Has O2’s reputation been damaged after network outages?

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After the operator’s eight million UK customers were hit by a network blackout this month, Jasper Jackson asks industry figures whether its name has been permanently tarnished

Earlier this month around eight million O2 customers  were unable to make calls, send texts and access the internet for approximately 24 hours following a network outage.

The outage not only affected O2 customers, but also those on MVNOs Tesco Mobile and giffgaff, as well as other services such as payment terminals and the London Cycle hire scheme, which also uses O2’s network.

According to O2, the outage occurred because its core network had problems registering mobile numbers, leaving customers unable to make even emergency calls.

The outage lasted from midday on July 11 until the following afternoon, despite O2 deploying hundreds of engineers in a bid to tackle the problem.

Ofcom has said it is looking into the outage. A spokesperson for the regulator said: “We have been in contact with O2 throughout the outage and we will be discussing it further to fully understand what happened.”

Disaster?
When BlackBerry manufacturer RIM suffered service outages in October 2011, which affected around 35 million customers globally, the news went viral – and many argue the network blackouts damaged its
reputation beyond repair.

While O2’s outage was limited to the UK, knee-jerk reactions from some suggest similar damage may be inflicted.

From the moment the network went down, hundreds if not thousands of angry O2 customers took to social
networking sites such as Facebook and Twitter to vent their displeasure.

Some demanded compensation while others threatened to leave and sign up to rival firms.

Those industry figures we spoke to who deal with business customers said O2’s communication during the outage was very effective.

They claim O2 provided regular updates that could then be passed on to their customers.

However, it appears to be a very different story among consumers, with members of our panel saying O2 failed to get information out to the public quickly enough, especially when it came to fixes such as turning off 3G in order to get a 2G signal.

Poor communication
A survey by pollster YouGov found that 57 per cent of O2 customers it interviewed felt there was a lack of communication from the operator. And only 20 per cent felt it handled the outage well.

And according to YouGov’s BrandIndex online brand value tracker, O2’s score dropped 21 per cent following the outages and was still at its lowest level for three years five days after the outage.

Our panel said the outage caused greater anger this time around due to the evolution of smartphones and increasing reliance on data-related services.

Though demand is good for operators, it also makes customers more likely to make a fuss when something goes wrong.

The operator promised to make up for the outage to its customers “in the O2 way” and last week announced a 10 per cent reduction of mobile bills and an additional 10 per cent of top-up on prepay for all customers affected by the network outage.

The reduction for contract customers will be applied to their September bill, with prepay users able to receive their extra top-up credit in the same month.

All O2 customers will receive a £10 voucher that can be spent in an O2 store. Customers can only redeem the voucher by downloading the O2 Priority Moments application.

Customers received text messages apologising for the issues they experienced as well as large ‘we’re sorry’
messages placed on  social network sites Twitter and Facebook.

The reaction by O2 appears to have appeased many consumers who use these sites.

Other technology companies affected by similar network blackouts have come up with a variety of responses to placate their customers.

Orange France offered a free day’s calling following its outage earlier this year, while Telecom New Zealand went further in not only crediting customer bills with small refunds, but also putting money into community projects in areas most affected by its outage.

In contrast, when BlackBerry services collapsed for days last autumn, RIM offered a selection of free apps, which received a mixed response.

Concerns remain
But not everyone remains confident that O2’s wounds will heal entirely, with customers still expected to leave for a rival.

An online ‘flash survey’ by coupons service MyVoucherCloud of just under 900 O2 customers found of those respondents who were affected by the outage, 34 per cent said they would not renew their contract or would stop using O2 prepay as a result.

This was, however, prior to O2’s compensation announcement, which may go some way towards changing their minds.

Ninety-four per cent of respondents said they were ‘annoyed’. However, six per cent said that they weren’t bothered by it.

However, one thing our panel agreed on was that consumers have short memories, and while anger might be at its height now, in the long-term O2 can avoid significant damage as long as there are no repeats of the problems.

This is what they had to say.

Full article in Mobile News issue 519 (July 30, 2012).

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1 COMMENT

  1. Lets be frank here, O2 have always put glitz and marketing above their network. OFCOM’s continual warning about the quality of their 3G network and their ability to meet licence obligations tells it’s own story.

    O2’s network investment strategy was to buy a big tent (Millenium Dome!). Superb marketing company, but network engineering excellence no chance. It doesn’t make money!

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