Forum Archive Index - April 2004

["Karyn W" <karyn_in_oz@hotmail.com>]

Hi
What MUL do is buy bandwidth from a satellilte owner, and onsell it in 
various guises with a margin to customers.  They do not do anything 
different from any other telco or ISP, it is only the technology that is 
different.  If you rang Telstra, Optus and AAPT they will all be able to 
sell you the exact same service that MUL provides.
However, whether you are a reseller of fibre, ATM, xDSL, copper, cable, 3G, 
or satellite bandwidth, the business model is the same, the competitive 
issues are similar, the services delivered over the bandwidth identical.  
The choice of delivery mechanism of these IP services depends on 
availability, price, and suitability for the service.  The market for 
satellite bandwidth is actually a niche one - as landline access is now 
pretty ubiquitous, and where it is not, mobile providers are moving in (eg. 
Africa, Iraq)

All major telcos and many ISPs use satellite bandwidth in some form or 
another, as it used to be a lot cheaper than buying fibre (up until the big 
cables like Southern Cross came online, then the price differential went the 
other way).  Nowadays the most common reason to stick with using satellite 
is to provide an alternative redundant path to the land-based cables, ie. in 
the event of Southern Cross or its ilk being damaged, the Internet traffic 
can be routed via satellite.  This is one reason why Defence services like 
it - it is less vulnerable to physical interference than land-based 
transmission mechanisms.

Ihug (part of iiNet) in NZ and Australia has been offering satellite 
services since around 1996 - http://www.ihug.com.au/getultra/satellite.html 
- both at a consumer and wholesale ISP level.  However, its limitations 
(such as rain fade) have meant that it is not preferable to a land-based 
technology, and therefore never really took off.

I've worked for telcos/ISP's since 1995, so I'd like to warn people to not 
be snowed by the profilic use of technology terms, the steady stream of 
press releases, announcements of "big contracts", etc because I've seen it 
all before, and I know that the reality is that they dont mean anything! The 
fact that they have to announce these things at all (when every other 
telco/ISP treats similar deals as business as usual) just signals how 
desperate they are to con the uninformed and technology illiterate public.

(For the record, I also have issues with the bullshit that SKG announce on a 
regular basis for the same reasons - most of the stuff is so passe now that 
their "deals" are simply copying what other providers have already been 
doing for several years now.  For instance, I was discussing wireless 
broadband global roaming with iPass back in 2001!)

MUL is a small company, operating in a global market, with no competitive 
advantage, subject to intense competitive pressures due to oversupply, a 
market dominated by large telcos with very deep pockets, and with new 
entrants (eg. 3G providers) set to erode their market niche.   That is not 
to say that they are a bad company - they may be around forever, they may 
make profits and even provide a good return on capital, but the fact is is 
that in this industry things change so quickly that crystal ball gazing is 
damn near impossible - after all, a few years ago we were all certain that 
grocery shopping and buying pet food online was going to be huge too!

I am a cynic - if I saw a run of "big" announcements followed by a director 
selling out, then I'd be doing the same!

I think David said it best ("Lets party like its 1999), and add that "those 
who do not learn from  history are condemned to repeat it".

Now on an upside - if you do want some decent tech stocks to invest in, then 
take a look at TNE, VGL, DTL on the ASX (all pay a 5%-7% dividend) and RNS, 
PVO on the NZX.  I prefer to "invest" in tech, not "speculate" - as I learnt 
my lesson in the 90's and will not repeat it :-(

Karyn

_________________________________________________________________
Get Extra Storage in 10MB, 25MB, 50MB and 100MB options now! Go to  
http://join.msn.com/?pgmarket=en-au&page=hotmail/es2


----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/