Telco Sector Sees 7 Percent Rise in Small Business Complaints

Financial hardship grievances soar 71.9 percent over last year, driven by inflexible repayment options.

A man talks on his mobile phone as he walks past a Telstra payphone in Melbourne on August 16, 2018.William West/AFP via Getty Images

The Telecommunications Industry Ombudsman (TIO) has flagged an increase in financial hardship and small business complaints in its third-quarter report for the 2024–25 financial year.

Complaints related to financial hardship surged by 71.9 percent compared to the same period last year.

While that number dipped slightly from the previous quarter—down 8.1 percent—the recurring issues remain the same: disconnection of essential services, unaffordable payment arrangements, and telcos refusing to offer or adjust repayment plans.

The report highlights a second consecutive rise in small business complaints, which climbed by 6.9 percent to a total of 1,767 complaints between January and March 2025.

Many of these stemmed from unreliable mobile coverage and service interruptions linked to the phased shutdown of the 3G network.

Telco Issues Hit Small Business Operations

TIO Ombudsman Cynthia Gebert said small businesses continue to face operational challenges due to unreliable telecommunications services.

“What we’re hearing from small businesses is how serious the impact of persistent mobile and internet problems is on their ability to provide good customer service and operate efficiently. It’s impacting people’s livelihoods,” she said.

She also noted that the data shows telcos still need to improve in offering tailored support and repayment options that consider individual circumstances, as there is no one-size-fits-all solution.

The disconnection or suspension of essential telco services should be used only as a last resort, she said.

Economic Data Confirms Rising Strain

The rise in complaints comes against a broader backdrop of worsening financial stress in the small business sector.

According to CreditorWatch’s April report, invoice payment defaults jumped 42 percent in March 2025 compared to the same time last year. Business insolvencies also climbed 17 percent over the same period.

While insolvency rates remain below their peak levels from 2002 to 2012, the numbers are now trending above pre-pandemic benchmarks.

Small businesses, which often lack the deep cash reserves of larger firms, are proving particularly vulnerable to inflation and rising costs.

Government Faces Pressure to Act

The federal government has promised a suite of measures aimed at easing the burden, including a $150 energy rebate that brings total payouts for small businesses to $800 since 2022.

Labor has also committed $900 million to the National Productivity Fund, which aims to reduce red tape and regulatory costs, and a further $207 million to modernise business registers.

The recent appointment of Anne Aly as minister for small business has been welcomed by key industry bodies, who are urging practical and urgent policy action.

“Small business owners face complex challenges that require practical, coordinated policy responses,” said Luke Achterstraat, CEO of the Council of Small Business Organisations Australia (COSBOA).

He called for a reduction in the small business company tax rate from 25 percent to 20 percent, saying it would provide immediate relief and incentivise further investment.

“Unlocking small business potential is essential to lifting productivity. Measures like reducing the small business company tax rate would drive investment,” Achterstraat said.

Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman, also emphasised the focus on productivity.

“There are many opportunities to further support small and family business at a time when many are reporting really challenging trading conditions,” Billson said.

Both Achterstraat and Billson said Treasurer Jim Chalmers’ commitment to making productivity a national priority gives them hope that small businesses will see stronger policy backing.

Broader Network Issues Persist

The TIO’s report also found that network reliability continues to be a major pain point.

A total of 15,385 complaints were received from January to March 2025, a marginal 0.6 percent increase from the previous quarter.

Mobile and internet issues made up the vast majority of cases—43.9 percent and 40.6 percent, respectively.

While mobile-related complaints were down by 8.1 percent from the previous quarter, dissatisfaction with internet services remained high, particularly around recurring dropouts and inconsistent service.

One of the fastest-growing complaint categories was inadequate fault testing, which rose by 26.9 percent.

Poor mobile coverage was also up significantly, increasing by 25.3 percent across both residential and business users.

The major telcos—Telstra, Optus, and Vodafone—continued to receive the highest volume of complaints, with six of the top ten providers reporting an increase.

Brisbane topped the list of local government areas (LGAs) with the most complaints, followed by the Gold Coast, Moreton Bay, Wyndham, and the ACT. Together, these five LGAs accounted for over 10 percent of total complaints lodged during the quarter.

The TIO also received 422 complaints from Aboriginal consumers. The most common issues were related to service and equipment fees, frequent dropouts, and lack of access to phone or internet services.