John Linton
Earlier this morning I finished reading, and then re-reading the various press reports flowing from Telstra's 'briefings' last week. As you would expect from what different journalists (and then their sub-editors and editors) write about what they hear and what they read in the handouts there are more than a few anomalies and the statemets by the head of Telstra Country Wide seem, on two key points to directly contradict the Telstra CEO's comments on the previous day.
Much of the lack of clarity would be because Telstra, like Optus et alia, is indulging in pre-tender 'sabre rattling' and therefore the statements made in that context are completely meaningless - probably all of the statements made last week by different Telstra executives are completely meaningless in any context as they aren't known for disclosing their real plans - as is entirely their prerogative.
Two things caught my eye though. One was the statement, not validated and probably not even anything but an off the cuff throw away, by the CEO that he expected mobile broadband revenues to hugely expand and within three years exceed those of wire line broadband - its such an unlikely view that it must, almost certainly, have been mis-reported......but the more I think about it the more sense it makes. We still can't find a sensible way to offer data over wireless though we keep looking and will continue until we find a sensible way of doing it. I think that Exetel's long term future will be in providing residential services over HSDPA and business services over Ethernet in the CBDs and major business suburbs and we must remember to keep our eyes fixed on those twin objectives.
The second thing that caught my eye was in the 'analysis' of the various comments by Testra, other parties and the new Government. This was the speculation about Labor actually trying to carry out it's often stated view (and constant criticism of the previous government for getting the sale of Telstra so wrong in the first place) of using the proposed federal funding of a new fibre network to legislate for the break up of Telstra into the three parts it has said for the past ten years should have been done in the first place:
Network Infrastructure
Wholesale Sales
Retail Sales
In its doctrinaire/union strictured phase of government it is more likely than at any future time that it could seriously consider doing what it has said should always have been done - and many competent commentators originally agreed with that view including our neighbours across the Tasman and, despite Telstra's statements to the contrary, most other OECD countries actions around the world.
It's hard to see, after all the tub thumping and rhetoric subsides, how any government could hand over $A8 billion to a 'private' company or group of companies without actually requiring a very big 'say' in the subsequent 'disposal' of what that money buys. After Telstra get over their current phase of "under no circumstances will we ever........"; and gratuitously insulting the current government in the totally inappropriate ways they insulted the last government, (though I think that's just for show and we will see a much 'meeker' approach after the first 2 - 3 weeks of going through the motions of pretence) reality has to kick in.
Reality = Massive Federal Government Investment Will Entail Federal Government 'Control'.
Of course the Labor government could hand $A8 billion to Telstra and eliminate the tiny bit of competition that currently struggles to exist in gratitude for the Telstra campaign donations but would it win the next election if it did that? ummm....who knows.....but not really worth risking it.
So Labor has a tough set of decisions to make (assuming they aren't going to back down from ten years of intense criticism of the previous government) and they have $A8 billion to make their decisions stick.....though any sensible ball park estimate would seem to indicate that 4 or 5 times that amount will be needed.
Which ever way they 'jump' I think its sensible to have a contingency plan for a move away from ADSL over copper relatively quickly once the tender process becomes a reality.....though I'll give long odds against anything actually happening as long as El Sol and his pals still control Telstra.