Telstra Outage Costs Businesses Millions, Expert Says

Building designer Belinda Stewart says the Telstra outage on Wednesday was debilitating for her small business.

Her phone and internet were offline for part of the day.

"I couldn't text my client … and then just basically all day I had colleagues try to ring me and [I was] waiting on calls," she said.

"I had so many things that I wanted to get done and I just couldn't get done. I was in the dark a bit for a couple of hours."

Ms Stewart said Telstra usually offered better coverage in Bairnsdale, Victoria, than other networks.

"Here in the regional areas, we're sort of stuck with Telstra. I was with Optus back when I first started my business because their deals were a bit cheaper and everything," she said.

"But I found Telstra is the main telecommunications company that has got the broader coverage.

"I was lucky that our internet was [eventually] back up and running that we could actually get our actual drawing work done."

Ms Stewart will not be asking Telstra for compensation, but says: "I think they're going to get nasty letters from a lot of bigger people than me."

Cost could run into hundreds of millions

The economic cost of the latest Telstra network outage could run into hundreds of millions of dollars, RMIT associate professor Mark Gregory says.

Dr Gregory, who is with RMIT's School of Engineering, has done previous reports on the estimated economic cost of telecommunications outages, including at Optus in 2023.

He says it can be difficult to quantify the cost of outages, but says a conservative estimate would be an average cost of $4,000 to $5,000 an hour for small to medium businesses.

"If you look at the average Australian small business, especially cafes working in the morning shift between 6am and 10am, the cost of this for four or five hours could be $20,000 or more," Dr Gregory said.

The broader economic losses are likely to run into the hundreds of millions.

"Based upon the figures that we looked at for small to medium enterprise and the number of hours, the fact that it was intermittent and only impacting the mobile network, then you're looking at a couple of hundred million dollars, possibly more than that, in terms of lost economic activity," Dr Gregory said.

He says these figures do not account for extra economic costs to larger businesses and government organisations.

"The lost productivity due to telecommunication outages means that there's an ongoing cost, not just to small businesses but to medium and large businesses, government organisations," Dr Gregory said.

But telecommunication outages affect small-to-medium enterprises (SMEs) first and foremost.

"The larger organisations are able to delay meetings or put off decision-making, whereas the SMEs are mostly happening now that we've got a transaction that's got to occur now," Dr Gregory said.

Dr Gregory said the latest Telstra outage had a broader impact than other recent outages, including Optus's network outage in November 2023 and the Triple Zero Services Outage in 2024.

"I would say that this one [the latest Telstra outage] was very severe in a different way to the Optus outage, which again was a national outage," he said.

"In this particular case, we know that the impact has been the mobile networks. But in addition, what we've seen is that train networks have been taken down and other systems that are relied upon the mobile network for that connectivity.

"And taking trains offline mean that people can't get to work, people are delayed many hours. You have that whole disruption occurring. It then impacts vehicle fleets, it impacts ambulances, it impacts emergency services. We have impacts right across the board."

Compensation could be difficult to secure

Dr Gregory encouraged impacted businesses to contact Telstra in the first instance and see if the telco would offer compensation.

"Put in a complaint and say, 'Look, I've had losses', [and] see what compensation that they would offer," he said.

Dr Gregory said the Telecommunications Industry Ombudsman could be contacted as the next resort.

Maryam Abedi runs nursery Plant Outlet in outer Melbourne and estimates she lost about 80 per cent of her usual sales due to the outage.

Her business is not on the Telstra network, but her suppliers and customers were unable to get through.

"Lots of customers who had placed the order couldn't come to pick the orders," Ms Abedi said.

"And lots of customers got the issue to pay with their phones. And I also can't contact lots of suppliers to organise the deliveries and orders and place the orders."

She says she is considering her options for compensation.

Ombudsman Cynthia Gebert is urging people to first complain to Telstra, but says if they fail, to contact her office.

For people with different providers the avenues are less clear, but Ms Gebert urged people to get in touch.

She said the organisation received about 30 complaints yesterday.

"They were a mix of small businesses, but also average residential consumers who have been impacted by the outage," Ms Gebert said.

She said the outage had a significant financial impact on some Australians.

"Particularly for small businesses, people haven't been able to make contact with clients where they've been going out for jobs," Ms Gebert said.

She expects a growing number of complaints from today onwards.

"If Telstra does a good job, people won't need to come to us, they will get fair and reasonable outcomes, but in the event that people can't get a fair and reasonable outcome, we're the place to go to get that help," Ms Gebert said.

Telstra chief financial officer Michael Ackland told reporters yesterday that the company was considering compensation.

"We'll work with all our customers once we've restored, that is our normal process, that we'll work with customers," he said.