Research Proposal

1. Background

A spike of 375,000 customers has withdrawn their clientele from Vodafone Hutchison Australia (VHA) in the first half of 2011 (Batters, 2011).

1.1 Network Problem

One of the reasons why customers are switching their carrier from Vodafone is believed to be their network problem. The issue arose when many of the customers began complaining about the poor and instable connections of the 3G network in the end of 2010. Vodafone initially announced that the issue was due to the software fault (Crozier, 2010). However, it resulted in so many dissatisfied customers that a thread was created on the Whirlpool broadband forums as well as a website called ¡ovodafails¡± (www.vodafail.com). Though the company is attempting to work out on the performance of 3G network in order to improve the issue, the churn rate has increased (Crozier, 2010).

1.2 Poor Customer Service

Another significant factor lies in Vodafone¡¯s poor customer service. From the telecommunications industry perspective, there has been a rise in customer complaints in recent years overall. The Telecommunications Industry Ombudsman disclosed that Vodafone customers made a tremendous 14,670 new complaints between January and March this year, an increase of 96 per cent from the previous quarter (Grubb & Asher, 2011). Complaints to Vodafone have not only involved mobile network issues, but also a failure in customer service. Customers are frustrated due to long waiting times and Vodafone fails to deliver the promises they made to their users. It is understandable that customers became irritated when they are not able to reach Vodafone staff and solve their problems. Most complaints include billing, faults, contracts and credit management. Early this year, in response to a class action signed up by 12,000 dissatisfied customers against its poor service, Vodafone claimed that they are making efforts to improve the service (Industry Search, 2011). However, the customers insist that Vodafone is indifferent and unable to tackle the problems.

1.3. Security Breach

Vodafone has sacked "a number" of employees following a security breach that resulted in unauthorized access of personal details of millions of Vodafone customers (Foo, 2011), including their names, home addresses, driver's license, credit card details and call and text history which are accessible from any computer, because they are kept on an internet site rather than on Vodafone's internal system (O'Brien, 2011).

More than 9,000 customers have joined a class action and the company has set up a number of taskforces to try to fix the problem (O'Brien, 2011). Vodafone CEO Nigel Dews has ordered an independent security review into the matter while NSW Police has been roped