Net usage trends show call price is right: Switkowski

Internet usage trends justify maintaining a 25 cent price tag on untimed local calls, according to Telstra CEO Ziggy Switkowski.

The duration of the average local call in Australia has more than doubled in the past few years to seven minutes from three minutes, he told a Brisbane business luncheon yesterday.

Switkowski linked the rise to the growing use of the Internet by residential and business telephony customers.

The trend is "holding prices up on a permanent basis", he said and disagreed that pricing on local calls is too high compared with the norm in other countries.

Switkowski claimed Australia's local loop access costs were amongst the best in the developed world when factors such as its "extraordinarily large" local call zones were taken into account.

Telstra believes data volumes carried on its circuits will grow by a factor of 100 over the next four years. At that stage, data traffic will be 20 times voice traffic, Switkowski predicted.

Those trends will "require us to rethink the pricing paradigms that are relevant for a community that seeks to be online all the time".

Telstra is moving beyond telephony services into three main areas of content and applications, he said.

One is the media space in which Telstra's "anchor tenant" is its 50 per cent equity in Foxtel. A second is directory services where its Yellow Pages search engines and databases constitute important terrain for the company.

As evidenced by Telstra's recent investment in Computershare, a third area of involvement is the financial services industry which is "big, growing quickly and its processes look as if they can be immeasurably enhanced by Web-enabled e-commerce applications".

Switkowski signalled Telstra's moves in these areas will be based on "the full spectrum equity investments, strategic partnerships, joint ventures and shared projects".

The Computershare investment fitted Telstra's criteria in part because "it is big enough to withstand Telstra's tendency to smother its partners", he said.

As well, Computershare will "positively infect Telstra with an entrepreneurial culture and more expert understanding than we currently exhibit in of these areas".

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