John Linton
As those of you who may have read these musings over the past 8 months or so may remember I have written several times about Exetel's desire to offer services over 3/4G/HSDPA/Whatever and have constantly alluded to my continuing failure to be able to find a suitable solution. I think I've also referenced some of my more startlingly bad decisions over the last four years. Well, for once, maybe one of my decisions, albeit a negative one, is better than average - the decision not to become involved in the re-sale of one of the Australian mobile companies data over HSDPA services despite being tempted.
The reason I say that is the latest (at least I didn't see it before this weekend though the ad is dated 1/2/08) Optus "Unplugged" ad for its HSDPA service offering a $19.95 service with 1 gb included (with four months of a 24 month contract free giving an effective cost of $A14.50 a month).
Glad I didn't walk in that trap.
The trap? A 'wholesale' offer of being able to buy a 1gb service for $16.50!
Of course there are 'catches' but the average customer isn't going to notice those just as they don't seem to notice/care about the same catches when buying mobile plans with free handsets.
Doubtless the other download allowance plans will subsequently feature in similar ads in the near future at similarly reduced prices making any notion of wholesaling such a service sheer nonsense.
Similarly I was recently offered the 'opportunity' of buying a Vodafone 'wholesale' service but that was even easier not to consider because it was being offered at costs ABOVE the then current Vodafone retail prices and God know;s what those current retail prices will become by the time the "Easter Special" prices roll around.
With both Telstra and Vodafone promising 14.4 quickly followed by 28.8 mbps data over mobile speeds before the end of this calendar year or early in 2009 there seems very little doubt that the four mobile carriers are Hell bent on 'capturing' their 'fair' share of the data over mobile market and, based on both the size of the advertising spends and the ever lower pricing of the services they will cut a deep swathe through the current low end of the wire line based ADSL1 and ADSL2 user bases of other providers.
I would have said that this projection won't come about because if the prospective customers for these services actually comprehend what the 'fine print' says these deals are nowhere near as good as they look, but as I said, 15 years of mobile phone selling has shown that the majority of customers for such services don't understand, more probably don't care about, the ts and cs - only the head line rate.
I suppose there is an opportunity of 'bundling' other services (a la the current Optus ad) to actually drive up the margin like the requirement to bundle a telephone line at $34.00 a month (and people actually fall for that?) together with the sky high call charges that go with it or a similarly over priced mobile service.
But Exetel has never done business that way - so it's not something we can consider. I did do some work on how additional services could be bundled in to a data over mobile offering but, at least to date, all I see is a month by month reduction in the prices offered by the mobile carriers themselves so that any 'plan' I could come up with 'today' would quickly become pointless as the ongoing war of attrition is fought out over the balance of this year and on in to the future.
As long as their war is being fought out there appears no likelihood of any wholesale opportunity becoming available as the carriers themselves will be able to sell/give away as many services as their provisioning systems and personnel can deliver and their network structures can support. The situation I referred to of continuously lowering of prices for the services makes any wholesale concept pointless - in fact maybe the Americans currently running Telstra are correct in forming the view that wholesale is to be avoided if regulation doesn't force you to do it - at least in the Australian communications industry.
I will, have to, continue to look for a way of providing mobile data services but I'm no further advanced today (in real terms) than I was when I started over 18 months ago. Talk about fruitless exercises.
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So (as with Richard Kimble) "the search continues".