A leading telecoms analyst has called Telstra’s billing ‘antiquated’ amid claims that it needs to overhaul the system to benefit resellers.
The allegations followed the news that the telco’s largest mobile phone dealer, Crazy John’s, had lodged a $100 million statement of claim for damages against the carrier.
Crazy John’s claimed that Telstra had breached several agreements concerning commissions paid to sign up mobile customers and advertising costs.
The dealer also alleges it did not receive sufficient payments from Telstra because the telco’s billing systems were inaccurate — a claim denied by Telstra.
The Australian newspaper last week reported the company had lodged a 35-page statement of claim with the Melbourne Federal Court. This included a demand that Telstra immediately repay a $21.3 million payment made by Crazy John’s in March.
The claim also features correspondence from Telstra in which it allegedly admitted its systems were inadequate or unable to provide information as required under Crazy John’s contracts. However, the telco has insisted its IT systems for billing and renumerating dealers are robust and reliable.
“The core of the dispute is not about Telstra’s systems,” a Telstra spokesperson said in a statement. “It is about the interpretation of the contract and Telstra is confident that it’s interpretation is the accurate one.”
The claim is set to be heard on July 2.
It follows previous threats of legal action from Crazy Johns in 2002. The dealer subsequently withdrew the claim — a move the spokesperson said did not seriously harm relations between the parties.
In 2002, Telstra also lost its premier channel partner, Strathfield, to rival Optus following an internal audit of Telstra.
“We are not going to draw comparisons between our dealers. Differences of opinion and vigorous negotiations do occur in complex commercial relationships like this,” the Telstra spokesperson said.
IDC analyst, Landry Fevre, said that he did not know if Telsta’s billing system was inaccurate but suggested it was outdated. “It is pretty antiquated,” he said. “You can’t integrate everything into one bill.”
Independent telecoms analyst, Paul Budde, said that Telstra had faced similar issues since the mid-1990s when resellers also had massive problems with the billing system.
The telco had since improved but it needed to change its billing system, the people who operated it and the company’s anti-competitive culture.
Budde said Telstra still had an underlying resistance to facilitate things for resellers and he was not surprised by Crazy John’s action.
The dealer which accounts for one-third of Telstra’s retail sales, according to Budde, was also large enough to employ somebody to seek loopholes in Telstra contracts.
“Most resellers are too small, so they lose a bit and gain a bit,” he said. “Telstra should get a better system, one much more sophisticated to handle that sort of dealership arrangement. There’s plenty of evidence in the market that it is not good enough.”
A major Sydney dealer told ARN there were issues with Telstra’s rebate and commission systems.
He claimed the telco’s systems were outdated but his contract prevented him from auditing the telco to find out if it underpaid or overpaid.
“There are definitely problems in the system,” the dealer said. “We are in the dark with commission payments.”
Co-owner of CCTS Telecommunications in Wyoming, NSW, Phil Cook, however said he had no problems with Telstra’s billing. If he had any problems he would contact the company and the matter would be settled, he said.
“The onus is on us to monitor what we get paid,” Cook said.
Telstra has contractual relationships with more than 270 dealers and retailers, representing more than 4800 shop fronts nationally.