FYI | Aug 16 2006
My personal view that Telstra (TLS), Telecom New Zealand (TEL) and the telecommunication industry as a whole have landed in a new era of none to low growth has led to some fiery email exchanges over the past few months.
I don’t mind if people do not agree with my views, as long as the exchanges remain polite and where possible maybe even reach to a point where they become mentally stimulating. (Always happy to learn new insights).
Last week, however, the big Telstra debate took place in-house, and I was merely an observer.
FN Arena team member Greg has been a fiery critic of the Australian federal government’s actions thus far, and he is absolutely no fan of Telstra policies and strategies either.
Greg likes to drink a bottle of apple cider vinegar before he bows over his keyboard to write another Peely’s Point Of View on telecom matters. Judging by the popularity of these stories, and the responses we receive afterwards, many of you enjoy his vitriolic analyses of what he tends to describe as keeping Australia in the high tech Middle Ages.
Greg cannot understand that Australia won’t have its own high speed Fibre to the Node infrastructure anytime soon, for the simple reason of government dithering. And he’s prepared to walk bare foot from Sydney to Canberra to show how displeased he is about how the whole Telstra-ACCC-Senator Coonan matter has been handled recently.
Rob, on the other hand, has a much more pragmatic approach. He simply thinks everything in life has its own rhythm and order, and speeding up things, or skipping stages is not always the right thing to do.
In other words, Rob doesn’t believe delaying Telstra’s multi-billion FTTN project is such a bad thing. Australia hasn’t genuinely experienced ADSL2+ yet, he says, let’s have that first, FTTN can wait.
Rob’s main argument is that delaying FTTN won’t impact ordinary Australians in their daily lives. Not even when they spend quite some time on the internet. Most of them, he believes, are hardly using broadband services now and they won’t until the price of broadband connections drops dramatically.
As this is exactly what industry watchers and financial experts believe is going to happen now as a result of Telstra delaying its FTTN project, one could conclude that Australia will be advancing faster into the modern internet age without Fibre to the Node than with the project hanging over the market.
No doubt, a revitalised competition will consider investing in broadband equipment again. Given the trend to bundle sets of products, current prices are bound to come under further pressure.
Cheaper prices mean more Australians will make the move from dial-up to broadband to faster broadband.
Under the current framework, Rob tells me, many Australians are happy with either dial up or a cheap and cheerful semi-broadband connection at home. That’s sufficient for the occasional email. If anything requires speed or large download volumes they simply opt for the office network between 9 and 5 – just as easy and it doesn’t cost anything.
Hmm, what does this tell us about the downloading of movies and audio files?
I know what all this tells me about the outlook for the industry, and I don’t think it is looking pretty from a shareholder perspective.
If you want to have your say on the matter, do not hesitate to drop us a message at info@fnarena.com
The whole team at FN Arena is delighted as we launched our new Trading Cockpit today (check your email).
We obviously hope you all like what we’ve built and we hope we will receive lots and lots of useful suggestions and tips to make it even better.
Till next week!
Your delighted editor,
Rudi Filapek-Vandyck
(supported by the Delighted Four Rob, Terry, Chris and Greg)