bjhoogs:
MikeyPI: Where did they state that? Telecom restructed contract to milk every cent to try and combat their ever declining stock value.


This is about profit margins, not the models viability.



In the real world it is profit margins that determine whether or not a business is viable.
I don't expect telecom to pay more for a service than they have to any more than I expect Downers to run their business at a loss to subsidise the people who worked for them.  





No the viability of a business depends on profitability, ie the ability to generate profit, not the amount.


The question here is margin, and they just figured a way to increase the margin.  For your argument to be valid they would have had to be losing money before hand(which I doubt, if you can show me figures to disprove that, well I'll change my stance).


In doing what they did, they screwed their employees, about 1000 NZ families, and a whole heap of customers, for a few more percenatge points on the bottom line.


This debate happens regularly in companies, when the boffins in the basement come up with great ideas to increase profitabliity. But it has to be weighed against social responsibility, of which Telecom seem to have none.


Look at Cadbury, they margins were acceptable, until some genuis suggested smaller sizes at same prices, and reduce ingredient cost to increase margin. Problem was they failed to factor the social cost, and got royally shafted. That whole exercise would have cost them millions.