Telcos overtake social media as the most distrusted industry

Australia’s telecommunications industry is the most distrusted sector in the economy, and has overtaken social media for the first time since Roy Morgan began measuring distrust in 2018.

Data breaches and scandals are behind the rise, with a telecommunications expert telling The New Daily that a lack of focus on customer needs, inadequate response to natural disasters, and data security concerns also contributed to the poor rating.

Optus effect

According to Roy Morgan, the Optus data breach in September is a primary driver behind the surge in distrust, resulting in the telco giant becoming the second most distrusted brand in the Australian economy.

Telstra is now the third most distrusted brand.

Although Facebook remains the most distrusted overall, Optus is quickly closing the gap.

Despite the overall struggles in the telecommunications industry, some brands, like Aussie Broadband, defy the trend, ranking as the most trusted telco in the country at 26th among all Australian brands.

Ripple effect

The survey reveals that distrust is pervasive across a range of industries. For instance, the travel and tourism industry took a hit, falling in net trust rankings.

Qantas experienced heightened distrust due to customer dissatisfaction resulting in widespread negative press.

Similarly, the insurance industry dropped in the rankings, driven by high levels of distrust in Medibank.

Roy Morgan said this shows how data breaches have a very real impact on a brand’s distrust levels.

Photo: Roy Morgan

Associate professor at RMIT University, Mark Gregory, told TND the decline in trust stems from telcos’ inability to prioritise customers’ needs, particularly during natural disasters and in the face of price hikes.

He pointed to the example of telcos changing customers’ NBN plans to cut costs and increase profits, prioritising their bottom line over customer satisfaction.

Dr Gregory also raised concerns about data security, saying that “people don’t believe that [security] has been taken seriously,” and that “the penalties for data breaches remain too low”.

Call to fix issues

Dr Gregory said that the telecommunications industry globally lacks a strong rapport with customers, having “focused on expanding their customer base at the expense of service quality”.

The NBN debacle in Australia has only exacerbated the problem, creating doubts about the industry’s direction and control, he said, adding that government intervention was needed.

“This is an area where government needs to spend more time” and treat the industry as providing an essential service.

“Australians want these issues to be fixed. They can be fixed. They should be fixed,” Dr Gregory said.

Roy Morgan CEO Michele Levine says that brands need to be aware of the dangers that distrust presents after major scandals.

“Unfortunately for Optus, it has been proven that brands which suffer major scandals find that once distrust takes hold, it is very difficult to curtail,” she said.

“We know that distrust makes a brand fragile and is a powerful driver in the decisions consumers make. High distrust in any industry’s key players opens the door for trusted brands to take market share.”

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