John Linton ....are starting to become obvious to even the lesser intellectually equipped.
The half year reporting period will shortly produce the latest Telstra figures that will, for the first time, spell out the devastation both to Telstra and to all other suppliers of communications services to Australian residential users the Telstra 'win back' programs have wrought. Telstra's own results are a negative nightmare and it will be interesting to see what Telstra's CEO is able to say about them that is even vaguely positive - other than we spent hundreds of millions of dollars reducing our top and bottom lines and all we have to show for it is that we've got more support and network costs to provide for the customers we 'won back'.
One example of the problems Telstra has generated for almost all/all suppliers is the latest Internode announcement (unless it is an interesting early April Fool's day joke):
http://www.itnews.com.au/News/247451,internode-touts-power-packs-for-upload-shaping-boost.aspx
I don't know how a company can try and raise it's prices $10.00 or even $30.00 a month by offering "extra value" that is already standard for even small companies like Exetel:
Static IP (costs the ISP nothing)
Doesn't count uploads (downloads exceed uploads on ANY individual circuit by 3:1 so there is no reason to count uploads in the first place - they don't incur any cost at all)
Excess usage charged at $5.00 a gigabyte (compared to Exetel's $1.00 per gigabyte)
Now if that isn't desperation I don't know what is.
The 600,000+ residential ADSL customers 'won back' by Telstra obviously came from other ISPs (including 10,000 over two years from Exetel) and it would seem from this joke of an announcement a fair few from Internode. Losing customers is always a bad thing but when the largest provider in any supply chain spends an amount of money greater than all of its competitor's (bar one or two) gross annual revenue to attack their customer bases then its an inevitable result. What is much, much worse for companies like Internode et alia is that they have charged such a heavy premium for their ADSL and other services for so many years that they have become fat, dumb and careless enough to allow their overheads to build too much and as they lose customers there is the double negative of losing the ability to cover the cost of all that 'fat'.
Internode's "announcement" of "more value" is simply the desperation of a bunch of 'accountants' who say "we need more money to pay the bills but you can't incur any more cost" so the 'marketing people' find something(s) that cost nothing and try and charge the dumber customers for it by pretending it's got some value. Each of the 'items' offered by Internode for either $10.00 more or $30.00 more per month (FCS!) has a zero cost to Internode. You will see similar attempts by more and more suppliers in the not very distant future. It is part of the ever encroaching dishonesty in the selling of communication services to residential users that was always a problem but, thanks to Telstra's efforts over the past two years, has become endemic.
My, personal as well as on behalf of Exetel's, key interest is what David Thodey and coterie are going to do now. They are halfway to two thirds the way through spending their billion dollars which has resulted in damaging the value of their own company - well played - (watch the share price after the half year announcement) and pretty much damaging to an equal extent every one of their competitors. What are they going to do now? It is going to be a really interesting half year announcement meeting with the analysts and key shareholders.....the amount of "spin" needed may well shift the planet's axis it will be so great.
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