I think Australia is suffering from the 'Northern Hemisphere' disease of breaking up carriers. This has been created by the likes of BT and AT&T. They were broken up into lumps with substantial returns from some divisions and modest return from others. Trendy highfliers were only looking at the increased shareholding at the time, not the long-term view.
It is selfish and naive for analysts to make such recommendations and I wonder why management takes them into consideration. Have they lost confidence? They seem to be rushing back towards running a narrow business, and I wonder what the major driver is, since the concept ignores the customer.
Breaking up carriers may make the analysts happy, but not the market.
Cable & Wireless Optus' breakup has been driven from the Northern Hemisphere, and I believe it will have a devastating impact on the industry's competitive behaviour in Australia. Australia has really nurtured Optus. The breakup has the potential to allow Telstra to become more dominant and to turn back the progress made for a competitive market in Australia. This hasn't been spoken about much, and it's not Telstra bashing, but a desire to see a competitive marketplace in Australia. The sad circumstance is that we haven't yet seen a robust competitor to Telstra in the local loop in Australia. I had hoped that Optus would be a major player, but the marketplace and corporate pressure has militated against competition and the ability of the customer to choose a carrier.
Business customers really want to shop around and they want competition. Ultimately, they want to deal with a provider with confidence and be able to place all their business with one or two carriers so they have competition and redundancy, good for when a cable does go down as happened this week.
Customers want to establish relationships and communication services. They don't want to make technology decisions; for example "which provider should I use for my mobiles?" The industry is trying to focus less on technology and more on service, but it is not working. Also, government and regulators shouldn't choose technologies. Choosing technology is a short-term business, with a rapid rise and decline.
Customers want good quality, general, multiservice carriers that offer them all the communication solutions, instead of narrow options. The industry needs to look at what happens in other industries. There are plenty of other examples of industries being multisector; why can't telecommunications be like this?