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Telstra calls for near halving of NBN wholesale price

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(Image: Corinne Reichert/ZDNet)

Australia’s incumbent carrier has said something needs to give when it comes to reselling services on the National Broadband Network (NBN), as current arrangements are unsustainable.

Speaking to shareholders at the company’s annual general meeting in Sydney on Tuesday, CEO Andy Penn said Australians are paying some of the highest prices in the world for broadband, and that the price is likely to continue increasing unless wholesale charges are addressed.

“The current arrangements are unsustainable, and ultimately this can only lead to poorer service and higher prices for broadband for all Australians,” Penn said.

“[The wholesale price] has to come down, and not by AU$2, but by more than AU$20.”

Penn said the rate charged by Telstra and set by the Australian Competition and Consumer Commission (ACCC) to its competitors for ADSL services is around AU$20, while NBN is charging AU$44 per month currently, and is set to increase to AU$51 by 2022.

Telstra is expecting that by the time the NBN is completed, it will part with AU$2.5 billion each year to NBN, which is part of the reason why the telco is implementing its Telstra2022 plan.

Must read: Telstra2022: Key takeaways from Telstra’s new strategy

Chair John Mullen said the company had believed there could still be money made from selling NBN services until recently.

“The NBN will have reduced Telstra’s net profit after tax by close to a half when fully rolled out. Not a few per cent, half,” Mullen said. “Having been privatised by the government in 1997, the government is now effectively re-nationalising half of the company again.”

“To give some scale to that impact, what we are losing through this policy of half our business is approximately equivalent to a company the size of Qantas.”

In its August full-year results, the company reported net profit of AU$3.5 billion, down 9 percent, on AU$26 billion of revenue.

The telco reported customer base growth across both fixed and mobile.

On the back of reduced profitability, lower dividends, as well as planned job cuts as part of Telstra2022 and protracted bargaining negotiations with staff, the company is fighting against plans to vote down proposed executive remuneration.

“I personally believe that executive salaries are too high across the board, but changing this takes time and needs to be embraced by all of corporate Australia, not just one company or one industry, as the marketplace for talent is international and is industry agnostic,” Mullen said.

“We are trying to do our bit in Telstra, however, and this can be seen by the fact that David Thodey’s salary was lower than Sol Trujillo’s, Andy Penn’s salary is lower than David Thodey’s, and I expect that Andy’s eventual successor will receive a lower salary again.

“Andy himself has seen his actual remuneration drop by almost 50 percent over the last two years as the company has been under pressure, so we are not only reducing overall remuneration levels, but our remuneration clearly does flex downwards with shareholder outcomes, even when management has done a good job.”

Speaking last week, Shadow Communications Minister Michelle Rowland argued that with the majority of NBN deployment in motion, the political debate must shift from its technological makeup to the future of its economics.

“The NBN rollout has also reached a point where it is almost entirely in design, construction, or deployed — a reality which cannot be undone through political will or legislative change,” Rowland said.

“As a result, there is likely to be less emphasis on the issues which have been the focal point for the last five years, and a greater focus on the medium-term policy settings — namely, the economics of the NBN.

“Looking forward, this becomes the main game … it would be sensible for the major parties to identify common ground on the next steps where feasible to do so.”

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BMW iX5 Hydrogen Production Starts, But Don’t Expect To See This Fuel-Cell SUV In Dealerships

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The reality, though, is that even with a small number of BMW iX5 Hydrogen SUVs being produced — using individual fuel-cells supplied by Toyota, but assembled into a stack by BMW using the automaker’s own processes and technologies — the expectation is that hydrogen as a fuel will be predominantly of interest to non-passenger vehicles. Instead, it arguably makes the most sense, BMW suggests, for larger vehicles like medium- to heavy-duty trucks, along with the marine and aviation sectors. We’ve already seen Toyota reveal its plans for such an FCEV truck.

Despite that, and an acknowledgment that battery-electric vehicles will undoubtedly lead in the mainstream, BMW still believes there’s a place for FCEVs. After all, the automaker argues, if the infrastructure is being built to cater for trucks, there’s no reason not to also use it for passenger vehicles like the iX5 Hydrogen.

The results of the small-series production beginning today will be used as technology demonstrators across select regions from spring 2023, BMW says. It’s unclear at this point how many will be built. Depending on the reception and the strengths of the technology, series production of a first model could follow mid-decade, ahead of a potential full portfolio of BMW FCEVs from the 2030s onwards.

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Tesla Set To Deliver The First Semi To Pepsi

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In October, Tesla’s CEO revealed that the production of the Tesla Semi had begun, and it was bound to be delivered today. Tesla has already started the countdown, and we expect the unveiling event to go down at the Nevada factory. The electric truck will be dispatched to Pepsi, which had ordered 100 units. Investor reports that Tesla’s stock price increased by 7.7% on Wednesday, probably in anticipation of Tesla’s Semi first delivery.

Musk tweeted on Saturday that the “Tesla team just completed a 500-mile drive with a Tesla Semi weighing in at 81,000 lbs!” However, considering that Musk said that the company is dealing with supply chain issues and market inflation, it’s unclear if Tesla will stick to the original $180,000 price it intended to sell at when it was announced in 2017. Then again, Tesla offers a cheaper Semi that will be available for about $150,000 — but it can only achieve up to 300 miles at full load capacity. For now, we can only wait until it’s on the road to confirm if the specs match up to what was promised five years ago.  

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Coinbase Joins Elon Musk In Slamming The Apple App Store Tax

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Coinbase complained that Apple’s insistence on its cut unreasonably interfered with its business.

Coinbase’s argument was largely the same as Elon Musk’s, and the basis of Epic Games’ aforementioned lawsuit. According to all of the above, Apple was half of a duopoly: with Google, it controlled the global app marketplace. The “duopoly” part of the argument is pretty much incontrovertible: As of October 2022, both Apple and Google control 99.43% of the global smartphone market between them (via StatCounter). Both get a 30% cut of everyone’s action on its marketplace. From the perspective of Coinbase, that took too much money out of too many elements of its business.

Epic sued over that and, as noted above, won with an asterisk. Apple had restricted in-app purchases, and courts found that anticompetitive, but did require that Apple get a 30% cut of the profits, even though they took place in someone else’s app. In short, according to the Verge, the court said that if you’ve found a way to make money using iOS, you owe Apple 30%, period.

Epic thought in-app purchases should be exempted from the tax. Coinbase thinks elements of the NFT development process — in this case, gas prices to run the processing equipment necessary to mint NFTs — should be exempt from Apple’s app tax. Apple treats all user expenses on an app as in-app purchases and, per the Epic court decision, in-app purchases mean Apple gets a cut.

It’s not a simple problem, and it’s not likely to be solved anytime soon. Stakeholders and regulators have barely begun to integrate cryptocurrency and NFTs into the conventional marketplace. Who gets paid for what is likely to be a conversation for years on end. For now, all that’s certain is that conversation has begun.

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