FYI | Apr 12 2006
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Hi Rudi,
There are several matters the analysts seem to overlook with respect to the Telstra story (Whichever Way You look At It, VoIP Will Damage Telstra, FYI 11/04/06).
Why would an enterprise of any substance and standing invest money in keeping old technology going ie. pouring money into maintenance – when new and exciting technology is available. Telstra’s billions are not going to be used to prop up an aging infrastructure it’s going to be used on new technology so all the revenues the powers that be say are going to be lost will be poured into infrastructure that will generate income in keeping with expenditure and reality.
Telstra I’m sure doesn’t give too much thought to the revenue it will lose from fixed lines because it’s future expenditure will be on the emerging technology ie. VoIP and other similar technologies that will provide an income relative to expenditure.
In doing this the public will benefit from cheaper calls etc. but that doesn’t necessarily mean a reduction in revenue. Humans are funny creatures – when things are cheaper we tend to use the technology proportionately more and in time spend just as much as ever. In that way revenue for the likes of Telstra don’t actually decrease and profit can actually increase because of dramatic cost savings ie. not having to maintain fixed line systems which cost the earth.
When fixed lines fade into obscurity as they will Telecoms will be celebrating big time !!
As for competition and sharing infrastructure what other industry is required to share what it alone has created with it’s competitors and at a price some out of touch nincompoop in a back office somewhere determines is fair to someone who has not had anything to do with creating the infrastructure. Let the other Telco’s expend what Telstra has to and then compete on pricing of services
This I suspect is what will come to pass if the Telstra Board has it’s way. That will provide the level playing field the so called ‘Competition Authority’ keeps harping about but refuses to deliver to Telstra because of the present ownership structure. Most of the current speculation is of necessity Political and seems to revolve around ‘The Bush’ . In time and it won’t be too long Politicians and the population in general will come to realise that what the Board of Telstra is proposing is the realistic way forward. The billions our Senator friend from Queensland keeps saying needs to be spent to satisfy people in ‘The Bush’ will find it’s way into Capital works to provide for the future not prop up a dinosaur from the past. In that way everyone will benefit and Telstra will continue on it’s merry way.
Sorry for the long diatribe but none of what I have tried to impart seems to surface in the Media in any shape or form. If it were BHP Billiton being sold off what I am endeavouring to impart would make sense to the Financial types but for some unknown reason my reasoning doesn’t seem to apply to Telstra in their eyes.
Kind regards
Alan Robertson