Learning to grin and bear it: Vodafone’s bad month


It is late in the month of October in the year 2008, and Sydney has just begun the long wind-down as it prepares for its traditionally glorious summer, with all the pleasures that implies. The Christmas party is season is in full swing — muted slightly by the sharp budget cutting that has taken place with the global financial season — and silly season fever has taken hold of much of Australia’s technology sector, as it does this time of year, every year.

But despite all the frivolity, Optus managing director of products and delivery Andrew Buay is not having fun.

Buay’s long-running problems started in July that year. A cable cut by non-Optus contractors took down the entire state of Queensland in one hit, leaving hundreds of thousands of customers stranded. Then a series of glitches in August hit the company’s 3G network. The launch of the iPhone 3G on Optus’ network in July went fantastically well, but took its own toll on the telco’s infrastructure, flooding its mobile base stations with hungry smartphones at a time when it could ill accommodate them.

Throughout this whole process the press was taking note, making a little notch on its collective belt every time Optus suffered another glitch, with many keenly awaiting what they saw as the endgame for the troubled SingTel subsidiary: Total network meltdown, leading to mass customer exodus.

Yet at the time Buay himself appeared to remain calm.

The carrier’s ongoing spate of problems with its 3G mobile network were “quite normal”, he insisted in an interview with ZDNet.com.au. “I suppose mainly because we have been in the limelight, every little thing that does happen gets a lot more visibility, but you know it does happen with every operator and network in various sizes and frequencies.”

How prophetic those words must seem to VHA chief executive Nigel Dews today.

This week the experienced telco executive — veteran of a thousand network storms — was forced into taking that most unhappy of steps in a CEO’s public life: The general apology. With Vodafone’s call centre crushed under an onslaught of complaints about outages in its troubled mobile network and the internet teeming with thousands of angry customers, Dews took to the company’s blog to appologise for the telco’s ongoing problems.

“I would like to apologise for recent intermittent network issues that have impacted some of our Vodafone customers and how we have kept you updated,” he wrote.

“Having customers who are happy with their service and their network experience is central to us, but unfortunately in recent weeks, some customers have had a disappointing and frustrating experience which I am very sorry for. Looking at your comments on various blogs including here on our own, it’s clear we could have done a better job at keeping you across what’s been happening.”

Like the problems suffered by Optus throughout the second half of 2008, Vodafone’s problems over the past few months appear to have come on the company one by one, like a slowly building avalanche that suddenly crashed down on its head. On October 20 one of the first posts about the issue hit the forums of broadband information site Whirlpool, with one customer from Adelaide noting problems such as extremely slow internet browsing, time-outs, SMS failures and low signal strength had started apearing “about a month ago”.

After just a week it appeared the general public had caught wind, and Whirlpool’s Vodafone forum started to fill to bursting point. That first thread now has 54 pages of comments and others can be found both within Whirlpool and on other forums across the internet.

The Twitter hashtag #badoptus had long acted as a central point of complaints about the SingTel subsidiary’s network performance, but now a new sounding board was born — #vodafail. By early December, a whole website had been set up to chronicle the complaints — Vodafail.com — to aggregate hundreds of customer stories.

If you believe some of the angry rants, as a brand Vodafone could be close to the end (the Vodafone brand is operated by VHA in Australia).

“The amount of work that’s required to fix this mess is going to be almost impossible and I’ll take my hat off to Vodafone if they can fix the problem,” wrote one customer, in a post which is one of Vodafail’s highest-rated rants. “Word of mouth is how they got so popular but it could possibly be the end of them.” “I think Nigel Dews should resign. Your sorry is too little to late,” wrote another. “Your pathetic excuse that only a few people are suffering is just that, pathetic.”

And yet, when you delve beneath the surface of what’s actually going on within Vodafone’s troubled corporate walls right now, the story is a little more complicated than the telco’s critics would have their audience believe.

For starters, IDC telecommunications analyst Mark Novosel points out customers’ experience of the network will depend on “many different factors” — where they live, how congested each mobile tower is, and sometimes even handset choice. Characterising the Vodafone mobile network as a single piece of infrastructure with a fundamental flaw is understating its complexity — like any mobile phone network, it is a linked system of interconnecting networks spread out across the nation.

But remarkably, also, Vodafone’s situation today shares many similarities with the problems being experienced by Optus throughout 2008.

Both telcos suffered widespread problems in a certain state relating to a fibre cable outage (Western Australia for Vodafone, Queensland for Optus). Both have suffered from software problems in the network that affected stability as a whole. And both had a series of glitches in capital cities, where data-hungry early technology adopters are likely to complain the loudest.

Macro-level problems also affected both telcos.

Like Optus in 2008, Vodafone is right now constantly throwing capacity at a mobile phone network which is experiencing exponential growth in data traffic. In 2008, Optus was dealing with an influx of iPhone traffic onto its network, with the greedy Apple device making a mockery of the consumption habits of previous-generation smartphones such as the more efficient BlackBerry and even Nokia’s Symbian platform.

Today Vodafone is facing a similar situation. In 2010 Australia’s carriers are facing not just the iPhone connecting to their network, but a raft of similar handsets based on Google’s Android platform. Even low-end phones that cost less than $200 are now increasingly based on Android and have full web-browsing and multimedia capabilities.

In the understatement of the year, the Australian Communications and Media Authority wrote in a December report this year that the take-up of mobile broadband services in Australia (including smartphones and USB modems) had “grown significantly over the past two years”.

In December 2008 — as Optus was having its own well-publicised problems — there were some 1.3 million mobile broadband users in Australia, according to the Australian Bureau of Statistics. A year and a half later, another 2.1 million connections had gone live — with many of those on Vodafone.

Over the past year, all three of Australia’s mobile telcos — Vodafone included — have made public statements about how much they’re investing in capacity to their mobile towers to meet the demand. It’s one of the chief benefits the trio are looking forward to from Labor’s flagship National Broadband Network project — they’ll be able to run fibre easily to any mobile tower when it’s complete.

Staying ahead of this capacity game is understood to be one of the complicating factors behind Vodafone’s outages. When one system goes down, it delays the constant upgrade cycle, and so you’re already behind even when you’ve fixed the issue — like trying to put out a fire with a constantly leaking bucket.

Novosel agrees Vodafone’s issues are a lot like the ones suffered by Optus in 2008. And, he points out, Optus has been able to largely resolve most of its problems since that time, through “a significant amount of investment”. Vodafone, too, is known to have been investing heavily in its network for some time.

The SingTel subsidiary isn’t completely out of the woods — as an outage several weeks ago demonstrates — but Novosel says the network has improved greatly. Indeed, IDC published a report in June showing Optus’ 3G mobile broadband offering was only four percent behind Telstra’s Next G across a range of criteria, although Telstra’s network was, on average, much faster.

However, Novosel says Vodafone’s situation, when it comes down to it, more complex than that of Optus was back in 2008.

Vodafone isn’t just improving its network right now, he points out — it’s actually simultaneously integrating the network of its acquisition Hutchison (which operated the ‘3’ brand), adding in 850Mhz network assets to help its existing network, and building using the 900MHz spectrum in regional areas. Hundreds of millions of dollars are being ploughed into such initiatives as well as general network upgrades.

“It would appear that it’s more complicated,” the analyst says.

Then, too, the company’s network is about to hit crunch time. The Christmas and New Year period are always the busiest time of the year for Australia’s telcos, with millions of text messages and calls placed to loved ones as the entire nation takes a break. Vodafone’s network will be tested to the absolute limit and back again over the next week — as will those of Telstra and Optus.

But one gets the feeling about Vodafone right now that the company has an “all hands on deck” attitude about it as it swings into the New Year. The image you get talking to company insiders is one of a hive of activity, especially on the technology front. And it’s reinforced by the company’s social media presence, which has been frantically responding to outage queries as fast as they can type this week.

And certainly Vodafone has already fixed its biggest problem: A lack of communication.

“Our message to all telcos is this: network problems will occur from time to time, and customers understand that,” said Australian Communications Consumer Action Network chief executive Teresa Corbin this week. “But if you’re in the communications business, you have to let people know what’s going on or you will risk losing your customers for good.”

It’s probably safe to say that Vodafone — and Optus before it — has now gotten the message.

Image credit: Vodafone


  1. I know this is a piece comparing and contrasting Optus and Vodafone, but how does Telstra’s mobile network compare to the two mentioned?

    I’m guessing it fares much better..?

    • I think it’s safe to say Telstra’s Next G is a far sight better than either — and it’s the only mobile network I will use for voice or data.

    • David, I work on Barrow Island on the gorgon gas project, there is one Telstra Next G tower it handles all my calls and data through my iphone 3G together with over 1200 workers. Even during peak hours when workers are back at the camp calling their loved ones we get minimal call drop out and data is slow, but still a lot more service than vodafone are providing in the city!. This is done all through one 1 Telstra Next G cell.

      Why is it that on an island in the northwest with one tower can provide more service than in the city?

  2. We changed our business phones from telstra to optus 3 months ago. Needless to say, even though it gave us a 10K/annum saving, we will move back to Telstra as soon as we can. Most of our employees who had great 3g coverage at home (within 10km of Brisbane CBD) with telstra, are getting one bar or no 3g at all now. Handsets are HTC or Iphone 3 and 4 – nothing cheap. We got some big promises by the optus sales rep – but little is true. As much as I hate telstra and their ethics, they do offer a premier service. We simply rarely had a drop out, and never had an issue with data roaming. Optus will be consistently 4 – 5 calls dropped a day and bad data coverage. Sorry Optus, I do want to support you and better competition in the marketplace, but you are simply not up to scratch at the moment.

    • I had exactly the same situation with my own business with respect to Optus. I’d often be at a conference and my tethered iPhone for mobile broadband would drop out. Right now I wouldn’t buy mobile broadband or mobile services in general from anyone else from Telstra — my business can’t afford the risk.

  3. I was using Vodafone 3G for internet. This month I cancelled my service and broke contract. I refused to pay the contract pay out due to the abysmal performance problems of their network. All we hear from Vodafone are excuses.

    It boils down to this – Vodafone can not provide a workable solution for their paying customers. Therefore as customers we are under no obligation to continue paying for their service. No amount of hand wringing or excuses will solve the problem of internet outtages, or lost phone calls, or txt messages received a day after they are sent.

    • I’m not sure of the legality of breaking your contract and not paying; maybe you should seek advice from the Telecommunications Industry Ombudsman?

      • Yup already did that. The TIO was notified and I stated I would be refusing to payout the contract. I think I had about 6 months remaining on a two year contract.

        • Just confirming I left my contract without paying a cent. People need to stand up for their rights. Plus if you complain long and hard enough Vodafone will give in. The days of “she’ll be right mate” are well and truly over here in Australia. We all need to be more hard-nosed about service if we’re ever going to improve on what we have in this country.

  4. I had a Telstra sim and thought about keeping it and paying the silly data prices or jumping to vodafone and a cap. (Telstra data prices not so bad now)

    Switch to vodafone and I get delayed SMS’s to other networks and dropped calls now.

    The 3G coverage isn’t to bad as I can hook up to my wireless network at home and not have to rely on the 3g coverage in my house :P

    In the melbourne CBD its rock solid except for a few pockets where I completely lose 3g connectivity.

    Luckily I only signed up to a 12 month contract and will be considering my options when that is up

  5. I’ve been a loyal vodafone customer for 10 years. But I have seen a significant drop in service over the last couple of years. The recent 3G problems are, I believe, just the result of a deeper management problem that is not going to resolve itself anytime soon. I’ve lost count of how many dropped calls, slow/no data, poor signal etc I’ve had. Not just in Sydney CBD but in suburbs and in Canberra and anywhere in between. Therefore I will most certainly change to telstra very soon.

  6. Just joined Vodafone from 3 in August. Must be lucky where I live (Brisbane Southside) as the 3G coverage has been fine. Was with 3 for four years before that and also was fine. Must be lucky when i travel too, have been to Canberra, Mackay, Cairns, Rockhampton, Townsville since joining Vodafone and always had 3G coverage.

    Handset makes a difference of course. Had a HTC Legend originally and would only get intermittent coverage inside my house. Just got the Desire (Legend stolen) and all of a sudden coverage inside the house is excellent.

    Haven’t used Telstra because of prices, but would consider it when this cotract is up as their current crop of deals are almost on par with their competitors.

  7. Everybody is complaining about vodafone this week, maybe telstra next or virgin or optus next I have used telstra and vodafone over years and they both have good and bad pionts as comsumer we just have to put up with it and shift around when required, there is no piont complaining

    • That is true Adam but the problem is most of these wireless providers want to lock people into 12 or 24 month contracts. What happens when you are 50% into a contract and the service becomes unusable – not just for short periods – but whole months as is the case with Vodafone at this time.

      I personally believe the contract system needs to be abolished and people should be allowed to change on a month to month basis if they so choose.

      • Sean. You can. Both Optus and Voda offer BYO month by month plans. And you can buy your own iPhone or Android or Blackberry from multiple locations and put a BYO SIM in your phone.
        Then why does everyone complain about being “locked in” by the carrier to a 12 or 24 month contract when they get a bright shiny new $800 phone for FREE. Only way the carrier can recover the cost of customer acquisition (that guy in the store who set up your phone for you doesnt come for free either) is by requiring you to stay around for long enough that they can recover the start up costs and still make a margin on the whole deal.
        Just check their Annual reports and you will see that Optus only makes a net margin of 15% on consumer plans. Pretty poor return considering the billions they have invested in the network and the risk they take with customers (slow payments, contract refuseniks, etc).
        Simple Answer: Don’t like your Contract? Buy your own phone upfront and go month by month

  8. Vodafone has failed me, rubbish reception in my area The Narrows 0820 despite being 5 km from CBD. Can’t do Internet, can’t call most of the time from the house, you have to go wandering out there to get a pocket of signal. Worse off we were told we would be on 3G 2 yyrs ago!

    • Live in The Gardens, exact same problem. Took Vodafone to TIO for falsely advertising their coverage and was given full refund. Even the Vodafone store in Casuarina told me that their coverage maps are totally wrong. Telstra is really the only option in the NT, alas.

  9. I think your post woefully underestimates the problems with the VHA network. My issues actually started in June when after multiple calls to Vodafone and multiple tests I was finally told there was an issue with network that would take months to resolve as infrastructure needed to be upgraded. Your post suggests it has been intermittent outages. In inner-city areas of Sydney the only thing reliable about the VHA network since May has been poor data performance, calls not initiating, call dropouts, SMS not delivered, or often no signal at all. I actually think the impact on Vodafone financially will be huge. When I joined Vodafone 5 years ago the simple customer value proposition was Vodafone = Decent coverage in urban areas at a cheaper price than Telstra verses Telstra = Great coverage in urban and rural/regional areas but at a premium. Today Vodafone equals crap coverage in the heart of the city and Telstra now matches Voda plans. Any loyalty to the Vodafone brand was shredded by the complete lack of communication from them.

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