A middle way for the govt on Telecom

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nzdn

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Topic # 6554 3-Feb-2006 13:24

I personally don't believe that a clear thinking person should be put off LLU by adverse impact on markets, Cullen fund, Telecom employees, overseas investor flight etc - remember "What's good for GM is good for America, and vice versa"? And in any case, Telecom have shown they're perfectly capable of screwing up all by themselves (AAPT).

However it seems Telecom's prosperity is critical for these vested interests and this is preventing greater regulation.

So why not introduce landline piggybacking regulation as per mobile networks instead? TelstraClear would be incentivised to lay cable to reach the 10% threshold and one or two other players might join in. Competition but not a deluge. Regulation but "not too heavy, not too light".

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Reply # 27784 3-Feb-2006 13:43

Good idea. I guess you mean Telecom screwed AAPT like AirNZ screwed Ansett? Seems to be the way for big NZ companies crossing the Tasman.

freitasm

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Reply # 27785 3-Feb-2006 13:48

TelstraClear had all the incentive to lay cable before - it was called Saturn and Telstra bought it with this in mind. But instead of making money by investing money they decided to stop rolling out cable and crying to have a share of the investment other companies put on.

I am getting sick of people saying that company A should share resources with other companies. It's easy for Econet to deploy half dozen cellsites and then piggyback on Vodafone's cell network. Will Vodafone like it if it happens?

I use TelstraClear because I started with Saturn. The cable modem service is great, and I am on the top service (10Mbps). We are in the process of looking for a new home, and one of the points is to get in an area where the telstraClear service is available. But one day we will be sick of their limitations.

But instead of creating the environment to provide a competitive service, they rather use the old copper that is already there and offer exactly the same stuff as Telecom is already offering. Where is the"innovation"? Where is the "creativity"? Where is the "knowledge economy"?

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nzdn

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Reply # 27802 3-Feb-2006 17:18

You're in good company freitasm! The government agrees with you. So does Mexico. Can't think what's wrong with the rest of the developed world, those whackos...

freitasm

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Reply # 27803 3-Feb-2006 17:26

Hmmm. I know, it's an interesting way of thinking.

Are all these companies out there going to offer the same thing? Isn't that what is already happening today?

TelstraClear had the chance to offer something different, but they stopped the deployments, waiting for the government to hand to them access to the current infrastructure. And do they do now? Offer ADSL, reselling from Telecom.

Once we have the local loop accessible to everyone, what are they going to offer? ADSL by TelstraClear, using the same infrastructure as before, but not paying Telecom for the copper? How does it add value, except for enlarging the companie's margin?

What I am saying is that if we are looking at data, there are good initiatives:

CityLink in Wellington - mostly business, but I am sure they would like to supply services to anyone living and working in town (I'd buy from them, I work from home!)

Woosh nationwide - albeit slow, and I blame this on people waiting for the goverment to break up the Telecom monopoly on local loop instead of investing money in another infrastructure.

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nzdn

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Reply # 27804 3-Feb-2006 17:54

Competition begets creativity and innovation. It's easy to get hung up on the physical network and see everyone else as a pack of wholesalers, but customers are more interested in what gets pumped down to them than who owns the lines.

Consider BT, they're coming out with hybrid home-mobile phones and on demand TV. Telecom have no interest in pulling finger on these types of products.

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Reply # 27805 3-Feb-2006 17:58

nzdn: Consider BT, they're coming out with hybrid home-mobile phones ...

There's a good reason why BT came out with Project Bluephone: they (wrongly) spun off O2 (which is now being bought by Telefonica of Spain), and when they realised that "oops, there's a mobile market out there" it was too late for them to enter it. So this is a plausible solution, and is actually being orchestrated with Vodafone UK, since O2 didn't even want to hear from BT.

My point here is: BT is not doing just because the goverment wanted them to do, but because they figured out people will soon ditch the fixed line and go fully mobile. Which is a great option I think.

nzdn: ... on demand TV. Telecom have no interest in pulling finger on these types of products.

How wrong you are. But I can't say more (even though I have no current NDA with Telecom I assume I shouldn't spill all the beans I collect on the way here)...

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nzdn

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Reply # 27836 5-Feb-2006 00:58

Maybe BT was a crap example but the principle still applies. With adequate competition, providers will strive to differentiate in a number of ways - price, products, service. Whereupon the competition will immediately try to catch up. The result? A rapidly improving experience for customers.

As for spinning off being the "wrong" choice, I actually thought that when Voda NZ were at their market share peak (over 55% at one point) that it would be impossible to sustain and they could have cashed in by spinning off a separate network. If the new third operator's business didn't overlap with Voda's then a second phase of Telecom decline may well have been triggered as a result of two large competitors performing a pincer movement.

The previous paragraph was possibly just pure fantasy, god how I must hate Telecom.

Re on demand TV, that's the best fishing I've ever done, and I even didn't have to wobble for hours on the ocean in a silly hat!