John Linton The financial news around the world seems uniformly bad with the exception of Russia perhaps ; where it is even worse. It showed up how disadvantaged Australia is becoming when we checked out of the hotel and, partly because of Sri Lanka’s high inflation but mainly because of the plunging international exchange rate of the Australian dollar, our per night stay cost us almost twice what it did four months ago – as did the taxi fare to the airport.
We are going to need more equipment for the planned Tasmanian PoP as well as to complete the ‘redundancy’ and onsite back up plans for the other mainland State PoPs and all of this expense, assuming we can now afford it, is going to cost more than 40% more than we had planned at the start of this financial year. I imagine that this scenario is going to be the same for everyone else in commercial life in Australia and almost certainly true for our suppliers – fortunately the majority of our IP bandwidth contracts are denominated in Australian dollars – not US dollars or we would have major problems.
It will be interesting to see what happens to communications service pricing over the time between now and Christmas. The rapid fall of the Australian dollar to date and the dire predictions of it continuing to fall to, perhaps, below 50 US cents before it recovers makes our investments in Sri Lanka more expensive,. Although, fortunately, the majority of the main costs have already been paid there are the ongoing costs of the premises rent and the personnel salaries – so the operating cost reduction exercise aspect of the Sri Lankan company set up will not deliver the planned level of reductions in the coming months – although they will still be substantial. So the falling value of the Australian dollar will affect us in this second way; as well as paying more in Australia for hardware and services dependent on hardware and US dollar denominated contracts.
I doubt that Exetel will be any more badly affected than any of the companies with which we compete and perhaps we may be a little less affected than some. It’s becoming a little more obvious that the communications marketplaces generally will be affected as the ongoing financial conditions become not only tighter but more obviously tighter to more and more people. While very large companies have the capacities to take advantage of these sorts of conditions almost all ISPs will not.
And then there's.........the NBN tender ongoing saga.
I don’t know whether TPG/SPT pulled out of the Terria bid simply because they finally see what most people saw a long time ago (that only Telstra could win that ‘tender’) or their current share price obliteration made it impossible for them to pony up their share of finance needed to fund the project in the unlikely event of Terria being awarded the contract. AAPT certainly would not have had the ability to contribute to funding so that means Optus, or rather SingTel would effectively fund the whole project with the 7 dwarfs along for the initial ride to project some sort of ‘solidarity’? Though maybe that word has as much relevance today as it does to Gdansk ship yards. Similarly the remaining five dwarfs wouldn’t have the ability to fund much more than their bus fares to Canberra at the moment and would be more likely to be looking at ways of refinancing what they’ve already committed to – or maybe that’s just me being unnecessarily harsh again – it doesn’t really matter – none of the dwarfs or Snow White are going to be faced with that major problem – and almost certainly never were.
So, back to the future – a Telstra monopoly on wire line communications across the continent after a few years of pretend ‘competition’. It would be laughable if it wasn’t so sad. I suppose krudd and stupid Stephen (actually is SS still minister for communications? – I don’t seen to have heard a word from him in the media for a very long time and my prediction was he was going to be given the old heave-ho by the end of this calendar year – which I made many months ago so it’s not another ‘fair weather’ claim.
I suppose the real question is going to turn out to be – “does anyone have the money to build a national broadband network”?
Or even – “does anyone actually want a national broadband network that runs at 12 mbps and won’t be completed until Australia wins back the Rugby World Cup”?
I’m writing this in Singapore on the way back to Sydney and SingTel seems to have its hands full in its own home base with a lot of money committed to various projects, almost all 3G in the very fast developing markets around South East Asia and according to the local news media they, and the people they are competing with are slowing down and even cancelling some relatively low priced and quick pay back projects due to the unavailability of financing at any price – let alone the terms the projects were originally tendered on.
Anyway – it’s not something that concerns me or Exetel as whatever happens is years away in the event it ever happens and what is very certain is that it will be a very different looking set of marketplaces and technologies by then.