John Linton ......in every aspect of human life.
I read this earlier this morning:
http://online.wsj.com/article/SB10001424052748703720504575377472723652734.html?mod=WSJ_Tech_LEFTTopNews
and thought that how significant (apart from reducing the 'need' to grow and fell trees to produce something as ridiculous as wood chips) a change this will make to so many people around the world over the coming few years. While I understand the last two or three human species generations have become effectively illiterate and many of them have never chosen to read a book in their short lives to date it is the clearest possible indication that the remaining book readers catered to by Amazon will soon stop buying 'conventional' books that have, for over 4,500 years contained the whole of the planet's knowledge and been the principle method of spreading one person's knowledge and ideas to anyone else who was able to read what he wrote.
So a plus for the world's oxygen supply and a minus for book shops that will go the way of black smiths - killed off by changing technology.
As I commented the other day about ADSL1 plan price changes - it was only less than ten years ago that ADSL1 was 'brand new' freeing internet users from the terrible slowness of dial up which itself had been around for, in reality, less than ten years as a commercial service. So now with ADSL2 which we began to 'seriously' examine yesterday and will make further efforts today to determine what we can do in providing more 'attractive' ADSL2 services to those people who still prefer a wire line service to a wireless service or to those, few, who have the option of a fibre service. ADSL2 has been around for less than 5 years and it seems very likely that it will not be around as a significant service well within the the next five years with a combination of fibre/wireless providing too many end user benefits for it to survive beyond that time.....though there appear to be many ADSL2 providers who think differently based on their refusal to acknowledge that the total number of ADSL2 users has plateaued and is now declining. Sometimes I wonder whether the people responsible for such thinking have actually been in the Australian communications business for more than five minutes.
As has been the case for over a year now - the various larger ADSL2 providers continue to make every effort they can think of to 'protect' their customer numbers and in doing so are providing ADSL2 plans at ever lower costs - consistent with the large overheads that all of them suffer from that puts an artificial 'floor' under the end user pricing. This 'floor' is partly caused by the fact that all ADSL2 services ('naked' or not) require some sort of copper telephone line to deliver the service and the only telephone lines available to do that are, of course, owned by Telstra who has now, if all goes to plan, agreed to turn them off as government owned fibre reaches more residences. In the mean time all ADSL2 providers have to hand over a lot of money to use the copper lines on which they are dependent. That plus the cost of ADSL2 DSLAMs/back hauls and advertising, selling and support costs all add up to a pretty 'high floor'.
As Exetel have less of those sorts of costs than the larger providers we are able to offset the 'lower costs' provided by owning our own DSLAMs and back hauls to some extent and the fact that we do no marketing or advertising and have very, very efficient automated systems and far lower support costs than most residential communication providers allows us some flexibilities not available to the larger providers - including the major advantage of not needing to make a commercially acceptable profit from ADSL services. Irrespective of these advantages we have never made much more than a break even result from providing ADSL residential services and even that has become much more difficult over the past year or so as the 'writing has appeared on the wall' and the 'investments' in ADSL2 mini networks has become so much rusting iron in terms of future value thus accelerating the scramble to add more customers before the source dries up completely.
The only sensible, financial, solution to this situation for any ADSL provider is to draw a line from today's level of ADSL revenue that falls to zero at some month in the future where the revenue from ADSL services will be zero. Commercial organisations that do that then have to draw another line for another revenue source that equals or surpasses the revenue (and profit) lost from ADSL services and then make that happen - planning/hoping that the second line will become shorter and the first line will become longer but, whatever level of reality is applied, planning for those two things to happen coincidentally. Of course, there will be a continuing market for ADSL2 services for some time yet - just a progressive decline in total numbers forcing the 'market share or perish' driven companies to ever lower net pricing against an increased level of 'services' included at the 'magic' price point.
Not a small challenge.....but, like the problem the book shops now face, technology is inexorable and there's no point in refusing to face facts so any company that plans to stay in the Australian communications business must 'move on'.
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