John Linton I read this earlier this morning:
http://www.zdnet.com.au/isps-prep-for-accc-telstra-adsl-war-339306765.htm
and was struck by two aspects of the standard whining from Internode and iinet and the self righteous posturing of Dodo. All these companies (and, of course including all other ISPs which of course includes Exetel) only exist because Telstra was forced to wholesale ADSL1 services and then chose to sell the same services at sky high prices for as long as possible which allowed many of those ISPs to make very easy money for over seven years. They made so much money they thought they were carriers and used some of the profits they made to 'bite the hand that fed them' and to install their own versions of the Telstra infrastructures in Telstra's exchanges and stop buying from Telstra and 'use their own infrastructures' - in other words set themselves up as a direct competitor to Telstra having used all of Telstra's investments to put themselves in that position.
This worked relatively well for a while until Telstra decided to compete more sensibly by doing exactly what these whiners had done - set their prices lower than other ISPs operating from the same exchanges and provide ADSL2 in 800 or so exchanges that all other competitors had not put their own equipment in. Does this sound unreasonable to you? I mean, is it unreasonable that one ADSL2 provider should not compete with other ADSL2 providers on whatever terms they choose to adopt? The reason that the ACCC didn't "declare" ADSL2 services was for this very reason - that any ISP could install ADSL2 DSLAMs in any exchange they wished to do so (and many already had with a bonus $2.50 pm line from local users to the exchange) and use any provider they wished to run back hauls from those exchanges. The result, from Optus on down, was that those ISPs who chose this path confined their installations to the profitable exchanges and, unlike Telstra's commitments under its USO, ignored the rest of the country.
Now they whine to the ACCC that Telstra has an unreasonable advantage and they want their sheltered workshop arrangements extended so they can simply use Telstra's investments for their own benefit - or that's how it looks to me. I don't seem to see any repeat of the previous boasts that they were responsible for 'driving down ADSL prices' because of their superior efficiencies and superior service - apparently they aren't superior in any way now but are actually inferior - at least in terms of price per month and activation cost and low cost other services. Do they want competition or not? Apparently not.
I was also amused to see Dodo's comments praising their new best friend - Telstra. Nothing wrong with the 'sentiment' but a little obsequious I would have thought. Dodo, like TPG and, to a much lesser extent Exetel have all, apparently, recently benefited from Telstra's slightly changed attitudes towards their wholesale customers. TPG, which has a larger investment in ADSL2 DSLAMs and back hauls than either iinet or Internode has simply recognised the reality of the current Telstra situation and 'done a deal' with Telstra to sell their ADSL1 and ADSL2 services in the exchanges in which they have no presence. They have been able to sell those services at lower costs than Telstra offers the same services (something that iinet and Internode are apparently unable to do) therefore putting in place the competition that Internode and iinet do not seem to be able to do. In a lesser way Dodo have done the same.
The residential ADSL marketplaces ARE a dog eat dog mess at the moment but if anyone is to blame for that it's the ISPs that thought a few years of umbrella pricing made them carriers and they 'poked the sleeping bear with a stick' one too many times....and got the predictable response. The reality has yet to play out but the next 12 months are unlikely to get any easier and almost certainly will get even tougher. I don't like what I see and while I am sure the whiners have much stronger balance sheets than Exetel does and have far larger customer bases I don't think whining to the ACCC will be of much use in addressing the ever bloodier 'bath' this industry has become - at least in terms of residential market places.
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