Canada’s telecom ombudsman has had to beef up staff to handle an ever-increasing number of disputes over phone bills, wireless contracts and Internet services.
But at least one Canadian telecom – Telus (TSX:T) – appears to be doing something right when it comes to reducing customer frustration and churn.
The Commissioner for Complaints for the Telecommunications Services (CCTS) has seen an increase in consumer complaints, forcing it to hire more staff in order to resolve outstanding disputes.
The bulk of the 13,692 complaints it received for 2012-2013 were over wireless service (11,663), while Internet service complaints numbered 3,758, according to its annual report.
BCE Inc. (TSX:BCE) generated the most complaints (3,912), with Rogers Communications Inc. (TSX:RCI) coming a close second (3,803). Fido – a Rogers subsidiary – generated the third most complaints in Canada (998).
Telus (TSX:T) generated 883 complaints, and its subsidiary, Koodo, generated 199.
According to Telus, complaints against the company to the CCTS have dropped by 27% since the previous reporting period.
Those numbers are of interest to investors, according to Dvai Ghose, head of research for Canaccord Genuity, who said the stats make Telus look good, compared with Bell and Rogers.
“While all incumbents may be tainted by the same brush when it comes to regulators, in our view Telus has been the most consumer friendly incumbent and this is clearly reflected in their industry low churn and industry high lifetime revenue per subscriber,” he writes.
“Telus is the only wireless incumbent that enjoyed a (year-over-year) decline in customer complaints and has the highest customer loyalty.
“Given that the incumbent cost of acquiring a wireless subscriber is around $400, low churn and high lifetime revenue per subscriber are essential if carriers want to generate strong net subscriber growth and sustainably high margins.”
The CCTS was set up in 2007-2008 by the Canadian Radio-television and Telecommunications Commission to field complaints generated by Canadian telecoms and Internet companies.
Since it was formed, the CCTS saw complaints rise from 2,226 in 2007-2008 to 13,692 for 2012-2013.
The top complaint – 11% – is over billing issues, with loss of service or repair issues second at 10.8%.
The third top complaint was over 30-day cancellation charges. Even when customers cancel a phone or Internet service because they are not happy with the service, many still have to pay for a full month of service they don’t receive. Not surprisingly, having to continue to pay for a service that was cancelled in the first place because it was bad tends to aggravate consumers even more.
One of the many complaints the CCTS receives is over phone and Internet companies referring disputed bills to collection agencies. In one case, a company referred a customer’s outstanding bill to a collection agency even while that company was involved with the CCTS in a dispute resolution process.
Bell ranked highest of the companies with complaints over disputed bills being referred to collection agencies – generating 30.4% of all complaints in Canada. Rogers ranked second (18.8%), Wind Mobile third (7.2%), Telus fourth (7.2%).
