Internet services led a 16.9 per cent increase in complaints to the Telecommunications Industry Ombudsman in the 2007 financial year.
Ombudsman Deirdre O'Donnell said customers who had issues with their Internet service now make up almost a third of the complaint load.
Complaints to the Ombudsman increased by 16.9 per cent over the previous year to 102,463, with the fastest rate of increase from Internet services, followed by mobile and landline services.
"Complaints about billing and payments, including direct debits and capped and bundled phone plans, were a source of concern for all consumers," O'Donnell said.
"Customer service was a particular issue for Internet service consumers."
Each complaint to the TIO may generate more than one issue. For example, a person complaining about a landline bill may also complain about a landline fault or credit management issue.
The TIO logged 54,285 mobile service issues, 54,336 landline service issues, 48,181 Internet service issues and 10,083 mobile premium service issues.
The Mobile Premium Services Industry scheme, which includes a mechanism to help consumers resolve problems with premium rate SMS message received via their mobile phones, was introduced in December 2006.
Only a small proportion of these complaints was required to be formally investigated by the TIO, with most resolved by the provider.
Under the landline category, complaint issues about privacy dropped by almost half (47 per cent). This was probably due to the introduction, in May 2007, of the Federal Government's Do Not Call Register, which allows people to opt out of receiving certain telemarketing calls.
Complaint issues about landline contracts increased by more than a third (36.9 per cent), reflecting a move to the bundling of telecommunications services.
Traditionally, landline services have been provided on request and terminated on request. Many services are now rolled together and supplied on contract for a minimum period.
Customer service accounted for about 17 per cent of complaint issues to the TIO. The leading sources for concern under this category included service providers failing to act on a customer's request, giving incorrect or inadequate advice or not being able to be contacted.
Computerworld is awaiting a response to the report from Australia's largest Internet Service Providers (ISPs), Telstra and Optus.