Switching phone suppliers a risky business

By RICHARD PAMATATAU

The risk of a botched transition, technical issues and hidden costs are still barriers for New Zealand companies changing their telecoms providers.

Problems like these recently saw the Ministry of Corrections shift its account from Telecom to TelstraClear and then back again.

In another case, Palmerston North-based mail-order clothing firm EziBuy also reverted to Telecom after making the shift to TelstraClear. That business was thought to be worth around $1.3 million a year to TelstraClear.

Corrections declined to comment on its decision to take its $30 million worth of business back to Telecom, but TelstraClear has acknowledged it could not meet deadlines.

Ernie Newman, Telecommunications Users Association chief executive, said a number of headaches came up when companies looked to change provider.

"Technical issues are not a big thing in the main centres, but if the organisation is large with scattered branches, then it is going to have some significant problems," he said.

"In smaller organisations the thought of just changing the stationary is enough to put a halt, not to mention the fact that many smaller businesses are dependent on their customers to call them."

He said that in the mobile area a lack of number portability was a huge barrier to switching operators.

Chris Zwaagdyk, business development manager at Teleconsultants, said change was less problematic for companies with offices in the main centres.

"The points of restraint come in to play where the organisation looking to change has a far-flung network where competitors to Telecom do not have much of a presence.

Zwaagdyk said organisations also issued tenders to validate the processes, services and pricing offered by their existing provider. "Sometimes the act of issuing a tender or getting a consultant on board has the effect of getting the established carrier to reduce prices as well."

He said New Zealand's telecommunications industry had not reached the maturity level of the banking sector, which was more likely to assist a customer changing provider, in the hope of winning business back in future.

Karim Hussona, chief executive of Compass Communications, said there were degrees of difficulty, depending on the company and services being shifted. "The easiest is toll provision because the customer just fills out a form and authorises Telecom to apply non-code access for toll calls, but if a customer gets the slightest thing wrong it gets rejected.

"At times it seems like Telecom is looking for reasons to prevent people from changing provider."

But he said Telecom had improved its ways. Customer account and phone number changes were easier, whereas in the past number changes were rejected if an abbreviation for "road" was used in the address.

Companies looking to shift toll-free numbers faced bigger problems based around both technology and number ownership.

"With some effort Telecom can port numbers across, but it is not straight forward."

Shifting lines was hard as there was no code of practice established between the carriers, and carriers were reliant on the incumbent to be co-operative when a deal was won.

In these situations the processes had to be meticulous because Telecom would stick to the letter.

"The thing is that Telecom will only do what it is obliged to do and then it is done grudgingly."

Hussona cited a recent deal where Compass offered sharper pricing and service but lost when Telecom took the customer to the Hong Kong Sevens rugby.