Timed local calls
Fri, 28 Mar 1997 09:35:32 +1000
I spoke at length to various parts of Telstra yeseterday, and also read the
memo to which Stewart Fist referred. The Government's
decision to not extend the untimed call option for bussiness data calls
after July is definitely an attempt by Telstra and the Government to
capture greater revenue
from the Internet. Frank Blount has been saying that Internet traffic will
exceed voice in 2000. Meanwhile (timed) mobile traffic is now levelling
out. Telstra must get full value from the growth in Internet traffic to
maintain revenue growth as the growth in mobile volumes slows down. I
think, but don't know, that the Government understands this and that this
is why the untimed call option has not been extended for business data
calls - to allow stockmarket analysts to factor timed calls for Internet
traffic into their revenue projections for the float, which will enhance
the value. That will offset the value-destroying elements of the new
regulatory regime from July 1.
>From a business point of view Telstra will be keen not to kil the goose
laying the golden egg, and would be taking notice of the stuff about the
"death of the Internet" etc. But I reckon the experience with mobiles -
where grwoth has been phenomenal despite it all being timed - would lead
Telstra to believe that timed calls will not kill the Internet.
If I'm right, and the decision to exclude business data calls from the
untimed call obligation is aimed at enhancing Telstra's Internet revenue
growth, and therefore the value of the company in the float, then the
don't matter (A calls or B calls etc). It's what will happen. The
Government has shown this week
that it's not worried about cries of "thin end of the wedge" from ATUG, or
about distortion concerns from economists.
Just thought I'd pass that on to linkers for comment.