John Linton
........all seem to be pointing South.
I don't really follow the progress of the EU telcos at all closely but I read this earlier this morning:
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=122537&source=APOnlinet
and I thought that it was another indication that carriers around the world are all reporting results that follow the same pattern - lower revenues and a struggle to make the same percentage profits as in the past with further indications that the future looks no better - at best. In Australia, and as far as I can see also in New Zealand, the same situation exists and the same future outlook seems to exist. Maybe I'm just reading the wrong selection of reports. However less profit, and 27% is a big reduction, if it continues means that the carrier has less/no money to invest in infrastructure with the obvious results.
I doubt that anyone outside the management and shareholders care about the financial troubles that large international telcos experience and I am only mildly interested because it doesn't affect Exetel in any way but it does indicate that the trends we may be seeing in Australia aren't going to suddenly reverse themselves. Again, I doubt that anyone outside the management and shareholders of the Australian telcos has any interest in the financial fortunes of those companies either - but perhaps they should - at least mildly - because while every user of communications services (mobile or fixed line) just takes it for granted that current and new services will always be available and at lower costs 'tomorrow' than they cost 'today' that cannot be the case without the profits to invest in maintenance and new technologies that make that possible. When a telco drops 27% of its net profit it is obviously far less able to invest in its current or new infrastructures. If this drop is indicative of future performance then it is pretty clear what will happen.
Personally, I have absolutely no knowledge of how efficiently Telecom Italia is operated so I can't begin to speculate on how they will address the apparent financial problems they are now experiencing (ignoring the problems with their disastrous 'Sparkle' venture). Similarly the Australian telcos all seem to be struggling to meet their financial objectives and will all 'do something about that' - possibly sooner rather than later. Let's hope they are successful because if they aren't then the quality and pace of technology development deployed across all services will continue to slow and eventually stop. 'NBN2' is one of the major concerns in this country as a political stunt, and an inevitably uninformed electorate, allow the Australian communications infrastructures to be destroyed by such a financially unconstrained level of 'competition'. So Australian carriers, and you might well say "about time", have an issue to deal with on top of those that other countries carriers are having to face.
Perhaps a government owned 'super telco' will be a benefit to all Australian residential and business and government users? The issue with that proposition is that no other country has come to that conclusion (most, like Australia until a year or so ago, moving in the opposite direction). My views are not relevant to such a fundamentally important issue and, of course, I can make no difference to anything that eventually transpires. As any sensible person I broadly follow the principles set out in the Desiderata which mean that I need to find something else to ensure that Exetel, its customers and employees continue to benefit from Exetel's continuing existence as I don't see anything 'good' happening in residential communications over the coming 12 - 18 months - except, hopefully, the ongoing increase in speed and capacity of the two main mobile data networks and, perhaps, some price improvements over that period.
I have no idea what is going to happen in Australian communications now that the current scenario is beginning to take some observable shape. One thing that appears to be pretty certain is that mobile data will become more important to the two largest carriers than at any previous time and that wire line revenues will become increasingly unimportant at a faster rate than up to today. Of course, anyone can see that - not so many people seem to be able to see how to address those issues plus an 'NBN2', whatever it actually turns out to be, further complicating an already very difficult set of circumstances caused by the double whammy of VoIP and mobile data.
Sometimes I wish I had gone in to the mining industry.
10, 9, .........