John Linton
Maybe it's the miserable day outside, but when I was making some changes to the Exetel business plan spreadsheets earlier this mornng I started reconsidering the likely investments that Exetel will, almost certainly, need to make over the next 12 months and the thinking that is driving the needs for those investments.
I suppose ever since the 'full privatisation of Telstra' became a reality and the subsequent appointment of the new senior executives, significant doubts were injected in to concepts of Telstra, and therefore other infrastructure owners, 'wholesaling' access to their infrastructures. I realise that, all round the Western world, all major infrastructure owners whoesale their base services but, at least it appears to me, that in Australia over the past two years the major carriers seem to regard their wholesale customers as enemies rather than customers.
In the case of Telstra (easily the most influential of the Australian carriers) the Telecommunications Act and the ACCC provide a fairly unambiguous scenario for 'enforcing' wholesale access to various 'declared' services. At least that's currently true under the current government - what may happen under a different government remains to be seen. However the current Telstra senior executives make no bones about their view that wholesaling is not in "their shareholders best interests" so whichever way subsequent attitudes go there is no certainty in the future provision of wholesale services from Telstra.
There isn't much joy coming from the other largish carrier - Optus - whose commitments to a wholesale operation have never struck me as wholehearted (yes, despite all the claims to the contrary over the years) and the 'evidence' over the past 12 months simply confirms my personal view on that key, to Exetel, issue.
I understood, at least I think I did, the rationales used by the various ISPs who have deployed their own equipment in Telstra exchanges in an effort to free themselves from the Telstra monopoly on last mile access to residences and businesses. As far as I can see this has only made Testra's management even more committed to rendering those investments financialy unviable as soon as possible by deploying newer technolgy that will allow Telstra to send the current copper network the same way they are sending the current CDMA mobile network. Of course that will take time but it seems a clear indication that great caution is needed in basing any long term future on the current copper network.
So, the negative thoughts exercising my mind this miserable morning, centre around what dependencies Exetel can afford to leave in place moving forward?
If I could sign a long term contract on access to a 3G network or a viable WiMAx network then that would be the best solution - but, after a year of investigation, that seems as far away as it ever did.
Wireless will provide a way forward for our current capital city business customers and maybe a combination of wireless and business grade DSLAMs in the CBDS and major business areas (similar to what XYZ and RequesDSL did 6 - 7 years ago) would be as sensible as it gets, given the current doubts and concerns.
We have to make these decisions sooner rather than later and, given the very serious doubts I now have about the current wholesale arrangements remaining financially viable for too much longer, I am beginning to feel 'backed in to a corner' in terms of the longer term options available to a company like Exetel.
Investing $A32 million in SX and another $A5 -$A 10 million in local infrastructure would radically change Exetel and I'm not sure we are ready, or able, to do that right now.
Was that break in the clouds over the harbour just then?....maybe just wishful thinking.