Optus no longer selling Telstra garbage!

In June 2007, Optus is expected to make a rather fantastic and interesting move.

They will dump the Telstra garbage they resell, in exchange for reselling solely from its own footprint which carries much higher margins.

There are good reasons for optus to stop selling the Third World Expensive Garbage that Telstra Wholesale describe as “Broadband”:

  • They don’t lose out on high support needs users, who they make 5% off
  • They make fatter margins, something like 30%, compared to that of Telstra Wholesale Garbage
  • They only have to support users they are actually making the support costs back from

As you can see, the decision would primarily be profit motivated, but I congratulate them on prompting such a bold change in the industry by stopping selling rubbish, they have to pass off as Broadband, to actually start selling broadband.

In somewhat significant related items:

Telstra have finally figured out how to identify who Joe Blow, and Joe Blow are, living at the same address. OMG, they are the same person. We’ve been sending out two bills a month for his phone and net. Let’s scrap that and… well, they now get a single bill. I wonder if the shareholders factored that into the reasons not to buy Telstra? Poor management of expenses. Previously each customer was just a number, or 3 to Telstra. Now they are just a number. They still don’t know who the customers are.

And, moving onto more exciting news, more competition is about to spread as Telstra investigates a $300 Million dollar link to the US. This link is believed to rid them of the expense of paying Southern Cross cables, and push their own profits further higher. Such a move has fantastic incentives for users, like reduced costs or higher quotas because ISPs will have choice, and in a market of choice, price is generally the winner, unless your incompetent, in which case, competence is the winner.

PIPE Networks also planned to build one into Guam, which is progressing and seems to have financial support behind it, leaving the east cost with Southern Cross Cables, PIPE Networks, Australia – Japan Cable (AJC), and Telstra’s Cable to the US as possible competing methods of getting those bits flying around the planet.

I would suspect more of these providers to be planning to implement a technology Simon Hackett (Internode MD) has been speaking of for so long, it’s nearly a Platinum Album now. That’s WDM. Wave Division Multiplex. The technology is understood to allow a single cable to carry many times the original capacity by using different Wavelengths, thus allowing multiple streams in one cable. Fantastic Idea, allowing Terabits of capacity down one single cable. This technology likely to also reduce the cost of broadband, as the cables are generally resold based on capacity, so if they dilute capacity by adding more, at minimal cost, you can only expect prices to come down.

On that note, 2007 is going to be a lot more interesting with all the broadband topics currently heating up. Cheaper broadband, faster speeds, or more value for money, so far seems like everyone’s a winner, except Telstra, who will still be crying at Christmas about it’s the latest LSS decision of $2.50.

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