By Lucy Battersby
TELEPHONE and internet companies will have to give customers more control, simplify contract information and avoid advertising phrases like ''cap'' and ''unlimited'' as the industry moves to improve customer service under close scrutiny by the communications watchdog.
And companies not registered with the industry ombudsman scheme could be banned from operating, under proposals released yesterday by the Australian Communications and Media Authority.
Customer service within the telecommunications industry is under scrutiny.Credit: Bloomberg
A draft report on customer service said the telecommunications industry had failed to provide good customer service because its self-regulatory approach was too soft and did not give customers enough information.
ACMA chairman Chris Chapman chastised the industry for failing consumers through a ''confuseopoly'' and writing self-governing codes that allowed low standards.
''The way in which the telecommunications industry in Australia deals with its customers must change, and change immediately,'' the ACMA report said.
The industry body Communications Alliance recently submitted a draft of a new consumer protection code to the ACMA, but Mr Chapman appeared unimpressed with the latest attempt at self-governance.
''The industry recognises that they now need to look at their draft code again in light of our report today,'' he said.
The ACMA is inviting companies, consumers and groups to comment on its draft report before it publishes a final report in late August.
''It is fair to say that a lot of the recommendations in the ACMA report are already covered in the revised draft,'' the chief executive of the Communications Alliance, John Stanton, told BusinessDay.
Spokespeople for Telstra, Vodafone and Optus yesterday said their companies had initiatives in place to improve service.
Plan outlines Telstra split
Telstra must split its business into three divisions and put Chinese walls between the retail unit and other units, under a separation plan from Communications Minister Stephen Conroy.
But wholesale customers want more guarantees that Telstra's retail arm will not get favourable treatment from its wholesale or network divisions while the national broadband network is built.
Senator Conroy's department yesterday released drafts of five instructions outlining how the government wants customers to migrate from Telstra's copper network to NBN Co's fibre network and how Telstra should separate wholesale and retail operations.
Final drafts will be sent to the Australian Competition and Consumer Commission, which must approve Telstra's deal with NBN Co and its structural separation before shareholders vote on it.