If BHP turns a big profit, it's seen as a source of national pride, but when a bank announces a record result, commentary focuses on the fees it charges.
Telstra holds a comfortably large market share, it gets front-page media coverage, and its charges are very visible. Coupled with majority public ownership and many 'mums and dads' shareholders, this gives plenty of room for conflict: high profits mean bigger dividends and presumably more money for government services, but those profits come from our phone and Internet bills.
Consequently, there would have been mixed feelings around the country when Telstra announced that revenue growth for the current half-year would be as low as one percent, especially as CEO Ziggy Switkowski attributed a substantial proportion of the drop to lower wholesale prices due to "quite fierce" competition, plus provision for bad debts run up by One.Tel. Low wholesale prices might translate to lower phone bills, but what about Telstra's dividends and the drastic effect of the announcement on the share price?
The announcement of changes to call prices might help some customers in fringe metropolitan areas and around regional centres who have been paying STD rates to reach their city centre. New residential developments in greenfields sites may be contiguous with the rest of the built-up area, but the distance between charging points has sometimes put them outside the metro local call zone. The exact locations of charging points has even caused anomalies whereby residents of one suburb may pay STD rates to the city, while a second and slightly more distant area might be only a local call away from the CBD.
As is increasingly common with telecommunications pricing, customers must look very carefully at their calling patterns to see if they will gain from the new rate, as the plan that provides the new 25 cent untimed 'wide area call' removes the 15 cent 'neighbourhood call' and substantially increases the price of STD calls over 50km.
Broadband blunder?
The recent imposition of a cap on Telstra's previously unlimited broadband Internet plans drew an outcry from customers and negative press coverage. Almost 90 percent of the responses to ZDNet's reader poll agreed that Telstra had "shot itself in the foot" with the change.
On one hand, you'd think people would realise by now that most consumer telecommunications contracts give them very little certainty -- "[carrier] may vary this agreement at any time" is a typical clause. The Telecommunications Industry Ombudsman has no problem with the change, according to its public notice, despite receiving "a large number of complaints".
It will investigate any complaints from dissatisfied users having difficulty in being released from their contract. Although Telstra is giving those users an opportunity to walk away from their contracts without penalty, it is not matching Optus@Home's offer of a pro rata refund of the upfront charges. The Australian Competition and Consumer Commission has also received complaints and is investigating the matter, according to its director of public relations, Lin Enright. Although no conclusion has been drawn, "we would support transparency [of contracts]," she said.
The response to Optus@Home's introduction of a soft cap based on average usage was strident, and Telstra doesn't appear to have learned from its rival's experience. Telstra's change can be seen as an attempt to increase revenue (users can choose to pay for excess megabytes), whereas Optus's limit was presented as a way of providing a fair go for all users, sharing out the available bandwidth for a flat rate price. Telstra's cap prompted Optus@Home to claim in press advertisements appearing last weekend that its limit was 19g in May, over six times Telstra's allowance.
Adrian Sobotta, webmaster of www.broadband.org.au, said Telstra is "rationing the capacity of their network by money," describing this as "a very unfair system" compared with Optus@Home's mechanism. The reliability of Telstra broadband services hasn't been outstanding recently, with problems involving email and authentication servers. "ADSL is a complex technology that's still being rolled out... it hasn't reached a mature stage," said Stuart Grey, corporate affairs manager, Telstra Retail.
"Maybe they [Telstra] think... it doesn't matter what they do... they've still got a [broadband] monopoly" in many areas, said Sobotta. Rather than imposing caps, Telstra should be providing the country with broadband services comparable to those overseas, he said, pointing to current efforts to give broadband access to everyone in Canada.
Residents in the new suburbs mentioned earlier may find they are unable to get a broadband connection, as both Optus and Telstra have stopped expanding their cable TV networks, phone lines sometimes use technologies that prevent the use of ADSL, and rural customers may be too far from the exchange. According to Grey, these problems are about to be overcome with the introduction of two-way satellite connections. "By the end of the year, everybody in Australia will have access to broadband services," he said.
If there's one common thread to these stories, it's that Telstra is a business, not a public service. We'd all like cheap telephony and broadband Internet connections, but as we saw in the tech wreck (and possibly with One.Tel), selling services below cost isn't a foundation for ongoing success.
Members of the writer's immediate family are Telstra shareholders.
If you are sick of Telstra and the way they are trying to ruin broadband for the whole of Australia, then goto this site:
http://www.sitehappens.com.au/mydotcom/