The crazy deals in tangled Telstra web

IMAGINE having a mobile for 16 months and never paying for a single call? This happened to one disbelieving Telstra customer when he changed from prepaid to postpaid billing.

Like a tangle of knotted cables behind the desk, Telstra’s archaic and complex systems created a lucky loophole of freebies. Somehow the different divisions of billing didn’t cross-reference the other and his request was not properly executed. Yet the service continued, without a single bill.

“I couldn’t recharge phone credit or check the calls I’d made but I never had to pay a bill,” the customer said.

The free call party only ended when 2G was shut in December 2016 and the service loophole closed.

Telstra’s complexities have created problems for decades.

For unlucky customers, it’s meant nightmare service and bill shock. For investors, it’s meant billions of dollars in potential revenue squandered.

It’s the reason Telstra customers calling with problems were transferred several times before their queries could be resolved. The latest patch-up for that has been to have a single call centre operator handle the query, and now the operator must jump between operating systems — sometimes three or four of them — in order to resolve the call.

Telstra boss Andy Penn this week called the death knell on these so-called “legacy systems”, giving customers and investors hope the company’s rusted-on tradition of getting tangled in red tape was coming to an end.

“We have to take a bold step,” Penn said. “We have to leave the past behind.”

A key pillar is purging all but 20 of the 1800 plans and products that the company currently offers.

Telstra will spend $50 million sacking 9500 people involved in operating these archaic arms of the business, mostly managers and executives.

Two out of the company’s four layers of management will be purged while 1500 new jobs will be created.

In its place will be simple plans offering unlimited data with self-service problem-solving and product changes. Users will update their own systems via apps. Think Apple: when was the last time you spoke to a person to fix a problem?

Telstra’s ambitious bid for survival comes in the face of competition in the mobile market that Penn describes as “very intense and challenging”.

And the heat will ramp up in October when TPG sets up a fourth mobile phone network.

But some doubt Telstra is well positioned to make the necessary changes.

“We are sceptical about Telstra’s ability to deliver on its increased productivity targets,” Citi analyst David Kaynes said.