Telstra, a below terrible corporate citizen

When you look at the behaviour of many businesses, they all have a common goal, among many of them:

To capture marketshare, and to make a profit.

Now, if you look at just these companies: Telstra, Optus, iiNet, Internode, AAPT, and We’ll throw in Netspace as well.

Telstra: A sold off government fuelled monopoly that is now a private company, and has to meet the interests of its shareholders, and those interests are to bring financial growth to them.

Optus: A smaller company owned by a singapore based holdings company. This company has been attacked repeatedly for being “foreign”, yet Telstra is managed by foreigners and owned by foreign shareholders. Optus started to invest in Australia many years ago when Telstra was first privatised, and began to rapidly target growing its market share. It did this through a number of ways, but the considerable one is that both Telstra and Optus had common goals, to make money, so Optus decided to buy from Telstra, and supply services from Telstra at a profit (while helping Telstra make profits).

iiNet: A smaller company started by an Australian, started as a dial up ISP, went to the broadband resale model, got fed up with Telstra’s greedy antics, and moved to set up its own network (despite the “lost keys” scenario that occurred a little too often). iiNet pioneered a larger part of the industry to start investing in its own network equipment, realising large potential profit from providing customers services themselves. They still like to be a good corporate citizen, they pay ULL and LSS fees to Telstra Wholesale, to help Telstra make a profit.

Internode: A smaller? company, started by an ?Australian. Is still a privately owned company, and also followed the previous two, providing services via Telstra Wholesale, helping Telstra move their barely sellable product to many more users, and rising the profits for Telstra Wholesale, who is Telstra’s top 3 listed profitable companies. Internode had enough also, and ran their own microwave backhaul, and provided their own ADSL services in areas Telstra either didn’t dare go, or were too greedy and priced the services out of reach. After Internode did this, Telstra dropped their prices for some services for THAT area, and that area only. They still are a good corporate citizen though, renting backhaul over to Tasmania, and paying for ULL and LSS, just like the above.

AAPT: Another company who is owned by a foreign company (Telecom New Zealand). The funny twist here with AAPT, and Telstra though, is that Telstra, here in Australia are fighting to keep its monopoly. Telecom New Zealand is the monopoly in NZ, however, is yet to be attacked for being foreign owned, despite having a comparable market share in Australia to many other providers. They provide generally Telstra Wholesale services, helping Telstra sell it’s generally unsellable product, and making Telstra Wholesale even bigger profits.

Netspace: A company that is .. well, another company. They resell services from Telstra Wholesale. Netspace currently have issues with pricing on backhaul to Tasmania (who doesn’t have a problem with backhaul pricing at all anyway?), but indeed the effects are drastic that they must stop selling to customers over in Tasmania, it costs them more than 2 pretty pennies to get the data past the big bully that is Telstra (via a wholesale provider, likely XYZ (Optus)). While Netspace have issues with this, they still like to maintain a good corporate relationship, and move Telstra Wholesale’s some what unmovable product, and help this company to be yet, the next best profitable company in Telstra.

So, with all those examples in mind, they all share a common ground: They alll in some way contribute to Telstra Shareholders profits, and Telstra Wholesale being one of Telstra’s key profitable businesses.

Looking at the reactions the other way, it doesn’t look as well:

Telstra -> Optus: We realise you move a lot of our wholesale product and contribute to such growth within our company, and we thank you, we do this by being racist pigs and slagging you out for the location of the holding company that is Optus’s parent company. Thank you, come again.

Telstra -> iiNet: Thanks for being great purchasers of our wholesale product over recent times and buying our backhaul products and contributing to increasing our Wholesale market share success. For this, you can have higher, and much more anti competitive prices. Thank you, come again.

Telstra -> Internode: Thanks for being fantastic customers of our wholesale product line up. Rather than give you a discount for the amount of business you do with us, instead, we’ll wait for you to make a more measureable move. We will rise prices to areas you find key targets, and make it affordable for you to build your own, and when you do, we’ll lower our prices in that area alone, to cut your prices by around 10%. Thank you, the company that loves “making life easier”, Telstra.

Telstra -> AAPT (Telecom New Zealand): We thank you for being great Wholesale customers. We would like to invest in your country also, but we don’t want you bargaining for the same offer back in our country, as that’s unfair. We want to buy your copper tails from you at a reasonable rate, otherwise we won’t be investing at all. Oh, and if you think about investing in our country, we’ll hold you in court for 10 – 20 years or more. Thank you, we love having your busines s, come again.

Telstra -> Netspace: We thank you kindly, for the amount of backhaul products you purchase, espiecially over our Tasmania link (it’s a beautifully aging link isn’t it?), anyway, we want to inform you that for no apparent reason, we wish to put our prices up for you even further. We find your money is good money, and want you to give us more of your money, so please, accept this 400% rise on your fees, you are our number 2 customer. Thank you, come again (or not).

As you can see from the above, the companies involved all contribute to Telstra’s success in many ways.

Telstra on the other hand, don’t like the success these companies bring them, so they make their lives that much harder in any way they possibly can.

To put Telstra on the scale of corporate citizenship behaviour, we have:

Below Average

Telstra is far from a terrible corporate citizen, as you can see from the post above, and the scale above. Terrible for Telstra in its current state would be a huge improvement.

The current management team have really lost the plot, do go look at the share price, dropped nearly 30c in just one week! That’s grade A management for you.

They don’t seem to be doing anywhere near a good job of looking after the interests of shareholders, if they did, they’d take the success that Wholesale year in, year out brings them, and expand upon it, and make it very worthwhile for companies to sign more customers up. Give them commercial incentives to stay a loyal Telstra Wholesale customer, and not roll out their own, or buy from competitors, or get on in with OPEL when they roll out.

They very well could offer more wholesale incentives to ensure they keep marketshare, at least on a wholesale level, because once FTTN and OPEL are moving, Telstra are going to wish it was more co-operative and favoured all the dollars Wholesale chucked at them. An earnings downgrade for shareholders is very likely in the near future, and it’s all Telstra’s management fault, for not realising where the business had the most value.

They destroyed the retail arms as much as possible when they walked in the door, with many being heard that they won’t support Telstra just on the poor experiences from the american management team, but who can blame them. They really are not very good participants in the australian community, attacking the Australian government, the ACCC, racist slurs to Australian hiring companies, hypocrisy, attacks against Australian companies, etc.

They aren’t going to get far doing that, they will destroy the Telstra brand, and it won’t take them much more to do it.

Well done Telstra, World’s Worst Corporate Citizen Award.


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