Forum Archive Index - June 2000

["Nigel Bree" <nbree@kcbbs.gen.nz>]

Krypt Or wrote:
> Not sure what you mean by market saturation... the next 5 years will see
an
> insatiable demand for bandwidth.

Sure there will be demand, but remember that the fundamental of Telecom's
data revenue business is pricing new services at a level **which does not
disturb the existing revenue streams**. By leveraging their monopoly, they
have introduced what in other countries are disruptive, cheaper technologies
at a price point where there is little incentive for users of existing (and
expensive) services to switch. The problem with that - not a problem for
Telecom, just the consumer - is that it slows overall growth to a glacial
pace, and stifles the secondary market of services that spring up around the
disruptive technologies.

The interesting thing is that the local market is so used to Telecom, and
Telecom's marketing is sufficiently good, that better options don't get
taken up. Look, for instance, at IHug's Satnet versus ADSL (if you're one of
the few people who can even get ADSL, which I'm not) - $70/mo from IHug with
a 3Gb bandwidth cap versus Telecom's offer of about $380/mo (if you pay the
for the modem up-front, which mostly equalizes the install price). And then
compare that to British Telecom offering a full unlimited-traffic 24-hour
ADSL service for UKP39.95 (see www.btopenworld.com for details).

> Also does not AAPT provide growth prospects?

Probably, yes, because the AAPT side will be run competitively instead of
defensively. The overall prospects depend to a great extent on the
environment Telstra sets for them to operate in. It's a fascinating mirror
image to IHug vs. Telecom here - cheap satellite bandwidth versus
monopolist.



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