Friday, August 13. 2010Reporting Season Is Always Interesting....John Linton ....it is the only moment in the year when some form of truth (as long as you only look at the figures) replaces the rest of the year's flood of mis-information. The ASX reports by Optus and Telstra yesterday made interesting reading - Telstra reporting a fall of almost 5% in annual profit and Optus reporting an increase of 22%. Telstra ascribing much of its fall to a loss of some 325,000 wire line customers: and Optus ascribing its very, very strong growth to significant increase in mobile customers and very strong growth in mobile broadband. Vodafone had previously reported very strong growth and attributed 40% of its mobile revenues to data services. While I realise that taking a simplified set of numbers at one point in time isn't all that indicative of what might happen in the future it IS some real facts among a huge amount of wild and uninformed speculation about the viability or otherwise of the 'NBN2' and the obvious ignoring of directions of communications technology use in Australia. Take the unequivocal and simple statement by Telstra that over the past year some 325,000 residential premises turned off the wire line telephone and, presumably, substituted that telephone usage for mobile. (bringing the percentage of such residences to around 12% and growing at an inceasing rate). Apart from the damage those actions did to Telstra's profit in the last financial year what does it mean? One of the things it could mean is that people who rent on a short term basis no longer see the expense of activating a telephone as being cost effective since they use their mobile for making the few telephone calls now needed in many people's lives. What do those people do for internet? Unless you make the assumption that they don't use internet while they are at home you would have to conclude that they also use their mobiles for internet services. Both the US carriers and Vodafone in Australia report that data revenue now accounts for more than 40% of total revenue from mobile services and that they expect that percentage will increase to over 50% in the first half of calendar 2011. Is it likely that such a strong and obvious growth trend will stop at 50%? I would have thought that was highly unlikely and that the trend for mobile users to increase their mobile internet use will continue to increase. What does that mean for wire line ('NBN2' fibre)? According to the Australian communications media and the no-nothing commentators generally (who seem to be now suggesting that the national 'NBN2' will deliver 1 gbps speeds before a spade has hit the ground in anger) wireless will never be a serious medium to deliver data to residential customers of internet services. I wonder how they explain away Telstra's figures of a continuing increase of residences without land lines and the continuing increase of the use of mobile devices for internet usage? I mean - they seem to be actual facts showing trends that are undeniable. What "fact" is offered to support the view that "wireless will never be suitable"? None? Wishful thinking? Nonsensical statements pulled out of wherever nonsensical statements are pulled from? Maybe more people will begin to question those statements over time - but given the general and overwhelming stupidity of people who make such comments - perhaps not. It seems likely that all of the mobile companies in Australia will continue to offer faster mobile data services at ever lower prices and that more rather than less people will see the wire line financial mill stone at its ever increasing prices something their personal budget neck would be better off without. Why pay $A30.00 or so to make a few voice calls (at ridiculously expensive prices) when you have no need to other than it allows you to pay even more money to get access to the internet? 12% of residences don't see any need - it seems likely that percentage will only increase. The unbuilt 'NBN2' is being aimed at an increasingly smaller market. Copyright © Exetel Pty Ltd 2010 Trackbacks
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It's time for you to sit on the Q&A panel with Tony Jones and enlighten the so-called experts.
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IPTV seems to be growing rapidly. I too prefer to watch at times convenient to myself.
I wonder if there is enough wireless bandwidth for IPTV to become dominant. Fortunately we can provide additional fiber capacity indefinitely Comment (1)
Great, so the government can rename NBN2 to "National TV Network". The FTA channels can all be delivered through fibre cabling for our televisual feasting.
That in turn, will free up a lot of radio spectrum for other uses. Comment (1)
I understand that you like to watch TV whenever you want, IPTV & watching previous episodes on the channels websites is great. But do you really need 1Gbps for that? I can watch it comfortably on my ADSL2 link as well.
Do you think it's wise to have a government spent over $2000 per person (living in this country) to enable this? An average of about $6000 to $8000 per household! What a waste of tax payer money (on top of the money wasted on $900 handouts, insulation, BER, etc. etc.) Comment (1)
"Fortunately we can provide additional fiber capacity indefinitely "
Who is we? Where does this cargo cult mentality come from that assumes the cost of infrastructure doesn't require a commercial return and that if there was a commercial return why wouldn't the carriers outlay the money required? Why should a federal government make entertainment any sort of spending priority using tax payer's money? Comments (2)
There are a couple of interesting points and some things in the background of this blog that are worth considering.
Firstly, it seems to me the argument for the NBN2 is based on high bandwidth use. However this goes beyond what is currently used by most people. It can't be justified by current need and invariably resorts to some projected need based on few facts. It may bring about innovation, but it is a big cost on the community for such a hypothesis. Secondly, the issue of renters is also interesting. Typically they represent 30% of the market. Will they take up fibre? I'm not so sure. Lastly, there are a few things a wire line gives that mobiles & wireless don't give. I've outlined them before but concede that only a small percentage of people understand or want those advantages. If NBN2 takes that away, I'll go whatever is cheaper (taking in all costs). Personally I think most I've read about NBN2 come from people with some kind of partiality - including political through to just excited geeks. I haven't seen an economic market model that justifies the NBN2. It seems to be all talk with little justification. Comment (1)
I wonder if the NBN2's sudden upgrade to a Gigibit network had anything to do with a 100M network not sounding significantly better than what the opposition were pitching
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Serious question: Does that Vodafone 40% include revenue from SMS?
Non-serious Question: Why doesn't your Tasmanian fibre offering include a 1Gbps option Comment (1)
Was just reading the latest Telstra reports myself. Some interesting things to consider:
Retail PSTN revenue down 8% Retail PSTN services down 257,000 Retail Internet revenue down %1 Business PSTN revenue down 7% Gov/Corporate PSTN revenue down 7% Wholesale PSTN revenue down 12% Which taken at face value seems to suggest wireless is replacing fixed line. But the strange thing is that the drop in revenue in PSTN is consistent in retail/business/corp+gov. Retail might be changing to mobile, corporate might be changing to VOIP, but there isn't any evidence of large changes in the business market that I know of. Then we get this information from Telstra Wholesale: PSTN resale declined by 32,000 DSL resale declined by 106,000 ULL lines increased by 133,000 LSS lines increased by 155,000 So that's a net increase of 182,000 internet wholesale lines. Some of that increase would have come from Retail, but why did internet revenue only drop 1% then? Perhaps people with PSTN/no internet changed to mobile? Comment (1)
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