John Linton
I read the most recent AT&T financial results with more than usual interest earlier this morning. A summary of those results is reported in the SMH and an on line version of that article can be found here:
http://news.smh.com.au/att-1q-profit-up-22-percent-on-strong-wireless-growth/20080423-27xw.html
Three comments caught my eye particularly:
"The wireless division added a net 1.3 million subscribers, for a total of 71.4 million, even though it lost 330,000 subscribers due to the shutdown of an older network. Revenues were $11.8 billion, up 18.3 percent from a year earlier. During the quarter, AT&T spent $6.64 billion for spectrum licenses it will use to expand its broadband services."
and:
"AT&T started raising prices for DSL service by $5 per month in February, and those increases are spreading across the service area, but demand is still "solid," Lindner said."
and:
"The company said last week that it plans to cut about 4,600 jobs, or 1.5 percent of its work force, to shift resources from the traditional phone operations to growing parts of its business, like wireless."
I suppose it puts Labor's/Australia's proposed FTTN project in perspective when one, of many, US carriers spends almost as much money in a single three month period to add wireless broadband spectrum than the FTTN project is 'budgetted' to spend in five years to put some more wire in the ground - oops, sorry, fibre it just terminates on wires.
However the fact that AT&T are increasing their emphasis on both money and financial investment in wireless (while continuing to acknowledge that their fixed line business continues to 'migrate' to cable and wireless) and the fact that they feel able to increase their broadband prices across the board in a market that is fiercely competitive, again, seems to emphasise that a large part of broad band's future is not going to be related to fixed wire implementations - at least in the USA.
Exetel continues to struggle to put in place a wireless data service and we continue to take one step forward and then gradually slide back to where we were, just as we have been doing for over 18 months now. It would be nice to operate in the USA where AT&T (who obviously have real competition from Verizon, T-Mobile, and Sprint/Nextel and provide realistic Wholesale/CLEC pricing because they, like the rest of the world, understand that wholesale is a sensible and profitable part of doing business.
I believe Exetel will be able to begin offering a data over mobile service in the not too distant future which will be suitable for a business user who travels and, if that works out, we would be able to offer a data over mobile service that would suit some residential customers early in FY2009 - and I realise I have thought this would happen several times in the past 18 months - only to have been proven incorrect.
It seems, at least to me, that the mobile carriers are in easily the best position to provide usable speed data/internet services to all Australians outside the capital cities and for a fair percentage of Australians who live in capital cities. Their mobile phone networks are 'mature' - in the sense they have been built over more than a decade and are robust enough to provide virtually fault free service all of the time. Assuming that the 'spectrum' and back haul issues continue to be addressed then its easily the most obvious solution for general residential use.
Will there ever be sufficient 'spectrum' for very high speed data and large download allowances at realistic prices to be provided remains the only issue likely to mitigate against wireless becoming the data service of choice for all non capital city dwellers in Australia.
I think the AT&T first quarter report adds emphasis, if not impetus, to the need for a small company like Exetel to forget about a 'wired future' and find a truly viable wireless data service solution.