John Linton ....to the current financial/credit problems affecting business worldwide.
I read this earlier this morning:
http://online.wsj.com/article/SB123193994047481129.html
and while I've lost track of the 'pecking order' in the giant communications equipment manufacturers - Nortel used to be right up their with Alcatel, Ericsson, NEC etc. I have known of and bought products from Nortel for as long as I've been associated with communications services and it's a sad day when such a company passes it's use by date.
So, perhaps one more sign of the times that even the telecommunications industry has stopped buying major equipment or maybe just that a 30 year track record of designing and supplying innovative communications solutions is not sufficient to survive in these interesting times. Size and previous reputation seem to count for nothing in today's financial 'maelstroms' based on this and other major company closures/'re-structures' over the past 90 days.
I also read this:
http://www.commsday.com/node/305
with a degree of bewilderment that after so many dozens (hundreds?) of failed attempts to offer "unlimited" broadband download services by so many different 'start ups' in so many different parts of Australia here is yet another one subscribing to the 'triumph of hope over experience' school of business management.
Now, I'm not saying it isn't possible - just that no-one who has attempted it in Australia (or anywhere else in the world as far as I know) has ever succeeded. I do understand that if you actually have control of your user - ISP connectivity bandwidth you are in a better position to provide an 'unlimited' service than if you are paying $50 - $60 per mbps to a carrier for such links but, unless I totally misunderstand the current status of back hauls in Australia there is still a cost and it isn't trivial.
Currently ISPs such as TPG are taking advantage of the much lower costs of customer back haul available by leasing your own dark fibre from companies such as Powertel and NextGen to offer huge 'off peak' allowances (though they seem to fairly heavily constrain the times when these are available). The cost of an ISP's own back haul is a fraction of the cost that, say, Optus charge Exetel - around $5.00 per mbps compared to around $50.00 per mbps (but this costing is heavily dependent on the 'arithmetic' used by ISPs such as TPG to depreciate the rest of the infrastructure necessary to carry the data - Black Diamonds, or even reverse engineered copies of Black Diamonds, aren't exactly 'free').
The 'cost' of a gigabyte of data is based on the cost of the customer connectivity plus the cost of sourcing the data externally or from cache plus a 'notional' cost for the amortisation of the rest of the network hardware and rental of floor space at exchanges and hubs. The cost of a megabyte of a gigabyte of data assuming optimal deployment (a fully utilized DSLAM chassis, 10 gbps back hauls that are well loaded and a high proportion of cached data is going to be somewhere between 40 cents per gb and 55 cents per gb (Exetel's costs are much higher than that). So an 'unlimited' broad band plan run over a very efficient ISP's own infrastructure simply isn't going to make any financial sense if the AVERAGE user downloads over 120 gb in any month. My personal experience is that most 'unlimited' users downloaded more than double that number. (I also doubt that this new offer is being run over such an efficient infrastructure but I have absolutely no idea what it is going to be run over).
So, another start up is going to offer unlimited broad band for $80.00 - and is going to "shake up the market". It will be interesting to see how long this lasts and if, with some new thinking and clever 'negotiation', it is going to be possible to accomplish.
I think two things always mitigate against such offers. The first is that only a relatively very small percentage of users wish to/are able to spend $80.00 a month on a broad band service and those that can ALWAYS astonish you with what they actually down load in any given period of time. My relatively long experience of being closely associated with broad band provision over the past 5 - 6 years indicates that NO amount of monthly charge by an ISP is actually enough to provide sufficient bandwidth to meet the needs of 'unlimited down loaders'.
So a strange start to the day - one of the famous names in communications files for bankruptcy while an Australian complete 'unknown' announces it will succeed in doing the impossible where every other entity that has tried it has failed.
Two very different views of where the world's and Australia's business outlook is at today.