.. I’ll get to that shortly. However, I want to again recap the update I made earlier, Now We Are Talking went back and placed my post on the website, perhaps a combination of an email to Sydney Lawrence and follow up comments later suggesting they weren’t doing themselves a favour by denying anyone a right of reply.. But that said, it got set to live, and that’s the result I was looking for.

.. and now, presenting the destruction of the landline monopoly of Telstra.

If you thought Telstra had to worry about protecting fixed line revenue and fixed line services with threats like VoIP and ADSL2+ services, you haven’t seen the end of it yet.

Competitors are more and more seeming like they can make better investment decisions that see themselves in a successful light when they make investment decisions that don’t include Telstra gaining a dollar from them.

Case Example 1: Optus Australia Pty Ltd:

Optus have several services in Australia and are infact the number 2 telco in Australia supplying services to many Australians.
Optus have began offering ADSL2+ services to a large number of Australian Exchanges (except mine, so get a move on Optus) with their own infrastructure, and migrating customers away from Telstra Wholesale and onto their own infrastructure.

Optus also recently announced: If you can’t get on Optus Infrastructure, we don’t want your money. Simply, there isn’t enough money to be made when you are reselling the monopoly giants price squeezed services.

If you want a profit, stay the heck away from Telstra Wholesale.

Optus with partner Elders have the OPEL deal as well, which will give Optus and Elders a combined network out through Regional Australia, and could also perhaps become the ground for their extension into 3G services for the Virgin Broadband offer (Virgin and Optus are very close in bed together).

Case Example 2: iiNet Limited

iiNet started off reselling Telstra Wholesale services for their broadband.

iiNet quickly realised that if they were going to make some real money, and put some real money in the bank, they would need to stop giving 80% plus of their broadband revenue to Telstra Wholesale.

iiNet gathered a customer base together. They did this by using the advantage supplied with PIPE networks peering arrangements and created some of the best value plans in the industry at that point in time.

iiNet still needed more growth in their numbers across Australia to find a demonstratable plan for their own network, which would quickly see the profits from the user revenue somewhat increase as a long term investment.

Remember, iiNet didn’t say: we’ll put a DSLAM here and in 3 weeks we’ll be millionaires. It doesn’t work like that.

iiNet would likely have thought, we’ll invest in a DSLAM network and using that DSLAM network we’ll be able to provide services to customers for long term profit gains, so he called the bank, asked for a few million to get started, and off he went, with infrastructure in more than 200 exchanges in Australia, iiNet are now slowing down to a average pace.

And from both those examples, you can see, the motive isn’t their because Telstra are worth cherry picking, if you get your revenue dollars away from Telstra, you make money! It’s that simple. Stick some infrastructure in, get it loaded with customers, and viola, long term profits are just a few years of debt repayment away.

The same theory applies to the G9 network.
They aren’t trying to screw Telstra, that’s why they didn’t come out and say, we’ll get you back for all the shafting you did to us over the years and make Telstra pay 50%+ profits to make up for lost revenue (or whatever claim Telstra chooses to make when competitors invest, duplicate, etc.).

So Virgin’s offering is basically behind the theory that they’ll give NextG a stiff kick in the rear, sort out the long running problem that users in some areas can’t get ADSL based broadband, and NextG is far from a broadband service if you can only afford to use it for 15seconds.

The offering: $60 per month, unlimited landline calls to anywhere, unlimited Virgin mobile calls, and regular rates to calls to other areas, and includes a average of 512kbps (burstable to 700kbps+) broadband service with 4.0GB data.

The next capable Telstra offering (no bull): $89.95: Unlimited calls anywhere. $29.95: 256k broadband service with 0.2GB data. This comes to a pathetic total of $119.90, 10c short of double the Virgin Broadband offering, and the Telstra offering isn’t mobile!

Again, I ask, who has Australian’s at heart here? Who is looking after the Australian? Who is looking after the possible foreign shareholder?

We all know the answer here.

Virgin with some good marketing could be a sure hit, and with Optus expanding network coverage to 96%, we can almost likely see a certain decline in PSTN lines as consumers who see a sense (I don’t, I trust my landline, even if we shouldn’t trust Telstra) in disconnecting it, and leaving it unplugged causing Telstra to find more competitive outcomes.

But this doesn’t affect JUST Telstra, we could see Optus enter the market and do similar as a retail offering, and Vodafone want a cut of the action too, and AAPT, Exetel, Netspace, iiNet and Internode wouldn’t want their customers dropping their offerings for the $60 offering.

It’s a hard offering for ISPs to match where they only have Telstra Wholesale access, so we could see a shakeup in plans, or see more investment happening.

The big stopper for investment is FTTN or FTTH. Because if Telstra gets the go ahead, there goes any chance of competitors seeing incentives to invest, why would you when you can only reach 66% of the market because FTTN means higher prices.

So, we can be sure that Telstra won’t be building FTTN if the government wants to see investment continue, they simply don’t want to destroy competition for Australians for another 14 years by allowing Telstra to do what it has done for several years already, screw the competition at any cost, and the ACCC and any ISP who has successfully taken Telstra on and won is complete proof of this, even more proof lies where Telstra challenges the ACCC (several times) and failed (several times).

We can’t have more of that.

Virgin’s offering, is just another brick in the way of stopping Telstra using such tactics, as they will want to maintain marketshare.

Here’s a statistic for all you people out there:
Since competition first began, Telstra’s marketshare has dropped, starting from 100%, Telstra now only has 45% of the market it started off with.

That speaks volumes if you ask me: You want better deals, don’t hang around with Telstra, they are no where to be found.

Enjoy.