John Linton
......the ONLY reason that Telstra would "reduce prices" to every other ISP's 2006 levels.
I read the announcement by Telstra BigPond that it had reduced prices to correct its over charging in this article:
http://www.telstra.com.au/abouttelstra/media/announcements_article.cfm?ObjectID=46084
and thought that some of the 'announcement' revealed more about the state of the broadband market than Telstra wished to do. It seems clear, at least to me, that the decline in Telstra's ADSL business that was evident in their FY2009 annual report has not only continued in to the first five months of FY2010 but has accelerated with Telstra continuing to lose the market share it so expensively bought with its raft of 'promotional' offers over the past three or so years. All it has really done now is to make the 'promotional offers' its 'list prices' - and these 'new list prices' remain far more expensive than any other broadband provider in Australia and, as usual, have so many 'strings' you actually wonder why they bother.
Telstra apparently thinks that the broadband market has "suddenly changed" and people don't use ADSL for email and browsing but (stop the presses I have a scoop) people now play on line games and download movies!!!! Good Heavens Holmes - this is amazing! Sometimes I wonder what it must be like to work at Telstra and continue to have to adjust to the Orwellian type levels of Newspeak and ignore all obvious signs of reality so that the words that come out of your mouth reflect the unreality of Telstra's public utterances which need careful control so that you appear to believe the sort of nonsense that is contained in Telstra's public statements that vary so much from the actualities they address.
Skim reading the "new" pricing on offer it seems to me that only a complete fool would select a broadband service supplied by Telstra and that complete fool would have to be a wealthy complete fool to pay at least double the price of acquiring a broadband service than is available from practically any other broadband provider......but all that means is that nothing has changed.....you always had to be a complete fool to buy from Telstra.....so you really have to wonder what has changed by announcing these new plans? Practically nothing other than Telstra have readjusted the weasel words they use to attempt to obfuscate the fact that they charge very high prices for very, very little. I doubt that these 'new plans' will stop their market share decline and all they are is a new level of prices to be heavily discounted from in a new round of 'special promotional offers that, presumably, will start by their telemarketing contractors this weekend.
It will be interesting to see what level of uptake the various ISPs report to the ABS at the end of December - as it seems that from the little 'publicly available information' that it isn't only Telstra that has experienced a drop in ADSL customer numbers. I only say that because I look at the 'churn in' versus 'churn away' numbers to/from Exetel as a guide to what may be happening in overall terms and those two numbers have shown a continuous 'improvement' each month for the past five months despite the fact that we have now raised the 'churn in' price from zero to its highest ever level over the past two months....we tend to use the cost of churn/activation as a crude 'braking mechanism' control over the order inflow for ADSL. Those figures won't be available until early February though. One indication of how the larger ISPs are doing will be to see if they make adjustments to their own plans after they 'digest' what if any impact the Telstra announcements will have - my guess is that they will simply laugh and take no action at all. We will not be taking any action (though it might be sensible to add 100gb and 200 gb plans just to show what should be paid) and our ADSL sales are very healthy and have met our planned numbers for each of the first 5 months of FY2010 and are up 20% on average from the same months last year.
The residential ADSL market will be interesting to observe over the next few months to see whether the decline in 'take up' continues or whether the combined efforts of the ISPs that are dependent on revenue growth from ADSL find ways of arresting it. As I estimated some six months ago - the prices paid by end users will continue to fall (at least in terms of gb per dollar) as the decline 'bites' and the enthusiastic estimates of the "well respected experts" (and the predictions of growth in the various company's annual reports) confronts the realities of wireless growth and a need to reduce ADSL prices as competitors try and shore up their FY2010 forecasts by trying to make their services appear more competitive.
At least no-one will have to worry about Telstra becoming a threat by introducing more competitive broadband offerings - based on their latest announcements.