Telstra’s troubled billing system infrastructure has again come under fire, with the sudden accrual of another $243 million of bad debt only months after the carrier purged nearly $600 million of receivables from its books to collection agencies last year.
Questions about the accuracy of bills the national carrier issues to its customers were raised at Senate Estimates on Monday. Regional Services shadow Senator Sue Mackay demanded to know what proportion of the accrued bad debt was generated by either inaccurate bills or billing system errors.
Mackay also demanded specifics on the number of customers that Telstra anticipated such billing system errors would affect.
Caught offguard, Telstra’s group managing director of finance and administration, John Stanhope resorted to a spirited if seasoned defence of his organization’s swelling debt book. Stanhope said, that on the advice available to him, Telstra stood by the entire debt as legitimate, an answer that left Mackay dissatisfied.
Pressed for a specific figure or estimate on how any error margin in the bills issued would translate into customers wrongly having monies demanded of them, Stanhope said, “None,” adding that “The accuracy of [Telstra’s] billing systems is very good.”
Referring to the last $600 million debt purge, Stanhope said it was estimated that around one million accounts had been sold to collection agencies, adding that in the wholesale market, customer risk assessments were conducted on an “individual basis”.
Telstra’s ballooning debt book is also certain to have been affected by a recent determination forbidding Australian telcos to on-sell 'debt in dispute' [debt contested by the customer prior to a binding legal determination] last year.
Telstra’s sale of debt also neatly coincided with a doubling of complaints to an unimpressed Telecommunications Industry Ombudsman, who was caught short-staffed to deal with the avalanche of Telstra complainants generated by collection efforts on the one million moribund accounts.
Stanhope’s confidence in Telstra’s infrastructure contrasted with earlier evidence he submitted in relation to Telstra’s controversial practice of off-shoring IT development. The committee was told that a key driver for sending systems development work to countries such as India was Telstra’s concerted effort to reduce operating costs by consolidating and rationalising its ageing IT infrastructure.
“Telstra has lots of legacy systems…we are trying to reduce the number [and type] of systems we rely on,” Stanhope said.
Pursued by Senator Kate Lundy about the degree of forewarning Telstra had that IBM jobs would be moved to India as part of its contract re-negotiation, Stanhope said that all of Telstra’s suppliers had been put on notice to come up with the best value for money.