Telco ombudsman to rethink funding model

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Telco ombudsman to rethink funding model

Revenue slides as complaints drop.

The Telecommunications Industry Ombudsman has employed audit firm KPMG to review its funding model to ensure the organisation can continue to pay for its future operations.

The TIO as it stands is wholly funded by industry, taking a fee from member telco companies for each customer complaint it handles. It claims this approach acts as an incentive to Australian telecommunications businesses to lift their performance.

But this approach may be working too well: in April last year the TIO said it would shed 10 percent of its workforce in response to a steady four-year decline in the rate of complaints.

In December, complaints fell even further, to their lowest point in nine years.

Yesterday the agency announced KPMG would be brought on board to “ensure that our funding arrangements meet the needs of the scheme and its stakeholders”.

“The review is being undertaken to make sure the TIO continues to be funded in an effective, consistent and sustainable way,” a statement on its website reads.

The TIO earned just under $28 million in 2014-2015, nearly all of which came from industry complaint fees. This was roughly $3 million down from the previous year and saw the agency’s operating deficit jump to $294,173.

TIO members have been asked to respond to an issues paper and a survey covering industry opinions on the way the independent watchdog is run.

KPMG has been asked to study similar organisations locally and overseas for alternative approaches, and is due to report back to the TIO board in March.

“The process for reviewing the funding model will be comprehensive with alternative funding models requiring careful financial modelling," the TIO said.

“If a decision is made to replace the current model the implementation would then need to be carefully planned to ensure operational continuity is maintained."

The review will be considered by new TIO Ombudsman Judi Jones.

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