From: djewell@rhea.trl.OZ.AU (David Jewell - Radio and Satellite Networks)
Subject: Re: Optus v AOTC.  The Facts. (was Re: Cream-Skimming)
Organization: Telecom Research Labs. Melbourne, Vic, Australia
Distribution: aus
Date: Sun, 13 Dec 1992 22:57:04 GMT

In article <6944@otc.otca.oz> brendan@otc.otca.oz (Brendan Jones) writes:
>In short, no.  However, Optus are required to contribute towards the cost of
>providing this service, in proportion to its market penetration.

Is this it's penetration country wide? And assessed by whom? It's more 
expensive to run a payphone in Sydney/Melbourne, due to vandalism, than
say Eden on the south coast so will Optus pay a proportion of those city
costs according to the penetration on the Melb/Sydney market?

>Australia probably now has the most advanced public payphone network in the
>world, with a good mix of coin, coin/card, card and credit card phones. The
>X.25 based credit card phones we have are unique to Australia and one of the
>most damn useful inventions ever.

Say it again Sam. If we already have 'world's best', then I can't see Optus
even trying to compete, not if the ground rules were fair.

>Telecom had a lot of trouble actually costing CSO's because it had never
>been required to explicitly find out what they were in the past.  They simply
>didn't have the cross-divisional accounting practices in place to enable it
>to be calculated.

Now, Telecom has to have in place expensive accounting practices to keep 
track of the CSOs. Does Optus contribute to this increased running expense or
does the Government? 

>BTW, Telecom's Rural and Remote Areas Program (RRAP) was completed this year.
>This program involved the installation of Digital Radio Concentrator Systems
>(DRCS) in remote areas, and a small solar powered radio terminal at each remote
>homestead or location where someone wanted a phone.
>
>As a result, every person in Australia now has access to a fully automatic
>telephone service, and the last manually operated exchange in Australia was
>closed in February.  A magnificent achievement in such a sparsely populated
>country.

Again best in the world. And all this was started BEFORE competition!!

>* Interconnect price.  The interconnect price between Optus and Telecom was
>fixed by Government regulation as part of an interconnect agreement.  This
>price was arrived at after much table thumping an lobbying by all sides,
>including industry lobbyists such as ATUG.
>
>This price is currently set below cost, ie Telecom is required to connect
>Optus to it's facilities at a price below the actual cost of providing that
>facility.  This one of the main reasons that Optus can undercut Telecom in
>some of its long distance rates.

So competition is COSTING Telecom subscribers money. And that's all Australians.

>However, the interconnect pricing arrangement will expire once Optus reaches
>a 30% market penetration, and from then on, Optus will have to negotiate a
>commercial interconnect price.  This is designed to give Optus a reasonable
>chance of surviving aganist a very large and powerful incumbent.

So the government has guaranteed a large slice of the pie for Optus. I wish
I could start a business under these conditions. The foreign owners can't
lose and we in Australia will be paying them.

>Their longer term plans include fibre links covering the golden arc from
>Brisbane to at least Adelaide and possibly Perth.

CREAM SKIMMING, that's what it's called.

>Optus are also beginning installation of their own digital cellular phone
>network, using the European GSM standard (as are Telecom).

Why do we need two parallel systems offering the same technology? It's like
getting some foreign multinational to build a parallel Hume Highway from
Melbourne to Sydney in the name of competition and choice.

>I think it has succeeded, and even though I work for Optus' opposition, I
>think we can all look forward to a much more responsive, technologically
>advanced, and innovative telephone system.  One I think that will easily be
>the best in the world, if it's not already.

If you are wrong then can we go back to what we originally had, an Australian
business wholly owned by Australians?

>Brendan Jones  | ACSnet:  brendan@otc.otca.oz.au               | This space

DJ...