John Linton .....indicating all is not well in communications land.
It has been a good week in terms of sales across the whole product range and with 7 weeks of the new financial year now 'complete' our planned targets appear to be sensible so far. While it's far too early to draw any conclusions it seems that this year is a little easier than the equivalent period last year.........which made me quite puzzled when I read this yesterday:
http://www.smh.com.au/technology/biz-tech/internode-blames-telstra-for-price-hike-20110818-1izb3.html
It was a very strange piece of reporting, assuming it was accurate - almost Red Queen like in its self contradiction. As the Telstra spokesperson correctly pointed out - how can any decision by Telstra Retail cause Internode to RAISE their end user prices? A company of Internode's size and type only raises prices when it sees it's cash flow declining....or it wants to get out of a certain market(s). It has nothing to do with a supplier of services who, also pointed out, hadn't raised its costs to the wholesale customer as Internode tried to allege "in some areas". I can't possibly know what Internode's buy prices from Telstra Wholesale are but I do know that Exetel's buy prices have significantly fallen over the past year and not a single aspect of them has risen....I would seriously doubt that Internode has seen any other pricing scenario.....there would be absolutely no reason for that to be the case.
My take on this latest 'dummy spit' is the same as the nonsense Internode made of their NBNCo pricing which cited excessive cvc charges as the reason their prices were so much higher than anyone else's were or were going to be. That particular sham was immediately exposed when the NBNCo cut the draft cvc prices (as everyone with two brain cells to rub together knew would happen - including Internode) but Internode made no change to their announced NBNCo pricing after the cvc pricing was reduced by 75%. Short term memory loss just doesn't cut it. Why is Internode raising prices? Because their operating costs are far too high and in a stagnant marketplace (for ADSL and telephone voice services) their 'model' is badly broken now and may well be totally wrong for the future. Whatever reason may actually be the case, blaming the actions of Telstra Retail (which as far as I can see haven't changed pricing for two plus years) for such actions is the sheerest nonsense - completely refuting any kind of logic or common sense.
But that silliness was only one aspect of the 'chiller winds' blowing through the bloated personnel levels of many Australian communications companies at the moment. We continue to see our suppliers reduce personnel levels across many parts of their businesses. The results of these reductions doesn't affect us so far with the exception of one provider who cut too deeply in their corporate support operation resulting in telephone wait times of up to an hour in telephone wait times and a level of 'expertise' that was lower than a new residential support trainee. I have little doubt that similar levels of 'cuts' are occurring across the industry as the new recession looms ever closer and revenues attenuate. Adequate, let alone more than adequate, staffing at communications companies is going to be a real concern over the next twelve months. I think companies such as Internode are going to find those difficulties harder to address than most.
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