John Linton I seldom take any interest in communications developments on the sub continent as they usually simply mirror the developments of their international owners but I read this earlier this morning:
http://online.wsj.com/article/SB10001424052970204012004577073752599591184.html?mod=WSJ_Tech_LEFTTopNews
because we have been looking at what, if anything, Exetel should do with mobile telephony offerings in early 2012. While Sri Lanka is by no means similar to India in telecommunications technologies I have noticed on my dozen or so visits to Colombo that mobile telephone tariffs are amazingly low - much lower than those in Australia and far lower than can be accounted for by the lower personnel costs of doing business in Sri Lanka than in Australia.
As you will see if you scan read this article one of India's major mobile suppliers (part owned by Singapore Telecom) suffered a massive drop in profit over the past three months and had to raise its tariffs by 20% while saying more raises are to come. At a US cent a minute for most call types it is hard to see just how any sort of profit can be made at all but they do. Both Telstra and Optus constantly report both subscriber growth and profit growth from their mobile telephone operations in Australia which seems quite an extraordinary achievement until you look at this company's results. I have never understood the mobile telephony business in Australia as the 'capped plan' scenarios endemic to that industry have always revolted me - being the simple minded person that I am and the never ending pursuit of customer numbers via ever greater discounting is not something I have ever understood....entirely my limitation.
So, the article caught my eye in passing and as we are looking at a new 'deal' from Optus in terms of mobile wholesale pricing it was worthwhile considering what was happening to another Singapore Telecom company albeit in a completely different set of market places. If a Singapore Telecom partly owned company in India can make a sensible, albeit reduced, profit in India at tariffs of one cent a minute what sort of profits are they making in Australia at tariffs more than ten or twenty times that? Obviously quite considerable ones......even allowing for the handset 'give aways' and huge wholesale commissions and the massive advertising bills. Not that affects Exetel in any way - we are a tiny supplier of mobile services and always will be.
What it does seem to confirm is that we do not have any ability to provide mobile telephone services - even for 'completeness' sake and we never have had although we have been doing it for almost as long as we have been in existence. So, despite its apparent irrelevance to anything happening in Australia, the article did underline why Exetel should have nothing to do with mobile telephony services in the future as it can never become part of a sensible 'offering' and we can never compete (in terms of a sensibly competitive service) with large suppliers - either carriers or wholesalers. We simply will never have the volumes that allow us to do that.
Strange source of information that will influence such a decision after so many years.
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