Telstra's reluctance to tap into other revenue streams along with its use of delaying tactics to bring forth market competition could lead to its ultimate downfall, according to one industry expert.
In light of yesterday's profit warning, industry analysts Paul Budde believes if the telco continues on its current path, both internationally and nationally, it will become an -ideal take-over target for a company wanting to break it up and discontinue it as it is now."
Australia's major telco announced it expects revenue growth in the current half-year to be down to one percent from five percent, leading to a shortfall of AU$400 million.
The company has placed a number of negative factors at the heart of its financial slide, including a general slump in the economy, loss of market share and competitive pricing.
According to Budde, if Telstra had started looking at other revenue streams such as broadband and the higher Internet speed market, rather than protecting its stake in its voice services market, it wouldn't be in this predicament.
-Telstra has been extremely reluctant compared to the rest of the world in moving into new services. It's main focus has been on protecting its current pie with delaying tactics," he said.
Examples of its tactics to discourage competition are the discussions on unbundling the local loop which have been underway since 1996 and now delayed until 2002.
Furthermore, mobile phone number portability, which is to be introduced in December this year, has been in discussions since 1994-95. However, Budde says there is a question as to whether Telstra will try to further delay the process.
-The whole of Telstra is focused on delaying and discouraging competition rather than moving forward," he said.
Budde says lack of competition and Telstra's current financial position is putting Australia in a difficult position with regards to the telecommunications industry.
-The Australian government has allowed this to happen. It is also to blame as it allows Telstra to delay and discourage competition," he said.
Say no to Telsta and go elsewhere.