Businesses, lawyers count the cost of meltdown

AN estimated $2.5 million a day has been lost in the Warrnambool and district economy because of the Telstra exchange outage, the city council has calculated.

Across the entire south-west extending from Lismore through to Portland the total impact could be closer to $100m by the time all connections have been restored.

At least one legal company has been approached to consider a class action on behalf of those affected.

Telstra has contingencies for compensation, but it is likely to be months before the full extent of lost trade, damaged business reputation and inconvenience is known.

The entire region’s landline and Telstra mobile network was thrown into chaos by the fire at the Koroit Street exchange building at 4.35am last Thursday.

Internet connectivity, EFTPOS, fax and automatic teller machines went dead and are only now progressively being restored, along with phone links.

The city council’s executive research officer Andrew Paton has calculated the lost gross regional product from Warrnambool businesses at $2.5m for a normal working day, assuming that 60 per cent of the city’s businesses were affected. 

His calculation is $2m a working day if 50 per cent were affected.

Warrnambool’s mayor Michael Neoh said every time a potential customer was unable to contact a business there was an effect.

Commerce Warrnambool president Richard Montgomery said there were wide-ranging impacts on all sections of the business community, particularly retailing in the lead-up to Christmas. 

“Accommodation providers were feeling it during the weekend when people were unable to contact them by phone or online,” he said.

“It’s been very difficult to operate without phones, EFTPOS and the internet, plus consumers were only able to get limited money out of the banks. No doubt there will be an effect on our reputation. People living outside the region don’t realise the full extent of  how hard the outage hit.”

Warrnambool legal company Maddens confirmed yesterday a number of businesses and individuals had inquired about the potential for litigation.

“Investigations are continuing into the cause of the fire and at this stage we are of the belief the priority is to have services restored,” class action principal Brendan Pendergast said.

Telstra Country Wide south-west area manager Bill Mundy investigates the physical damage done to Telstra's Koroit Street exchange.

Telstra Country Wide south-west area manager Bill Mundy investigates the physical damage done to Telstra's Koroit Street exchange.

“We too are a south-west business impacted by this disaster. The obvious question that we as a business and our large network of business clients is asking is how was a localised fire able to cripple telecommunications across such a huge area?”


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