Since mid-2006 Telstra has been subject to a set of obligations called Operational Separation to ensure Telstra does not favour its retail business over its wholesale business. Over that time Telstra has produced and submitted 12 reports for Service Quality, 12 for Price Equivalence and three annual Compliance reports to the ACCC. None of these reports has been questioned or challenged by either the ACCC or our Wholesale customers. But what exactly does Telstra do to comply with its obligations? In this issue we lift the lid on how we manage Operational Separation obligations in our business.
So what is Operational Separation?
Operational Separation is a set of obligations imposed on Telstra by the Government – and on no other company in Australia – to ensure Telstra does not favour its retail business over its wholesale business.
The Operational Separation obligations cover six areas:
- Service quality: we have 23 key metrics that measure how we perform for wholesale customers compared to retail customers and how we perform for wholesale customers compared to targets agreed with the ACCC and the Govt.
- Customer responsiveness: we are obliged to manage complaints in 30 days and have an alternative dispute resolution process in place if complaints are not resolved to the satisfaction of the customer.
- Information equivalence: we must report each year to wholesale customers on planned adverse changes to our network over 24 months in advance and provide at least 15 weeks’ notice (or longer, as required by our service terms) before undertaking network upgrades that affect specific services to wholesale customers.
- Price equivalence: we need to demonstrate to the ACCC that our prices for key services allow sufficient margin for our wholesale customers to compete against Telstra Retail services.
- Training: we must train our employees to understand what our obligations are.
Information security: we must protect the confidential information of our wholesale customers.
How does it work?
“A huge amount of effort goes into complying with Operational Separation,” explains Telstra Wholesale Group Managing Director, Paul Geason.
“We have a multi-layered approach that digs into key processes deep in the core of the organisation.”
Operational Separation Program Manager, Nancy Aitkins, says that if any of the 23 metrics used to compare the delivery of services to our wholesale and retail customers vary by more than 2%, then this variation must be explained to the industry and an action plan must be developed that says how Telstra will improve its performance.
“We go back each month to check the specific metric and if it hasn’t improved we continue to review and address the action plan until performance is within the target range,” explains Nancy.
Systemic improvement is at the heart of Operational Separation, and across the 23 key performance metrics we have seen an ongoing trajectory of improvement since Operational Separation started in August 2006.
For example in Quarter 2 of the current financial year ending 31 December 2009, 93.17% of all Spectrum Sharing faults were fixed within a target timeframe. This represents a turnaround achievement, given that 24.67% of all faults for Wholesale customers were being fixed outside this target a year ago.
But monitoring these 23 metrics is not the end of it.
Telstra Wholesale is also located separately to other Telstra business units and there are processes to ensure the information related to wholesale customers and their end-users is not accessed inappropriately.
All new Telstra employees and most contractors must complete online induction which includes a 45-minute Operational Separation module which is followed by a 10 to 15 minute refresher course biannually. The number of employees who have completed the training is tracked by Governance and Compliance.
Telstra reports to the ACCC each quarter
We report on Service Quality and Price Equivalence to the ACCC and the Federal Government each quarter.
Once a year, compliance on all aspects of Operational Separation outlined in the six areas above is combined in a single report which is submitted to the ACCC and the Government and we also post the report on our Telstra Wholesale website. Each year, Telstra is also required to appoint an independent external to assess Telstra’s compliance. The auditor’s opinion is included as a part of the annual compliance report and is signed-off by the Board Audit Committee.
More information
Please visit the ACCC website at: http://www.accc.gov.au/content/index.phtml/itemId/759631 or our Telstra Wholesale website at: http://telstrawholesale.com/dobusiness/customer-commitment/operational-separation.htm
