Telstra outage: What went wrong and what it means for you

When Australians woke up on July 8, many were met with silence – no calls, no data, no way to get to work. The Telstra outage that swept the country that morning, affecting everything from transport to Eftpos payments, has since triggered a Senate inquiry and the threat of hefty penalties for the country’s biggest telco.

This wasn’t the first time such a widespread outage has hit Australians, either. The 2023 Optus network failure cut phone and internet for more than 10 million customers for about 13 hours. Two years later, a botched Optus upgrade left triple-zero (000) calls unanswered in South Australia, Western Australia and the Northern Territory, a failure linked to four deaths.

Together, these events raise serious questions about the resilience of our networks and make it even more important that you know your rights in the event of an outage.

What happened with the Telstra outage?

The trouble started in the early hours of July 8, with reports of disruptions trickling in from about 4:30am on the crowdsourced platform Downdetector, jumping to about 6500 by 6am. Telstra powers about 25 million mobile services around Australia, with almost half of all calls and data sessions on its mobile network affected at the outage’s peak.

By 4pm, Telstra said the issue had mostly been resolved, though the telco later acknowledged there were some ongoing issues, including one impacting Triple Zero (000) calls.

 

 

Telstra later told a Senate inquiry that the root cause was maintenance on a server in Melbourne. When it was restarted, a software fault reset its internal clock to 2006, triggering system failures across the country. Telstra chief executive Vicky Brady told the inquiry the outage could have been avoided if the server had been updated sooner, revealing that it could have been done for about $30,000.

“I would love to be able to sit here and say there will be zero outages,” she said. “The reality of a complex network environment with fast-evolving technology, you just can’t. No telco around the world could guarantee that.”

How did the Telstra outage affect Australians?

The disruption went well beyond the ability to make or take calls. Eftpos terminals that connect over the network stopped processing payments, affecting businesses and customers. Gig workers such as Uber drivers were unable to take jobs at what is often the busiest times of their shifts, with one saying he lost half his daily earnings.

Public transport was also disrupted in some states, including New South Wales and Victoria, with commuters told to “make their own way home” after regional trains were suspended. The trains themselves were not affected but with drivers and controllers relying on mobile networks to communicate, they could not guarantee the safe operation of services.

Most seriously, Triple Zero was again impacted. Telstra said it completed 604 welfare checks from people who were unable to connect to the emergency line during the outage, with police carrying out physical welfare checks where Telstra was unable to reach customers.

The Triple Zero Custodian, which was set up in response to the Optus outage, said the spike in welfare-check requests was picked up via Downdetector before Telstra formally flagged the outage. The Australian Communications and Media Authority (ACMA), which regulates the telco industry, is investigating and could fine Telstra up to $30 million.

What does Telstra have to do?

Ms Brady told the Senate inquiry that Telstra had written to 8.8 million individuals, businesses and enterprise customers, though not all of them would be eligible for compensation.

The company is now accepting compensation claims from residential customers and small businesses through online complaint forms. Businesses are being asked to provide evidence of the impact, such as booking records, invoices, Eftpos reports or comparable sales data.

 

 

University of Melbourne law professor Jeannie Paterson told the ABC the question was whether Telstra took reasonable steps against a foreseeable risk. “If Telstra was negligent, Telstra is liable for compensation,” she said, though the extent of any payout is difficult to determine at this stage.

Under Australian Consumer Law (ACL), services costing less than $100,000 are covered by consumer guarantees requiring due care and skill. Where a breach is found, customers may recover both the cost of the unavailable service and reasonably foreseeable losses, including lost income.

The Australian Communications Consumer Action Network (ACCAN) argues the burden to chase compensation should not sit with consumers. Chief executive Carol Bennett said Telstra should follow the Telecommunications Industry Ombudsman’s Good Industry Practice Guide on Compensation as a minimum to help restore trust. The guide was the result of a review into the 2023 Optus outage, though it is not legally binding.

In an ACCAN survey in March, roughly one in 10 respondents said they or a family member had been unable to reach Triple Zero from a mobile in the past year because of an outage. The ACMA disputed the results, saying it did not align with other information, including public reporting to the TIO, and threatened legal action.

“We never claimed anything other than what consumers told us was their experience,” Ms Bennett said. “We’ve run that twice and both times we’ve received similar results. So it was 10 percent the first time, 8 percent the second.”

 

 

What can we learn from the Telstra outage?

No matter which network you use, the Telstra debacle is a reminder in an age where we rely ever more on networks that we should know what to do in a telco outage.

This includes understanding your rights, as well as where to find out important information. Under the ACMA’s updated outage rules, telcos must proactively notify consumers during major and significant local outages, explain the likely cause and expected restoration time, and support customers who are at greater risk of harm.

A spokesman for Communications Minister Anika Wells said the government expected “Telstra to comply with all elements of this important work and deliver fair, expedited and efficient compensation to those who suffered losses”.

There are many ways an outage can have an adverse effect, from lost income to disrupted health care. Keep clear records of an outage’s duration and the impact on you, your family and/or business. This information becomes very important if you seek compensation.