John Linton
.....like these - when the clearly financially untenable 'NBN2' continues to make wheels spin in so many aspects of the communications
industry.
I read with amusement during the flight from Sydney to Singapore that the rumours were starting to rapidly grow about how much of 'NBN2 Co' Telstra would want to buy. I'm amused because the obvious answer is - "all of it".....should it ever become a reality. Telstra would, under current unthought out wing and a prayer statements from Krudd "only" be allowed to buy 49% of it. Big deal. The more things change the more things stay the same. What's the difference between the current Telstra monopoly owning 100% of the infrastructure in place now and Telstra the new monopoly owning 49% of the new infrastructure? (assuming that other bunnies can be found to invest in a company owned 49% by Telstra).
How much less control over pricing does Telstra have as a 49% shareholder than as a 100% shareholder? In commercial terms - very, very little = none. Telstra doesn't care how high the price is for other wholesaler customers for NBN access because as the major shareholder 49% of the profits on the sale of access go to Telstra therefore the price Telstra Retail buys at is irrelevant as it's automatically discounted by any profit the wholesale company makes - unless I'm mistaken that is exactly the position with PSTN today - Telstra retail pricing is cushioned by Telstra Wholesale's profits.
Well done Krudd - you con the public (electorate) with your chest thumping "I'm the hero who broke the Telstra monopoly" but then hand the whole shebang over to Telstra after the tax payers have funded the full infrastructure development. Only someone who is totally Krazy or totally stupid could try and make this piece of nonsense sound like a good deal to anyone but their shaving mirror. I look forward to reading how the Labor spin spivs attempt to make this sound like a good idea if the NBN actually proceeds.
Assuming that there ever is an 'NBN2' in the distant future Telstra will have achieved all of Trujillo's wildest expectations:
the Labor government will fund a new fibre network and will then give it to Telstra who will run it in the "best commercial interests of the shareholders" and will control the price of access to every other Australian communications company while ensuring that in the mean time it exacts an increased 'rent' for its copper infrastructure.
What a bunch of inept, unknowledgeable clowns Krudd and co make the late and unlamented Rex Connor look like Adam Smith.
The net result that we are seeing of the 'NBN2' (save Krudd's bacon) fiasco is, not unnaturally, a 'slow down' (the gentlest word I can use and an understatement) in the roll out of new exchanges and the upgrading of current exchanges that have no more capacity for ADSL2 by our two suppliers. This was not unexpected so it hasn't concerned us too much as it forces us to put our efforts in to other areas of the business that don't have the restraints the 'NBN2' is imposing. I have mentioned we planned to more rapidly grow our corporate business (which is not, at least currently, suffering from Krazy Kevin interference). One of the most valuable 'assets' any company can develop is a first class sales force which we started to do in February of this year. It will be interesting to see how effectively this can be done and how quickly it can achieve the first goal of bringing in as much revenue as the residential services do now and will do in the future.
One of the purposes of being in the UK is to conclude an agreement which involves
selling Exetel's front and back end systems for something North of one
million euros which, in the event it is successful is money that would
become 'instant' bottom line profit for the Australian company and is
an indication of another 'service' that we have been thinking of
providing to other companies as part of our own 'GURUS" management
system. One of the benefits we are hoping to get from the Sri Lankan
company is a larger amount of highly skilled programming resources to
allow us to complete phase three of the GURUS development that will
make it a sensibly commercial offering.
Our other pre-occupation
is of course HSPA which we need to devote a lot more time and effort to
for it to achieve the very tough targets we have set for it and which
we, so far, have got nowhere near achieving. It will be important to
determine over the next week or so whether or not there is a sensible
way for Exetel to set up an HSPA operation in the UK and if there is
what benefits that would deliver to the Australian company.
So,
as anybody who has been in business knows - what you do when one market
becomes uncertain is you concentrate on one or more other markets.
(I wrote this on the flight and am sending it from the lounge at Changi so have had no time to check the draft)