Optus reputation in ruins after outage, expert predicts billion-dollar cost

Marketing and technology experts have warned that the reputational damage caused by the Optus outage will be virtually impossible to repair. One of them says the company “hasn’t learned the lessons of the past” and made a “billion dollar mistake.”

Optus customers woke up on Wednesday morning to find they could not access their mobile and home internet services.

The major telecommunications company told customers it was investigating the matter, but otherwise remained silent for much of the morning.

A marketing expert said the outage could cause serious reputational damage “much worse than the actual outage itself” in terms of lost sales and the brand’s reputation.

Marketing expert Andrew Hughes from the Australian National University told NCA NewsWire that Optus had lost $1 billion in their brand valuation, according to a brand finance report.

‘BILLION-DOLLAR ERRORS’

“They’re billion-dollar mistakes, they really are,” Dr. Hughes said.

“It’s a huge loss… and it’s a competitive market, so they’ll probably struggle to get it all back.”

As Australians counted their pennies and noticed where each dollar went, Dr Hughes said they noticed the quality of service more.

“It’s more impactful because every dollar counts now, so when we pay good money for a phone plan and they do this to us and lie to us and we get hacked… it all feels like ‘hey, you know, treat me better, I’m giving you good money, why can’t I get good service?’” Dr. Hughes said.

The marketing expert predicts that Optus will have to prove to its customers through “transparent work” that the company is serious about changing its brand name.

But he thinks customers will find it hard to believe after the lack of communication from Optus on Wednesday.

‘A COMMUNICATION ERROR’

“You’re a technology company, you do communications, that’s your bread and butter,” Dr. Hughes said.

“It’s a communication error about a communication error… you can’t even send an email?”

Dr. Hughes said Optus had not learned the lessons of the past after the telecoms company suffered a worrying hack last year that saw the private data of millions of customers stolen.

While people were forgiving after the hack, customers are said to have felt the outage as a second blow.

“It was like, OK, you didn’t really learn, you just lied to us,” Dr. Hughes said.

‘You know that terrible feeling when you’ve been cheated on by someone you trusted. That’s the feeling those people had yesterday, that’s why there was so much anger.”

Dr. Hughes said the pressure is now on the federal government to step up after it launched an official inquiry Thursday into how it can better help major telecommunications providers during major disruptions.

‘PEOPLE HAVE HAD ENOUGH’

Finder technology expert Angus Kidman said there has been a big increase in the number of customers comparing other telecommunications brands since Wednesday’s outage.

“Obviously there are people who say I’ve had enough, it’s time to find something else,” he told NCA NewsWire.

While many people are looking for change, Mr Kidman said others would stay with Optus because they didn’t want to experience the frustration of changing providers.

Mr Kidman agreed that Optus’ messaging to customers is where most of the work needs to be done.

“It’s impossible to guarantee that a network will be up all the time, everywhere, because modern software networks are complex… but the lack of communication, the lack of willingness to put a time frame on it, hasn’t helped those people,” he said.

“The next set of communications, the next thing that’s said to customers, that’s going to be really critical. That is what will make the difference.”

CUSTOMERS ON THE FENCE

Outside the Optus store in Sydney’s CBD, customers were unsure whether to remain loyal to the telco.

Eileen Healy, a user of Amaysim – the virtual mobile network operated and owned by Optus – said she would consider other providers given the telco’s recent history of problems.

“In terms of reliability, I may have to switch to Belong or someone else that is as competitive as Amaysim because this is the second attack for Optus, they had the data breach a while ago,” she said.

“It gave me flashbacks to Vodafail. I was a Vodafone customer when they had that major outage and I haven’t gone back.”

On the issue of compensation for customers and businesses, Ms Healy said it came down to the cause of the outage, which continues to be disputed as a “deep network failure”.

Luca Villaflores was less hesitant to leave the telco as the outage was the “first time (he) experienced something like this”.

“It was an inconvenience. “I didn’t have access to my bank, my card, I had to withdraw money from an ATM… but I don’t think I would go as extreme as immediately switching to a competitor,” he said.

“I don’t think a company as big as Optus will fail because of something as big as an outbreak where there was no internet for 12 hours, but I think it will take a lot more.”

Miguel Hernandez and Karly Paine were ‘very tempted’ to ditch Optus after renting a rental car, losing signal for the entire trip and returning the car late, resulting in an extra day’s worth of charges.

“We had no GPS and I had to guess all the way back from Newcastle to Sydney – with a crying baby,” Ms Paine said.

“It would be nice to be compensated because who is going to cover the car and all the crap we went through last night,” Hernandez said.

The couple said Optus would have to “focus more on their customer service aspect and look after people a little better rather than just making money” if the company wanted to recover from the outage.

However, another customer, Angie Miller, was unfazed by Wednesday’s drama and insisted she would not dump the provider over what could be likened to an electricity or water outage.

“I wouldn’t change because it’s about the technology, and the technology can go wrong with any provider… that doesn’t happen,” she said.

Optus announced late on Thursday that it would compensate its consumer and small business customers with an additional 200GB of data to be activated by the end of the year.

READ MORE