Wednesday, February 22, 2006

Telephone numbers

I'm no accountant, but things at Telecom must be getting dire. Back in '99, AAPT was worth A$2,300,000,000. Now it's reckoned to be about A$628,000,000, although comms analyst Paul Budde says it could go for half that.

Then there's the imminent death of CDMA in Oz, which will portend Telecom's inevitable switch from CDMA to GSM here. Rebuilding a GSM network is estimated to be between NZ$500,000,000 to 800,000,000. That's not including the opportunity cost on the redundant CDMA equipment, currently used to cover less than 10 percent of the globe. I could have told Telecom back in '99 that they should go GSM instead of mucking about with CDMA. In fact, I did tell them. Just no-one was listening.

Assuming rough parity with Oz & Kiwi dollars:

= -1,672,000,000
- 500,000,000
= -2,172,000,000

To give some perspective to this $2.2 billion or more pricetag, that is around 2 and a half times Telecom's annual net earnings for last year. $2,200,000,000 could have bought a LOT of fibre.