When embattled Australian mobile operator, Vodafone Australia (VHA) experienced major network issues late last year its CEO told the market it was due to ‘temporary software bugs’. When its customers rallied behind one Adam Brimo who set up a website to vent his frustration he was inundated with like-minded customers and a legal firm proposing a class action that now has 22,000 in support.
That same CEO, Nigel Dews, seemed to go into denial about the real issues behind the networks failure to cope with the volume of data smartphones were generating and the lack of forward planning to counteract the expected demand. It seems the issues stemmed back to the merger of Vodafone Australia and ‘3’ which, in retrospect, may not have been managed as well as it could have been.
All the while VHA was being hammered by the press, disgruntled customers were hitting its call centers, the regulator and consumer groups were voicing concerns, the real reasons were not disclosed. Insiders claim that a concerted effort was made to reduce costs after the merger and Vodafone engineering staff were replaced with an outsourced team from Ericsson. The increasing demand for data services over voice meant that base stations had to be reconfigured to trade channels.
However, just when Vodafone thought things couldn’t get worse, they did. This time a security breach put customer billing and call records on a publicly accessible website protected only by passwords that were changed monthly, reportedly via a system used by its dealer network. Early reports claimed that private customer information, including credit card details, were compromised, but Vodafone denied this, yet would not confirm whether it was able to determine which customers were affected.
The company also decided to adopt 3’s direct debit system for prepaid customers and was aiming to provide the same services and plans to prepaid customers on direct debit that postpaid customers enjoy. It was reportedly this system that was responsible for the breaches of customer data security.
During the recent floods that ravaged the northern state of Queensland, VHA hit the headlines again as its network was the worst affected with over 200 sites reportedly going down allegedly because of insufficient battery capacity in their base stations.
Just when it looked like things could not get worse, VHA prepaid customers this week discovered they were unable to recharge their credit and the beleaguered telco was forced to give all prepaid customers with no credit free national calls and texts.
Now, some five months after the first issues arose, the company has written to customers admitting it was too slow to upgrade its network and pleading for a second chance. Its CEO has been forced to record a video via its website stating that VHA was “truly sorry” to have “let down” some of its customers and that it had ironed out earlier technical issues and fast-tracked capacity upgrades.
Too little, too late? Probably. It is highly unlikely the customers that have already fled will be drawn back by such a late plea for forgiveness and unless VHA can come up with some really good reasons the remainder, on contract, will probably jump ship at the first opportunity.
However, this week’s news really does put ‘icing on the cake’ for what must rate as one of the mobile industry’s great meltdowns. Huawei has been selected to replace Vodafone’s entire 2G/3G network with its SingleRAN solution, which can accommodate 2G, 3G and LTE technologies in a single base station that include 42Mbps HSPA+ at 850MHz, to address Vodafone’s network capacity issues. Incumbent suppliers Ericsson and NSN appear to have been banished.
I can only wonder how something like this could happen in 2011. What is the cost of a failing network, a prepaid to-pup system that stops working, a potentially long legal wrangle that will almost certainly involve settlements of some magnitude and why is the current management allowed to continue after so many bungles? Maybe Australia is far enough away from HQ that the ‘mud’ won’t stick. Doubtful.
We can only hope that, in due course, someone writes up a case study so that every other mobile operator in the world can avoid a similar fate.