no one is complaining about the cheap price of just 15c per 30 seconds and the cost capping, which has lured many customers away from existing providers.

    I emailed the spin-doctors at Hutchison asking questions about the apparently dodgy phones, but in the meantime, at their results briefing, their CEO Kevin Russell, made the following comment;

    "As of this week, 3 is now facing the "nice to have" challenge that demand has exceeded supply and we have almost sold out of NEC e606 stock."

    Well now I was really interested. If there was a widespread problem with the NEC e606 handset, stocks were not down because demand was so strong it was because they were being forced to replace so many of them!

    I emailed the spinners another couple of times until I finally received this response.

    To: [email protected],
    Subject: FW: Re: FW: enquiry
    Date: Mon, 11 Aug 2003 18:39:43 +1000

    Dear Justin,

    I refer to your email dated 4th August 2003.

    In regards to the questions numbered 1 and 3- As with all mobile carriers specific commercial information about product lines is not discussed publicly. We have been very pleased with the success of the NEC e606, which has been the biggest selling 3G phone in the market.

    Question 2 mentions a "technical glitch"- I am not sure what you are referring to. If a 3 customer experiences any problems using the service then our customer care department deals with them directly on a case-by-case basis. We have exchanged some handsets, on the basis that there is a genuine belief by the customer that there is a fault in the handset. The proportion of customers who have sought a replacement handset is low.

    To date we have had a very good response from our customer contact initiatives and find that most customers are accepting of the fact that in the initial stages of our network implementation and optimization there are areas in which we need to improve. We are putting every effort into ensuring that improvement happens as quickly as possible. In fact, we are building two new base stations per week for the rest of this year and further expansion is planned in 2004.


    Karen Watson
    Public Affairs Co-ordinator
    Hutchison Telecommunications Australia Limited


    This sounded like ducking and weaving (and what about the spin, on the customer's "genuine belief" the handsets were faulty!) so I persisted with some investigations. Coincidentally I was asked to attend a focus group for 3 customers. This was commissioned by Optus - where, for disclosure purposes I once worked, although I certainly do not recall the experience with great fondness - but conducted by an external research company. At this meeting I had the opportunity to speak to another few 3 customers.

    And surprise, surprise (again), each expressed their extreme dissatisfaction with 3. Just one person was not overly vehement in his criticism, although he still regretted his decision to join 3. Another two were vitriolic in their '3-rage'. One person took the trouble to email her main complaints to me over 500 words! And yes, the problems were another carbon copy of the many issues described above such as voice calls constantly dropping out, voicemail constantly playing up, engaged signals, terrible battery life and simply being unable to make outgoing calls.

    One of her lines caught my eye;

    "I know 6 other people with '3' phones and everyone seems to have problems. This is my only phone so I have persevered but some of my friends have put their '3' phones out to pasture and have gone back to using their normal phones."

    Her only amusement came after finally receiving a voice message from 3 Customer Care asking her to call them back as they had not been able to contact her on her 3 phone for several weeks.

    There are also a handful of Hutchison customer complaints on consumer watch-dog site Not Good Enough and various 3G chat sites, but perhaps the official measure of 3's customer (dis)satisfaction will be when the Telecommunication Industry Ombudsman releases the next quarterly telco complaint statistics. Otherwise, apart from a slight jab by the Sydney Morning Herald (see here ), the media have not reported any major problems.

    Where to with 3 for me?

    A couple of weeks ago I rang 3 to ask if they could refund the amount I had paid on my faulty phone. I explained at length the atrocious experience I had endured, the fact I relied on my phone for my work and things such as share trading, and that although I had a case for claiming compensation for various other losses (not least the embarrassment of appearing unprofessional), not to mention refunding the cost of my calls, all I wanted was a refund for the cost of the handset to date (around $100).

    The 3 representative basically said they could not do that. I persisted. I reiterated my extreme dissatisfaction and explained that I could not accept her summary dismissal of my request. I asked her to refer it to someone more senior in the organisation, as I know call centre tactics are to deny such requests on first airing regardless of the situation.

    She wavered. I was polite but persistent. She put me on hold. She came back and said that she would forward my complaint to the equivalent of the call centre manager. I felt better. She added that it was marked 'urgent'. A cold shudder ran down my spine. As I prepared to finish the conversation, she promised that someone would call me back very shortly. Another shudder.

    That was around 2 weeks ago and I have not heard a thing since.

    The final word of this 3 marathon

    Hutchison's spin-doctors will quickly discount this stinging experience as a one-off. However given that 95% of the 20+ plus 3 customers I have encountered share my deeply disappointing experience, perhaps they would be well advised to reflect on the facts as opposed to resorting to spin.

    All I can deduce from my experience and research is a systemic, widespread and potentially terminal case of 3 customer dissatisfaction. Not only is it the extent of the dissatisfaction but the strength with which it is held. One unhappy 3 customer told me that legal advice suggested that the case for class action to demand full refunds was strong. A different 3 customer suggested starting some "anti-3 activism".

    Clearly, Hutchison have some issues. But relying on the oft-repeated excuse about early stage 'teething problems' wears thin extremely quickly (did they simply launch prematurely?) and is of no consolation to deeply frustrated customers - customers that the market deserves to know about.

    No one wants Hutchison to fail given the duopolistic nature of the mobile phone industry, but hopefully this serves as an early warning to the company. They can protect and even build their credibility by admitting to any problems, fixing them and compensating those who suffered. Anything short of this is tantamount to hanging up on their (potentially) most important customers.

    And they should do it before droves of the 43,500 customers hang up on them.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.