The Skype’s the limit

The world’s telcos, particularly greedy telcos like Telstra, got an unpleasant call today, with the news that Skype for the iPhone is about to hit the Apps Store. This is what Intel’s Andy Grove calls a “strategic inflection point“.
The fact that iPhone (and iPod Touch Generation 2) users will be able to make free Skype-to-Skype calls from any Wi-Fi zone, or call landline or mobile phones at rates that are substantially less than, say, Telstra’s, to say nothing of the fact that instant messaging looks a lot cheaper than using SMS means the crazy logic of chaps like Sol Trujillo – “Hey, our customers are dying to pay us heaps of money despite international recessions and the desire to have a little cash for things like food” – is about to be proven the idiocy that it always was.
Trujillo, good riddance, is on his way with his sackfuls of money, but Donald “Bosses aren’t Bastards” McGaughey, who employed him, fostered his bloody-minded attitudes and signed off on his staggering pay cheques, should also be shown the door. These people are dinosaurs, and the world will be better off without them. It simply isn’t good business to be seen always to be scheming new ways of gouging cash from customers.
It also means that – as we observed in our recent piece on coffee-spoon economics – free Wi-Fi is about to become an absolute necessity for any cafe or bar or any business that wants to attract customers to spend time and money with them.
Obviously this won’t happen overnight, but the writing is clearly on the wall.
What the next Telstra CEO has to do is send the managers back to school to learn that the key to business survival is to provide value for customers, to actually serve customers … more than that, to endear themselves to customers. But the board that gave us Sol won’t be looking for someone like that. And even if they were open to change, it won’t be easy to implement. The Telstra culture, essentially, is that the world owes them easy pickings.
If they had any sense, they’d be cutting their capped plans, dramatically reducing the cost of data packs and trying to reinvent themselves. But there’s not a lot of sense around Telstra. We doubt they even realise that their world has just been struck by an asteroid.
LATEST: Telecommunications analyst Paul Budde, quoted in the Wall St Journal, predicts the government may look to award the NBN tender to a coalition of bidders in an open access network that would leave the door open for Telstra to partner its own infrastructure to the network.
He says Telstra currently enjoys “fantastic” margins of up to 60% on its fixed-line network, but it “can’t keep charging monopoly rents forever”.

2 Responses to “The Skype’s the limit”

  1. cafinator

    Charles, your Telstra bashing is a well and truly worn out record. Back in the days of your time on ABC radio you had relevance. Toay it seems your whole reason for being is to vent your spleen about Telstra. I have read enough of your columns to observe you still use their services. Get serious, vote with your feet and get a new record.
    Yes, Telstra charges are high but when it comes to quality and coverage they are the only game in town (even in thbe capital cities). If Telstra prices were hurting their business they would do something about it and quickly. Right now they are laughing as their “competitors” drop their pants pricewise and piss off their customers with crap coverage and throughput.
    FWIW, I have no time for Telstra either. Most of my business is now with other players. I am saving money, most of the time quality is passably OK but it is crap often enough to emind me there is no such thing as free lunch.
    And as for free wifi being a csf for coffee shops, I will share a secret with you; the csf for a good coffee shop is………….good coffee and good service.
    Now I am sure the dog the man in the Telstra truck ran over was lovable and loyal but he’s gone. Get over it, lose the vitriol and get back to dispensing useful information to people who have real problems that need to be solved. You were very good at this.

  2. cw

    “Telstra bashing”! I love the concept. It’s a bit like being savaged by a shark then being accused of cruelty to fish because you punched the thing on the nose.
    The truly hilarious thing about this country is that where in the US and Canada and Great Britain for example, consumers unite to fight back against rapacious companies – and very often force them to change their policies – in Australia the victims actually invent justifications for being ripped off. It seems to be a bizarre twist on Stockholm Syndrome.
    It doesn’t seem to have occurred to you that there’s a huge difference between expecting a free lunch and being robbed blind. And the truth is that you don’t actually go to a coffee shop simply because the coffee or the service is good. You actually go there because it’s what the novelist Henry James described as a “great good place”. Increasingly, the great good place will be expected to provide Wi-Fi.
    Tomorrow the column explores some of the ways in which Telstra is likely to snip hundreds of dollars from you if you’re not watchful. But you wouldn’t want to know about that.


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