Thursday, December 08, 2005

The copper goldmine

I'll give you a prediction; within ten years, Telecom will either be dead and gone, or a completely different beast from today's dinosaur. Telecom must evolve or die. Today's articles in Stuff show that Telecom knows this. According to a letter to Swain from Teresa Gattung released to the DomPost under the OIA, unbundling would rip the shit out of Telecom.

This is true. Telecom makes a fortune on toll calls and would lose millions in revenue by removing national toll zones. Like any company, Telecom wishes to retain value to shareholders. One way of doing this is upgrading their toll system to VoIP over the next few years. That's right, by 2012 Telecom wants all NZ toll calls to go through its fat bandwidth high speed lines, something that any customer with Skype could do if only they had access to said high speed lines. Only the former scam maximises the return to Telecom's shareholders, so no surprises which one is Gattung's preferred model.

Same as it ever was. When I was at Telecom, I observed a range of revenue streams directly linked to Telecom's monopolistic stature in NZ. I'm not sure whether I am at liberty to disclose what these were, so I won't go into detail. You'll have to trust me on this. Suffice it to say that it is in Telecom's interests to employ as many lawyers as possible to put off the inevitable for as long as possible. Frankly, it makes the Waitangi Tribunal gravy train look like a scramble for 5c pieces.

Maybe, just maybe, Telecom may survive all this. A mate of mine in the telco trade reckons it will only happen if Telecom get out of retail and make their money in wholesale only. Good advice I'd say.