John Linton
.....because I think there's a bit of a conundrum beginning to develop.
As anyone who has a vague interest in the Australian economy knows all publicly listed companies report their last year's financial results between about now and the end of September and, like the 'literary' community waiting for the Booker prize results in the UK, the Australian business 'community' rediscovers its interest in fiction as an art form. It's not so much the actual figures that are 'fictional' but the words used to describe the actual situation with the company and the circumstances that pertained to the 'achievement' of them in their annual reports and in their 'investor briefings'.
The key, by daylight to a dying match, to understanding what is actually happening in the Australian communications industry is looking at what Telstra achieves as Telstra accounts (according to who you listen to, for around 80% of the total profits made from the provision of communications services in Australia. Obviously the last public report on Telstra's progress in the current financial year was delivered by the late, and totally unlamented, El Sol and in case you've forgotten what was 'said' you can find it here:
http://www.telstra.com.au/abouttelstra/investor/docs/tls666_shareholderupdate.pdf
One of the things that Telstra can't be criticised for (at least as far as I know) is the accuracy of the figures it provides to the ASX so in a few pages you can see the basics of the whole industry - pretty much (ignore the 'industry/general comparison charts at the end - they are pure 'spiv spin' and completely irrelevant to anything other than to attempt to obfuscate El Sol's non-performance).
So the key figures, at the half way point of the year are whatever you decide but I would suggest that some important ones could be the estimated overall revenue growth for the year of something less than 6%, but the huge growth in ADSL revenue of 30% for the half year and the less stellar (but still respectable) growth of HSPA customers to well over 800,000.
Now, when Telstra and the other comms companies report their full year results it is going to be fascinating to see which companies compare their ADSL growth revenue/customer figures to Telstra's possible 30% growth over 12 months (assuming that is what it turns out to be). I know Exetel, which had a very good year and being so small still has very big growth because of it low base, certainly didn't reach 30% and Telstra is the largest, by far, ADSL provider with the great difficulties size makes on double digit growth let alone a growth rate of 30%. It's unheard of.
I have no idea what the ADSL market grew by over the F2009 period but the ABS statistics in January were indicating an overall growth of something like 12% (depending on the credibility you ascribe to those numbers - personally I always think they are almost certainly overstated). The new ABS numbers will be published within a few weeks but they are unlikely to be much different you would have thought - they never have been.
So If BigPond grew by 30% for the year and the total ADSL growth is going to be 12% (according to the ABS) then it means that all other ISPs, collectively must have lost 6% of their customers - or some revenue adjusted figure in that ball park. It will be very interesting to see which ISPs claim to have grown by the ABS average of 12% (or whatever the figure is) or if, as I suspect they will all claim greater than average growth where on Earth did Telstra's growth of 30% come from?
Also, and I understand my math is ropey but this is just a heads up, if Telstra's ADSL revenue grew 30% and their previous market share was 50% then, even allowing for the higher average price of ADSL2 (which is no very much for Telstra) then shouldn't their annual report show their new market share at over 60%?
Does Australia really need an ABS that gets some basic figures so very, very wrong?
Or is the more likely explanation that 'some' public companies get a little careless with their non-audited non-financial figures?
Tough call.