[LINK] RFI: Change in Telstra Timed-Call Charges

[Frank O'Connor]

Telstra has been doing this for ages ... their business model is not 
to add services and non-charged content (which seems to be the go in 
the smaller contenders), but simply to figure out creative ways of 
maximising their charges and fees.

Accounting rather than engineering. Bean counting rather than 
technical skills. Penny ante-ing rather than service provision, or 
free content or value.

When local calls didn't cut it, they raised the line rental by 1000% 
to $30 pcm ... on a copper asset that would have been 
amortised/depreciated to a nil value by any other industry twenty 
years beforehand.

This was badly timed ... as mobiles were ubiquitous, and for $30 pcm 
you could get a reasonable plan that didn't include line rental and 
that was credited to call costs alone.

Surprise, surprise Telstra's copper revenue and patronage decayed 
big-time. ex-customers went mobile ... with mobile providers other 
than Telstra. Previously trapped on Telstra copper clients freed 
themselves from the Telstra network. I doubt this was what the money 
boys had in mind ... but this was their major achievement when they 
raised the line rental.

Other comms providers concentrate on providing better value for 
money, more free content

Now with the NBN Telstra has failed to realise what the other telcos 
have taken to heart ... churn is bad, customer loyalty is paramount, 
and its far better to go into the NBN with the maximum number of 
customers, than with maximum penny ante'd revenue, and a trapped and 
milked customer base that is disloyal to the Nth degree. A serious 
NBN player wants to go into the fibre age with as many committed 
customers as possible ... because it is unlikely that the retail 
providers in the NBN environment will be able to initially 
differentiate themselves on service and charges.

Telstra seems to be in the business of dumping as many clients as it 
can ... an inadvertent result of their charging strategy that means 
they won't be a huge player in the NBN environment.

Thodey seems to be following the short term shareholder focused 
management style that has epitomised Telstra since its privatisation. 
That was OK when they were coining money hand over fist, and accruing 
huge profits which could be blown on failed overseas ventures with 
gay abandon - when they had an effective wholesale monopoly ... but 
doesn't fit the bill when they are looking at being relegated to 
being 'just another' retailer.

Telstra better wake up to itself before the NBN does come in, and 
REALLY focus on providing value, service and content to their 
existing customer base ... or it will see an exodus to other more 
customer focused ISP's and comm providers that will give its 
shareholders nightmares like the Telstra board would not believe.

Just my 2 cents worth ...

					Regards,

At 7:58 AM +1100 18/2/11, Roger Clarke wrote:
>On Thu, Feb 17, 2011 at 4:19 AM, Roger Clarke
><<mailto:Roger.Clarke at xamax.com.au>Roger.Clarke at xamax.com.au> wrote:
>>That's an 11% increase for a call that clicks just over 4 minutes.
>>And it's a 100% increase in the time-cost for the large numbers of
>>sub-30-second calls.
>
>
>At 8:41 -0800 17/2/11, Scott Howard wrote:
>>It's been a very long time since I've paid Telstra for an STD call,
>>but based on their website it looks like the standard rates are
>>20-25 cents/minutes, with a 0.45 cent flag fall.
>>Thus the just-over-4-minute call would have previously been
>>(4.5*0.25+0.45=)  $1.58, where it will now be (5*0.25+0.45=) $1.70.
>>That's an 8% increase, not 11%
>>For the sub-30-second it's previously (0.5*0.25+0.45=) 58 cents,
>>where now it's (1*0.25+0.45=) 70 cents.  That's an increase of 21%,
>>not 100%.
>>Am I missing something?
>>(Prices from
>><http://www.telstra.com.au/homephone/call_types_rates/std_calls.html>http://www.telstra.com.au/homephone/call_types_rates/std_calls.html)
>
>I accepted the figures in the letter at face-value.
>
>"For example, an STD call on Homeline Complete, Plus or Advanced is
>currently charged at 10 cents per 30-second block.  This is changing
>to 20 cents per one-minute block".
>
>Note that my figures were for "time-cost", not the full call-cost.
>The 45-cent call connection fee is unchanged.
>
>
>--
>Roger Clarke                                 http://www.rogerclarke.com/
>			           
>Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA
>                     Tel: +61 2 6288 1472, and 6288 6916
>mailto:Roger.Clarke at xamax.com.au                http://www.xamax.com.au/
>
>Visiting Professor in the Cyberspace Law & Policy Centre      Uni of NSW
>Visiting Professor in Computer Science    Australian National University
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