John Linton .......Telstra's CEO has announced that, after long and detailed research, he now believes that high pricing and poor customer service are the reason that customers are leaving Telstra in increasing numbers. You have to admit that, if you pay enough money for your CEO, you get real results.
I left commenting on this statement because I didn't want to confuse what I wrote about yesterday. Despite my facetiousness it represents the single most significant statement by a Telstra senior manager in, well, in a very long time and it is the single most concerning statement made by a Telstra executive that I can recall in the time I have been involved in Australian communications. It has far more importance than El Sol's "all wholesale customers are parasites" because it will actually produce far swifter and far more sweeping changes to the industry than the poorly thought out attitude of a set of carpet baggers than that Tex/Mex horror story ever could.
Since 'de-regulation' allowed Optus to obtain a carrier license the 'alternative to Telstra' communication services have been gradually built up by companies that relied on Telstra's high prices to exist in the first place and then build their own inefficient companies (rivalling Telstra for inefficiency of operation as they grew) simply because there was so much fat left in the pricing that could be charged even after discounting Telstra's massive charges. This has allowed some semblance of an 'alternate' set of services to be offered by a rag tag and bobtail bunch of "other communications comanies" over the past decade plus with one company, Optus, even investing in both mobile and wire line infrastructures to become big enough to be a real company and perhaps the only one that can survive the new "Telstra initiatives".
What am I talking about? Well, if you think about it for more than a trillionth of a second, which communications provider would you prefer to buy from if you had a choice between Telstra and anyone else? At the moment some thing like 35% of the total buyers of all types of services prefer to buy from some company other than Telstra - an increase from zero some 20 years ago - and you have to think in terms of those sorts of time frames because communications, unlike government tenures, is a multi decade business - not a day by day popularity contest. Telstr/Telecom/Department of the PMG/etc has been around for a century and has consistently evolved over that time - for a reason....it takes big continued investments over very long periods of time to build a communications infrastructure and it takes even more money than that required to build and constantly rebuild the infrastructure to deliver high reliability services to end users from a residential dwelling to a mega-corporation. It's an oxymoron but their actually are not any "medium sized" National telco's even in "medium sized" countries.
Australia only has a bunch of medium sized communication providers because it has taken 20 or so years for Telstra to lose 35% of its previous 100% market share and it allowed that market share to be lost because it suited its financial plans in each of those years. Now it apparently sees a need to make some changes to it's "moving forward" strategies and it has decided to change the only two things that have allowed other start up communications companies to survive and then grow...it will attempt to reduce its prices and improve its service - the only two things that allow other companies to compete at all and, in reality, without a price advantage having 'better service' may be severely over rated.....if in fact Telstra's service is that bad, which I personally doubt. However that's another saucepan of piscines.
So....in David Thodey's just discovered brand new communications world what will happen. It's a beautiful sunny Sydney Saturday morning and all is right with the world so let's take some guesses:
1) Telstra has got the current government off its back by signing a heads of agreement that gives it a year to put in place a whole lot of things that will allow it to say "sorry - no can do - it's the shareholders you know" mid 2011.
2) In the mean time it will fatally damage the aspirations of the "medium sized" communications companies by removing their only raison d'etre - price advantage and it will do some cosmetic changes to its already better than most companies support services (eliminating the complaints by the welfare dependent lunatics who bleat if they go over their download allowances or make a million mobile calls without being "alerted" by their provider.
3) They will also ready their fibre services and price them at 'new Telstra' pricing to demonstrate to the few remaining rationale sections of Australia that a fibre service already exists that requires no tax payer funded rorts for Labor mates. They will continue to build out a usable wireless service in areas that cannot get ADSL2.
4) If Labor is re-elected next Saturday, they will use the High Court to defend what ever position a re-elected Labor government attacks them on until a new election finally removes the current bunch of doctrinaire no hopers from doing further damage to Australia's communications infrastructures.
Any bets?
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