The Federal Government has responded to requests for an inquiry into the standard of Telstra's service by announcing reductions to telephone and internet fulfilment time of almost two-thirds.
Additionally, Richard Alston, the Federal Minister for Communications, IT and the Arts, announced yesterday an independent inquiry into the adequacy of telecommunication services in metropolitan, regional, rural and remote plans.
The independent inquiry will assess the telecommunications service levels against specified performance criteria, including the legislated Customer Service Guarantee and Telstra's own public commitment to improving its service levels, Alston said. The inquiry will be completed September 30, 2000.
In a statement issued by Alston, the Government will endorse a guarantee, to be overseen by the Australian Communications Authority (ACA), that fulfilment time for new telephone connections in Australian rural areas will be reduced from 40 days to 15 days in two years.
Telephone companies failing to comply with the guarantee would be exposed to fines of up to $10 million to the ACA, Alston said.
The Government endorsement follows claims made by the National Party that the level of Telstra's service has dropped since its initial partial privatisation. The endorsement also follows recent reports attributed to Telstra that as many as 16,000 Telstra employees would be sacked "in the next few years". The downsizing would see the telco's workforce reduced to two-fifths of its employee head-count of 10 years ago.
Telstra's public affairs manager for service and payphones, Adam Redman, suggested the imminent inquiry into the telco's quality of service was the result of customers' and the media's criticism of Telstra's service whenever it "dropped the ball". Redman said Telstra boasted 99 per cent of its rural telephone connections were completed on time.
"This whole service debate has gotten completely out of hand," he said.
Redman maintained any challenges Telstra would face regarding the proposed new regulatory rural connection time would not be caused by staff cuts, which he explained were the result of decreasing profit margins caused by growing competition.
He predicted the telco would face more significant challenges from "aging copper networks" which he said struggled to support an increasing number of households using the internet or more than one telephone.
Telstra recently posted half-year profits of $2 billion.