- It’s always tea-time
- Telecom clocks up the profits again
It’s always tea-time
Must look into this… promises the solutions to all the travails and tragedies that beset me, namely deadlines. Only a single ‘s’ short of deadliness they are. Hope I can beat them this time.
Telecom’s clocks up the profits again
It seems like only yesterday when Telecom’s quarterly figures were released, but it was in fact three months ago, so we got a new set today.
If I remember right, Telecom has some 1.25 million New Zealand household customers. Each pays around $40 a month for the mandatory “line rental” (or Anytime, whatever), which works out as over $600 million a year. Nice little earner that, and you do wonder where Telecom’s calling revenues would be without it. They declined to $677 million in the nine months to March in fact. Take off the fixed line charge, and it really doesn’t look like Telecom is a traditional telephone company anymore.
Reinforcing this, the world’s most expensive data traffic variant, SMS texting, made lots of money for Telecom ($121 million, up 14.2%) thanks to the also high mobile and fixed network call termination rates that NZers’s endure.
Ditto data or DSL rather, which is selling like hot-cakes for Telecom in retail and pseudo-wholesale varieties. At this rate, it looks like Telecom will meet its self-inflicted target of having third-party ISPs reselling around a third of all the 250,000 residential semi-broadband (they’re only fast in the downstream direction) DSL connections by the end of the year. Politicians and regulators can breathe again and pretend the Telco Act is “delivering competition” although some less kind observers might say it’s delivering a cloaked state subsidy to a privatised, overseas-owned monopoly instead.
This is good news for Telecom, because even though people start using Internet telephony over their DSL connections, it doesn’t matter because you still need a Telecom voice line for it, at $40 a pop. In fact, it appears that Telecom is now trialling Voice over IP for residential customers. Makes sense, because VoIP calls are dirt-cheap for Telecom compared to clunky ole PSTN ones. Wonder if the residential VoIP customers will get cheaper line rental though to reflect this?
Mildly interesting is that there are still 11,000 customers who doggedly cling onto their Jetstart (128/128kbit/s) plans. I thought Telecom had forcefully converted this lot to the new semi-broadband connections? Another tidbit are the figures for Australia, where Telecom is struggling to get ahead in a competitive market. Its AAPT subsidiary doesn’t look all that successful, with decreased revenue thanks to “intensive competition across most product lines”. The Southern Cross Cable will now get “contingent credit support” to the tune of $37 million after tax as well.
Still, Telecom looks set to spend big money over the next two years. The present figures mention $498 million in capital expenditure, with a further $700 and $750 million earmarked for fiscal 2005 and 2006. Be interesting to see where all that goes.
Why aren’t the executives’ quarterly bonuses listed?
Die low data caps, die…
And this just in, from the Commerce Commission: The latest broadband figures for New Zealand.
The envelope, if you please maestro.
In the total connections category (including the woeful 128 kbit/s upstream service which isn't broadband but which we have to include because the Commissioner insisted on it in his recommendations to government), Telecom has 169,937 total residential connections, meaning it's 68% of its way to the target.
But what of the wholesale you say? Well that's steaming along (that's a play on words you see - steaming as in going fast but could also imply a certain Victorian outdated technology. Go on, laugh. It's Friday) with 17,933 wholesale customers. According to the Commerce Commission that's 21.6% of the wholesale target.
So is it premature to point out that Telecom isn't going to get to its wholesale goal? Well, don't forget Telecom did set the targets itself so you'd hope it would have done its sums first of all. Of course, wholesale's slightly different because it's down to the other ISPs to provide the results. I guess if Telecom doesn't make the grade it will cry foul and point the finger elsewhere. Quite what the government does at that point will be very interesting. Very interesting indeed.
No sign of the full release on the ComCom website yet, but have a look later in the day for the full breakdown.