John Linton
......in somewhat strange ways....but nevertheless......movement....and positive movement.
I was attracted by the headline on this article as I keep spending time trying to work out a realistic residential and business wireless broadband strategy and keep getting absolutely nowhere:
http://apcmag.com/telstra-unveils-19-for-1gb-next-g-broadband-prices.htm
$A19.00 for 1 gb seems to be a dramatic cut for Telstra and even after digesting the 'conditions' it still seems reasonable for a business user. However the big changes are in the higher usage plans which all provide data for around $A10.00 per gb (if you use the full allowance) and throw in a free modem on a 24 month contract (though fewer and fewer business users will need that as they almost certainly have an HSPA chip set built in to their laptop/notebook or a wireless modem purchased previously). The per gb rate drops to $5.00 per gb if a single business user seriously contemplates using 120 gb per month but I would have thought that was a rarity.....nevertheless a 5 cent per mb excess is now being offered for the first time to a business user which is a significant milestone for Telstra.
The quibblers will point out the lock in of a 24 month contract but for the sorts of businesses that deal with Telstra they are used to that and often sign longer contracts. Similarly the lack of a fixed Ip is not going to trouble them as they almost certainly wouldn't think it was something they could get and, as far as I know, Exetel is the only company to offer it as a standard feature for a business user. The other negative is the horrendously high excess usage charge which at $A250.00 per gb is truly excessive but, again, businesses that deal with Telstra will not notice and the simple remedy is to buy a higher plan if the user thinks they will reach the plan limit.
So all in all a leap forward for Telstra wireless pricing. Why would Telstra have cut prices? Usually only one reason - they are losing to Optus and Vodafone in this particular market and they have to be more competitive. The other, unlikely, reason would be that they have achieved a new economy of scale as they continue to rapidly add new wireless users. Looked at outside Australia Telstra's new business pricing is still two or three times higher than is available to small businesses in the EU and in the US. So, more likely, it is just one more shot fired in the 'wireless wars' and new offerings from Optus and Vodafone won't be very far away.
It isn't helpful for Exetel in trying to come up with a better wireless strategy but it adds some emphasis to the fact that wireless continues to get closer and closer to replacing ADSL at the 5 gb user level and with Telstra experimenting with 5 cents per GB pricing it is looking like wireless will become lower cost than ADSL at the 10/12 gb monthly usage range in the not too distant future which, as far as I can tell, covers more than 70% of current ADSL users. Telstra seems to be becoming more confident in the higher average speeds being achieved across wider demographics and that is something that will only continue to improve. Compared to 18 months ago a wireless user is getting two or three times the speed at half to a third of the price which changes end user buyer potential very considerably.
Despite the 'nay sayers' (all of whom seem to have same deeply vested interest in wishing wireless broadband would go away) claiming that "there isn't enough spectrum for wireless to ever be considered an ADSL replacement" the reality is that countries in the EU (and the larger States in the USA) have more wireless broadband users than Australia has wire line broadband users and although all of those locations have had 'hiccups' in their wireless capacity roll outs they provide more than adequate spectrum in cities such as London, Los Angeles, Paris, Frankfurt and Tokyo where there are almost as many users as there are in the whole of Australia. Doubtless, just as with the introduction of mobile telephony in Australia in the early 1990s, there will continue to be coverage and congestion issues, however the continued roll out and tower upgrading will produce the same results for wireless broadband as it did for wireless telephony....at least there is no current reason to believe that won't be the case....if you're over 15.