Note: This column represents the opinions
of the writer and as such, is not represented as fact|
Yet another local monopoly player has decided to exercise its right to
rort a captive audience.
the contents of Aardvark's "million-dollar ideas" notebook
are revealed for all to see!
Yes, Telecom are hiking residential rentals again -- justifying it with
claims that we're using the Internet too much.
Of course Net-nincompoop and Deputy Prime Minister Jim Anderton (who once gave
his email address as something like www dot anderton at government com dot
NZ) and one-time supporter of the "little people", has chimed in behind Telecom
by announcing that it was over-use of the Net by a small number who had forced
the latest price increases.
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What's going on Jim -- why are you siding against the hard-core Net users of NZ?
But let's look a little more closely at Telecom's "excuses" for hiking those
It can't be denied that use of the Internet has produced a significant increase
in local call minutes racked up by domestic subscribers -- but it's not as if
this increase in use has come without some compensatory lift in revenues for Telecom.
They appear to have conveniently omitted to mention that quite
a not insignificant percentage of households (especially those with those evil heavy
Net users that Anderton so strongly criticises) have added an extra phone line.
That's a good extra chunk of cash in Telecom's back pocket every month isn't it?
Let us also not forget that Telecom owns the country's largest ISP -- XTRA. It
stands to reason therefore that a large amount of the money people are paying
for their Net access is also going into Telecom's coffers. And don't forget
that most of the other ISPs also end up handing over a pretty penny to
Telecom each month for services associated with the provision of internet
To be quite honest, if this massive growth in Internet use hasn't come as
a windfall for Telecom then they really ought to re-evaluate their strategies
and management abilities.
However, if they're still adamant that residential Internet use is having a
negative impact on their bottom line then there is a very simple solution to
this excessive Internet use and its effect on the residential phone network:
give us all DSL services at a reasonable price (or in most areas - at any price).
Countries such as Singapore and South Korea seem to have sidestepped PSTN
congestion using this rather clever tactic -- why can't you?
And isn't communications equipment getting cheaper every year -- just like
Surely Telecom's not telling us that our phone lines are wearing out
through over-use are they?
It appears that Telecom would have us believe the provision of domestic
phone services is actually costing them $180 million a year -- because the
price of residential rentals are too low.
So tell us Telecom -- why is it that in the limited areas where you actually face
competition to your local loop, you're voluntarily charging just $29.95 instead
of the $36.34 the rest of us have to pay for each month's line rental?
Could it be that there's actually more profit to be made by whining about
Net users using the PSTN while simultaneously enjoying the additional revenues
Of course, if Telecom was really losing $180m a year through operating
the local loop and residential rental service they'd sell it off wouldn't they?
Let's face it -- even if it's bleeding ink at that rate there'd be plenty of
What Telecom are failing to mention is that the residential customers and the
local loop that feeds them is a very strategic asset -- worth far more to them
than the revenue it generates in monthly connection fees. Maybe they are losing
money on those residential customers who never make toll calls, don't use any
smartphone services and who spend every waking minute on the Net -- but then
again, my local supermarket often sells butter, bread and other basic products
at below cost because they know they'll make up those losses (and far more)
from the spin-off sales that follow.
Don't lose sight of the fact that, despite its protestations of huge losses
on the provision of local loop services, Telecom is still returning a profit
measured in hundreds of millions of dollars each year.
And that's the real reason they're also prepared to silently (without so much
as a whimper about how unfair it all is) match Telstra/Saturn's price
in those areas where they can provide an alternative service.
If we had a nationwide competitor to Telecom for residential services then
maybe we'd all get a $29/month phone service plus cable/DSL internet. Would
Telecom then still be bitching or would they simply consider running the local
loop as a loss-leader to be an acceptable part of doing business in this marketplace?
Let's face it -- Telecom are simply exercising their monopoly -- and in the process
they're duping those politicians whose IQ matches their share of the vote.
If the government had any balls it would force Telecom to open up the local
loop. Let other providers offer competing residential services through that
loop, and even install DSL gear so that the rest of us could get access to
Unfortunately those in power are still a decade behind the times it seems.
Not only does Anderton think that heavy use of the Net is a bad thing for NZers,
but the government appears to believe that 9600bps is quite an acceptable speed
for dial-up. Excuse me -- this is the 21st century -- not 1990!
For a government which supposedly has its roots in supporting the rights of
workers and "the man in the street", the present one seems to have sided with the
big corporations an awful lot recently (see
Guilty Unless Proven Otherwise).
This latest move from Telecom, combined with the absolutely appalling
attitude of Sky TV to its customers must have really brought home to
most NZers the dangers of unregulated monopolies.
(Is it just coincidence that Sky TV and Telecom have gotten into bed together
to sell a bundled phone/TV service -- or is it just birds of a feather flocking
together I wonder?)
Come on Government -- the voters of this country are asking -- are you with
us or against us? We can't build a fence or cut down a tree without getting
official permission -- but Telecom remain free to rob us blind with the
overwhelming support of some within government and you've hog-tied TVNZ so
that it can't compete with Sky in the area of digital TV.
Elected representatives you say? Representing who I wonder?
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