John Linton I realize that HSPA hasn't really 'happened' yet - either in Australia or the rest of the world - in terms of being, or even becoming, a serious competitor to ADSL. But the signs of very significant changes to the ways that data is delivered to Australians are becoming more and more apparent - or it looks that way to me. The brief announcement by Vodafone that it was taking a major stake in Crazy Johns might be just a major mobile carrier buying in to a retail distributor of its mobile telephone products and services - that would make perfect sense:
http://www.itwire.com/content/view/20448/127/
Similar to the Optus buy out of its distributor Virgin Mobiles last year or something like that.
Of course there's always the possibility that the VMS agreement between Vodafone and CJs is falling apart necessitating a bail out but if that was the case then you would have expected some minimal reference to such a scenario.
Crazy Johns also owns a 21% interest in PeopleTelecom which you would have to think it didn't acquire for 'synergies' in mobile telephone sales (I would have thought that CJs has 100 times bigger mobile sales revenues than PT ever did) but because of PTs wire line and internet businesses......and this raises an interesting 'conflict of interest' as PT has recently signed an extension of its "whole of business" supply agreement with Telstra and it's not exactly a secret how Telstra regards its competitors such as Vodafone now having access to its 'intimate pricing secrets' as well as whatever other 'confidential information' passes between Telstra Wholesale and PeopleTelecom.
Something to be sorted out and not germane to why Vodafone has bought in to CJs.
Doubtless CJs is a major, quite possibly the major, reseller of Vodafone's HSPA service over mobile telephone handsets and via PCs and Desk Tops. Obviously CJs provides the benefits of its buying power of these services to PeopleTelecom and equally obviously HSPA will continue to erode the low end ADSL user bases of both PeopleTelecom itself and every other ISP in Australia (including the supplier to the vast majority of low end ADSL customers in Australia - Telstra/BigPond.
I doubt that any provider of HSPA in Australia has overlooked the fact that the biggest market for HSPA is Telstra's dial up and low end ADSL user base - it's sort of blindingly obvious even for the twinks that run marketing programs within the mobile carriers - and therefore perhaps Vodafone is putting in place a far greater retail presence (CJs) together with a far greater 'professional' presence - companies currently involved in selling and supporting ADSL services. While PeopleTelecom is now probably close to being the smallest of the surviving ISPs it nevertheless from Vodafone's view point has an attractive business and residential user base of telephony services and support and processing capabilities that Vodafone wouldn't have in place yet.
So if I was a mobile carrier preparing to make a major effort to convert the Telstra dial up and low end ADSL users (I have no real figures but would assume there would be over 2,000,000 of these users) who are paying way too much for way too little to Telstra then I might come up with a proposal to buy up some 'in place' ISPs and give them the cash and abilities (read low priced access to their HSPA services) to make a concerted 'attack' on Telstra's low end user base before Telstra can bring themselves to reduce their HSPA prices enough to protect that 'hung out to dry' lucrative revenue/profit contribution.
Telstra would have trouble, as any multi service carrier would, because to meet the 'attack' of a non multi service carrier (which both Three and Vodafone are) they would have to butcher an awful lot of margin within their own current customer bases whereas Vodafone doesn't have that problem and can 'swing the pricing scythe' with total freedom. A happy thought if you're Vodafone - a terrifying concept if you're Telstra.
Right now HSPA is overwhelmingly being sold through shop fronts either belonging to or franchised by the mobile carriers. Only recently have 'ISPs" begun to offer the service and they are, almost totally, simply reselling the carrier's plans at Layer 3 and almost overwhelmingly aiming the HSPA service as an ADSL replacement to the mid range user (4, 5, 6 + gb of data) which, in my opinion, it isn't yet. However that can, and almost certainly will, change and the 'support' processes needed to take over a 'data' user are already in place at reasonable sized ISPs but simply aren't part of a mobile shop front's go to market strategies - and, as anyone who has tried to do it knows, putting in place supportĀ for low end users is not an easy or cheap thing to make happen.
Will there be any dial up customers left by 31st December 2009?
Will there be any ADSL low end customers left by 31st December 2009?
I wonder what Telstra's current business plan shows?
Nice to be able to start the week on the other side of that possible scenario (thank goodness we were too chicken to invest in ADSL2 infrastructure last year).