John Linton .....even though it's Father's Day and a Sunday.
Some kind person sent me a PDF of the flyer that TPG are apparently letter boxing in the buildings that Pipe have run fibre into and also directed me to the web site that has more details. As anyone with more than two brain cells to rub together would have realised TPG would use Pipes fibre to 'retail' data services to Pipe's "old" wholesale customers to compensate, and accelerate the process of losing Pipe's old wholesale customers.
To put it in perspective:
TPG is offering 100 mbps fibre to 'retail' customers for $599 install and then $500 per month for 24 months
Pipe/TPG offers 100 mbps to fibre to Wholesale customers for $1,750 install and then $1,250 per month for 24 months
......yes, that will really work to ensure that TPG loses all of the Pipe wholesale business as soon as the contracts reach their end dates. However as this was always going to be the case it really doesn't matter that much as, I would have assumed, that all of Pipe's wholesale customers would have planned to move elsewhere as soon as it became clear that TPG was going to buy Pipe back in 2009 - I know we have transferred 60% of our small ($50k per month) spend to other providers and will move the balance by the end of this financial year as the contracts expire.
It's the same old problem of providers retail operations competing with their wholesale customers - you just can't do it unless its on a commonsense basis - which this sort of offering by TPG obviously isn't. It will pose Exetel a few problems in the immediate/short term but nothing truly 'life threatening'.....at least I don't think so. Pipe didn't/don't have that many buildings 'fibred' which means that not very much of Exetel's target markets are affected. Looking at the flyer, it is written by a very residential oriented person(s) and if that carries through to their overall selling processes and people the really good price won't survive the rigor of a business/corporate sales cycle. However it's a new approach to a market that has been characterised by ridiculously high prices for very little value for a long time and will doubtless 'ruffle some feathers'. However that, of itself is not necessarily a good thing.
The 'feathers that will be ruffled most' will be those of Telstra who has, by far, the largest percentage of the business and corporate data market and who have by far the highest prices in that market - they have 'old' pricing still operating in that market that is ten and twenty times higher than the pricing being proposed by TPG now. As TPG has taken the most retail ADSL customers from Telstra I would imagine that this new initiative by TPG will ensure that Telstra takes particular notice of how it may deal with TPG's "depredations". The problem, as Jonathan Swift once detailed before Australia was 'discovered', with being the most noticeable prodder of a sleeping giant is that when the giant does eventually notice it tends to all end in tears for the 'prodder'.
Exetel, like all the other providers of communications services, knew this would be what TPG would do and we, like I assume all other companies that might be affected, would have put in place their various different processes to deal with such an expected use of Pipe's assets. Hopefully we have worked out how to deal with such issues (from TPG or from any other company) sensibly enough to be unaffected in the areas where Pipe fibre exists - if we haven't we will have to think again.
What a great way to start 'Father's Day'.
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