Bugger. End of telco era not nigh You have to hand it to the Vodafones, Telecoms and 2 Degrees of this world: by successfully gaming regulation and duping gullible governments ignorant of technology, they’ve managed to stave off the death of their last-millennium businesses.
In fact, they’ve developed it further so that we now pay per time quantum and monthly connection subscription fees, as well as for data blocks. What’s more, we’re made to pay in advance for calls and data, even though we don’t use up the metered quantities.
Telecom’s last set of results bear witness to that. Ignore the profit fall and look at the revenue, which is pretty much unchanged at over $5 billion, despite sizeable changes to its business like building a completely new mobile phone network. The story for Vodafone is similar, with $1.5 billion revenue and TelstraClear raked in $703 million. Much of that money comes from metering time and counting bytes of data.
Except, the metered charges model is largely meaningless from an internet perspective where you should pay for connection installation and maintenance, as well as the throughput over it. This is what telcos do, for instance when they use internet circuits to route voice calls. Why pay high per-minute circuit-switched rates when you can use cheap packet data? Just don’t tell the customers you’re doing that with their metered fixed line and mobile calls.
If you’re one of the lucky few in New Zealand that have correctly-priced broadband — $40 a month or thereabouts — you should definitely use it to evade some of the extortionate calling charges imposed on us to prop up a dead business model.
Telcos like to talk about how much they invest in New Zealand and how bad it would be for the economy if they didn’t. There’s some truth in that, but how much of that investment goes to New Zealand companies? How much is sent overseas? And, where does that money come from to start with? Remember too that we’re talking about telco-priced gear with enormous margins.
Do these investments represent good value for money? For the telcos, especially the three above that rake in over $7 billion a year in revenue, they most certainly do. For New Zealand though, it looks like a bad deal. The government believes three-quarters of the population can have its present and future telecommunications needs met by rolling out high-speed fibre-optic connections for $3 billion, and that really puts the present telco rort into perspective.
What the telcos fear more than anything is an Internet Protocol world where their networks do what customers want, which is to reliably punt packets at high speeds to permanently connected end-points. Cheap or even free and ubiquitous internet-routable IPv6 addresses for each and every one of us would be a great start, so don’t expect your local telco to hop onto that bandwagon until forced to do so.
Instead, thanks to the telco stranglehold on the local IP connection market, we’ll all use NAT (network address translation) soon while IPv4 addresses are doled out at extortionate rates.
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