John Linton
.....and then there's the world everyone else lives in.
Exetel have been, slowly, replacing some of the inter-State back hauls that are provided as part of the bundled Optus ADSL1 services with dedicated leased back hauls provided by Pipe and now NexGen.We would have liked to have had one back haul provider but that proved to be not possible as neither Pipe nor NexGen provide infrastructure to the locations we want to eventually put in place. So, knowing it was going to be very expensive we asked Telstra for a quote for an all State and Territory capital city back haul service.
I suppose I should have looked at the published Telstra CRA for Long distance Ethernet before wasting Telstra's and our time in looking into this option as when the pricing came back it was approximately 4 times the cost of using either Pipe or Nexgen. I have no doubt that the service provided by Telstra is 'better' but what I don't understand is how it's possible for any commercial business (ISP or bank, insurance company, airline etc) to provide viable services if they have to pay such costs.
I suppose the short answer is that many don't; they get large Telstra discounts or use Pipe, or NexGen or UEcomm or Optus and whoever else provides such services. So who pays Telstra these prices? - clearly enough organisations to make it worthwhile for Telstra to have a standard price list for these categories of services - if only to discount from for suitable customers.
It's quite obvious that Telstra has more fibre between all these cities than all other suppliers combined and therefore have a better 'economy of scale than all other providers - by a very, very wide margin. Therefore the cost to Telstra must be lower per gbps than for any competitor. So what explains the 4 -5 times cost per gbps?
Reliability of multiple redundancy? Some sort of case could be made for such reliability but it would be a percentage increase not a multiple of the cost of other supplier's services - or so I would have thought.
Perhaps it's simply a reflection of the pre-1992 days when a long distance call to the USA cost $2.20 a minute via Telstra and then an AAP rep 'knocked on the door' and offered us calls to the USA at $0.60 cents per minute - reducing to less than 10 cents per minute less than 3 years later.
Or before Optus established their alternative to Telstra mobile service in Australia and suddenly mobile handsets dropped from over $1,000 to less than $300 'over night (before quickly becoming 'free') and per minute costs dropped by 75%.
Or.....but then of course you know why that happened - what changed was that Telstra had to 'compete' as customers began to get a choice on various telecommunications services and, slowly, some Telstra customers of those days began to exercise that choice.
So now anyone in Australia can make untimed VoIP STD calls at 10 cents and can call dozens of international destinations for 2 cents a minute or less and you can get 60 gb of high speed internet for $50.00 a month.
De-regulation did achieve massive savings for residential and business communications services users in Australia.
It's not a unique Australian experience - it is repeated all over the world in those countries that decided to open their telecommunications markets to competition by removing the monopoly of the national telephone provider.
What appears to be unique in Australia is that we appear to be on the threshold of becoming the only (of course that may not be the only in the future but it will certainly be the first) country in the world to start to re-regulate the telecommunications market courtesy of the current 'biddable' Labor 'federal 'government'.
I said yesterday that it may not be such a bad thing for Telstra to build out a new fibre network even though it meant that everyone would pay far too much for services on it. I still think that's a realistic view - however, I forgot what the following natural consequences of that inevitable with this 'government' will be. I understand that the G( will also bid and that Optus will also make a separate bid (apart from being part of the G9) but it seems impossible for any other company (Australian or international) to make a sensible bid in the time allowed.
What are they?
Within five years Australian will be paying more than treble for all communications services than the Kiwi's will because Helen Clarke and co have a far better understanding of what is good for their citizens and their businesses in terms of how to manage deregulation of their telecommunications industry than those Labor loonies in Canberra have.
(of course every other country in the world is doing what Helen Clarke is doing, or they've already done it - so just who's got it totally wrong?).