this started with you lionising your god theresa - i just pointed out a series of bad decisions and areas where tel has been strategically deficient.
i never said that tls is any better. i you may be right tel may be cheap - although i doubt it.
>If the yanks believed the TEL shares were desperately overvalued
they would have sold them already. I know they are trying to exit,
but not at any price. How would issuing more shares to someone
else, help them sell their existing shares?
the two major american shareholders tried to get out in '97. one did a trade sale and is gone, the other tried t be tricky and sell and achieve a premium with the partly paid convertible notes. this backfired and they still hold the underlying stock.
>
>
>i have had exactly the same view for over four
>years. the view is - technology and cheap capital will drive
>the commoditisation of data (including voice). The
>cost of that data is low. the price tel can command
>for that data will be low, due to new entrants.
>
>
>So you think others are going to be able to fund the equipment
>needed for new technology, cheaper than Telecom can?
so you belive tel has more buying power than any other telco in the world? you dont believe that telco equipment providers with not start discounting equipment to new customers - thus making incumbant networks expensive - particularly due to the level of debt used to buy the incumbant networks.
>Do you see any other new entants making a serious dent in the mobile market, the data market?
yes i do - there are at least three data networksthat can operate independently of tel for most of their data trafic - remember that 80% of NZ's data orginates and terminates in the cbd. in two or three years why would tel control this?
I assume you don't see anyone else building a
nationwide network to compete with Telecom? Can anyone else compete
in all the markets that Telecom can? Possibly TelstraClear in
association with Vodaphone might, but that is the sort of muscle it
would take.
>
>
>I agree xtra may have been worth 12.5% of tel, but it was never
>worth $2b. apply the porter model to it - its fails almost every
>test. apply a cashflow model to it, and it still fails. The
>statement was never reasonable and underlines the poor analysis
>and understanding that tel has of its own business.
>
>
>
>Whereas Telstra were smarter with their acquisition of
>their share of Pacific Century Cyber Works business?
as i reitaterate - i never said that i think tls is a good business. I dont see how me saying that tel is not a good investment, or that theresa is not a good manger implies that tls is a good business????
>
>
>the flaw in the aussie strategy. tel have said that they will win a
>a keystone tenant who essentially pays for the network. tel will
>then sell the spare capacity to second tier clients. this assumes
>that the competition for the second teir clients is not as rigorous
>for the first tier. - which is garbage - all clients will be
>contested for strongly.
>
>
>Are you talking about the AAPT CDMA mobile network in Australia?
>That rollout has already been stopped.
no i am not. read your research.
>
>
>tel lost the market leadership thru bad marketing and capital
>decision making (no roaming, mix of digital and analogue etc).
> this has put them into a positon where to regain
>leadership they must develop 2g services market
> - these are services over and above voice that can be offered
> on the gsm network.
>
>
>so tel's mistakes led to this value destruction.
>
>
The TEL analogue system was first in the market. The Vodaphone
system came on stream later and the coverage of the network took a
while to get within cooee of Telecom. There always was (still is?) a
trade off between clarity (Vodaphone) and coverage (Telecom). My
memory is that it wasn't as simple as just replacing the
Telecom analogue repeaters with digital ones. I don't think Telecom
switching over to digital was a simple a strategy to implement as you
seem to imply.
i never sad it would be easy - but they did decide to go with analouge and they did decide decide not to go with gsm, - which has all the cheap upgrade options.
>
>
>so now tel has had to invest money on
>which it can never expect to earn any "first mover" profit,
> and has had to throw a lot of fresh money in a tight
>environment to keep up.
>
>
Why don't you think Telecom can extract 'first mover' profit out of
the 027 network? Would they have had to spend any less money to
establish the network if they came in second to the 2G market?
there is a thing called "time value of money" and they have to spend the time.
>
>
>I would have expected some discussion of how the company is being
>positions to take advantage of the likely outcomes within the telco
>market. there are several well established likely outcomes to
>themes
>-which incidently were around four years ago - see above.
>
>
Ah so you expected her to answer the question *where* will Telecom be
in 5 years time? Now that question is answerable. I don't know
where you got the sound byte answer that you didn't like. Gattung
set the goal to be:
"the best performing customer focused online and communications
company in Australasia"
Perhaps her answer that 'she doesn't know' simply means that she
doesn't want to second guess what consumer's might want in five years
time, but whatever that is she will deliver it?
the "sound bite" answer from the horses mouth at a briefing.
as for her goal - do you really believe every bit of mba bullshit you are fed. how is she going to deliver this? is there one customer than tel has serviced in a way that meets the technology's potential.
another gattung answer is indicative - when asked if tel has implemented the technology they are selling to corporates - she replied "we are not a test site".
so it you have an investment horizon of three to four years (ie planning for a network) and you cant second guess what the network maybe wanted for - perhaps you shouldnt have the job.
this is all academic - the underweight bet is a lot less clear than it was two years ago - when a series of 12/01 $7.50 put option cleaned up.
so you go on loving tel and theresa - cos it takes two to make a market. but you cant not tell me that $15b of value destruction is a job well done. :)
See IRG research reports
