John Linton
Nothing like getting up at 4.30 am to give you plenty of time to do a day's work. I took the opportunity of the short (3+ hours) flight from Singapore to Sri Lanka to catch up on the Australian press's take on the SPT/TPG merger courtesy of Friday's Australian papers provided by Singapore Airlines. All pretty predictable writing except for the back page analysis piece in the SMH which was a little more informed and erudite than the usual anti-Telstra rant - though there was a bit of that in it.
The consensus seems to be that prior to the appointment of the Tex/Mex Trio the previous Telstra management had been working, relatively effectively and relatively harmoniously, to build a realistic wholesale 'division' that would comply with many of the hopes and a few of the necessities of the Australian Telecommunications Act. This all came to a screaming halt when the TMT ascended the throne with their description of Telstra Wholesale Customers as "parasites" and the immediate dismantling of the relatively competent (at that time) Telstra Wholesale top management and cuts to the TW establishment (and of course the start of the US style 'jihad' aimed at obliterating any form of competition in the Australian communications industry in the name of protecting shareholder's interests (and who can argue with a management team doing that?).
Well spotted - but not exactly news and not really germane to the SPT/TPG merger even throwing in the quotes from Michael Malone that he "sees very little in the small ISP marketplace left to buy" and that therefore "we might have to up our aim to target the larger 'players' left - like Internode and Westnet".
I think that the SMH columnist got it right when he said that Telstra was systematically wiping out the tiny - small ISPs via their wholesale pricing and their 'under the counter' direct marketing to other ISP's customers of 'special pricing' that is way below their web site plan prices and 'bundles'. Pretty sensible really when looked at from Telstra's point of view:
1) The 'bunnies' out there that don't have ADSL go to your web site and sign up for two years on the published high priced plans.
2) The 'smarties' out there who have the opposition's ADSL plans are directly called with a 'special aimed at you only for a short time only' (thus getting under the ACCC's radar) offer at prices way below what the competitor ISP is able to provide.
The article effectively discounted the SPT/TPG merger as any sort of consolidation under pressure (and with TPG claiming 33% EBITDA they certainly are able to deal with any suspected Telstra campaigns) but did re-raise the ongoing demise of so many of the "over 900 independent ISP" statements. It will be interesting to see the ABS ISP survey results later this month to see if there remains any support for this line of thinking.
Anway - none of it made any sense to me and I had other things on my mind but the appositeness of the re-raising of the consequences of communications monopolies re-surfaced a little later in the day.
We landed in Sri Lanka, courtesy of the 2.5 hour time difference, at 8 am in the morning and after a hair raising and very long drive from the airport to our hotel and a brief 'acclimatisation' began interviewing the short listed applicants for the positions we had advertised. Some of the discussions with the applicants included their experiences with ADSL in Colombo and the prices, service choices and service quality. As we already knew (and to be the subject of later discussions with Sri Lanka Telecom and the various associated Sri Lankan government departments) only the government owned telco provides ADSL (no wholesaling) with the predicatable results that the cost (in 'normalised' dollars) is six times what Exetel charge in Australia for a slower service with much lower included downloads that is constantly congested on everything including simple web site browsing.
Doubtless Telstra (Australia) would consider the situation of only having one service provider the ideal way for Australia to operate and perhaps the SMH columnist is right in drawing attention to how Telstra under the TMT have pursued this objective.
I guess time will determine the accuracy of that assessment - Anyone want to bet there's really going to be Crazy Kevin's FTTN any time this decade?