Once a pit bull, Terria is losing its bite

Once a pit bull, Terria is losing its bite

Summary: The inference that Soul, AAPT and TransACT were Dead Telcos Walking long before their withdrawals were announced makes me wonder whether Terria has always been, God help us all, just as flimsy a proposition as Telstra has made it out to be.

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Hercule Poirot, where are you when we need you?

After months of rhetoric and enthusiastic chest-beating, Terria is falling apart at the seams. Whether the company's executives are just discouraged by the lacklustre economy or quietly packing their suitcases for more investment-friendly climes, the group's members are dropping faster than secondary characters in an Agatha Christie mystery.

A Terria billboard in Canberra
(Credit: Terria)

When I first sat down to write this column, I was going to lament the 24 October decision by Soul to withdraw from Terria, but Monday, 27 October brought even more fodder as TransACT quickly followed suit.

These two followed on from the 16 October withdrawal by AAPT, which has decided its money is better spent embedding U-SIM cards in New Zealand sheep. Or something like that.

Once determined to be the pit bull Terria chewing on Telstra's 800-pound gorilla ankles, the Group Formerly Known as G9 is in full damage control this week — as evidenced by its hasty rush to push out a press release explicitly restating the support of the remaining CEOs: Primus Telecom's Ravi Bhatia, Optus' Paul O'Sullivan, Macquarie Telecom's David Tudehope, Internode's Simon Hackett, and iiNet's Michael Malone.

All restated their "rock solid" support for the Terria proposal, yet look elsewhere on ZDNet.com.au and there was Malone, blasting what he called a "mindless political agenda that has nothing to do with customers any more."

"The government has everything shooting in the dark, with a clandestine expert panel and a closed doors ministerial decision to decide everything," he said.

Ain't it the truth.

I wish it weren't, but my column two weeks ago is more and more prescient every day: analysts are now ruminating on whether Senator Stephen Conroy should rightfully suspend the NBN bid entirely. Optus isn't helping anything with its ongoing 3G network dramas, and watching Terria waste away before our eyes is even more distressing to those hoping the NBN will bring about real change.

Bookmakers, grab your calculators. The way things are going for Terria, by the time you read this, what was once the G9 — and is currently the G5 — may well have knocked off a few more recession-spooked carriers (watch out, guys — G1 is already copyrighted by T-Mobile/HTC/Google, although I guess that would just be Optus, now, wouldn't it?)

The geographic spread of the remaining Terria members still gives the company a national footprint; they'll be leveraging their respective geographical strengths to support and manage Terria's nationwide wholesale operation — iiNet in WA, Internode in SA and the NT, Macquarie in NSW, Primus in Victoria, and Optus in NSW and Queensland (uh, wait a minute ...).

That makes sense, but the rapid attrition by once-committed Terria supporters, not so much. If any other members drop out, the whole house of cards could well collapse, leaving Australia's broadband market at the mercy of Telstra and its persistent demands for a vertical monopoly.

(I'm tipping Primus and then Macquarie to go, if anybody's counting, because iiNet and Internode will be fighting for purchase and blasting Telstra even when the tip of the mast is the only part of the Terria ship still sticking out of the water).

Conspiracy theorists, skip to here.

Reading between the lines paints a scarier picture. My warning bells were flashing when Terria and TransACT released a joint statement saying that "as the bid date drew closer it had become apparent that it was in the interests of both companies for TransACT to withdraw from Terria".

Here's the kicker: "This will enable commercial negotiations between TransAct [sic] and Terria to be conducted without any conflict of interest, either real or perceived, among our respective directors."

Am I understanding this right? Terria doesn't want it to seem like TransACT, which sells retail services in the ACT, would have an unfair advantage in negotiations for access to Terria's wholesale network?

If that's actually a real concern and not just poorly placed spin, there's little hope for the other remaining members of Terria either, since all of them also provide retail services and would presumably face similar issues. This is doubly disturbing because Optus has already conceded that the other Terria members were mainly there to bolster the commercial viability for its bid; yet, we are told, TransACT's withdrawal was coming for months.

The inference that Soul, AAPT and TransACT were Dead Telcos Walking long before their withdrawals were announced makes me wonder whether Terria has always been, God help us all, just as flimsy a proposition as Telstra has made it out to be.

"Mr Egan and Mr Mackay said this [withdrawal] was a long-standing expectation by both companies," says the TransACT press release. Looking at the release announced after Soul/TPG withdrew, there's the statement that "Soul has not been an active or contributing member of the consortium ... their announcement today formalises what has been reality for a number of months."

And then there was AAPT chief executive Paul Broad explaining the company's withdrawal by saying "we are at the point where people have to put money into the bid process, and we're not going to be doing that".

Such major decisions aren't made lightly, and the inference that Soul/TPG, AAPT and TransACT were Dead Telcos Walking long before their withdrawals were announced makes me wonder whether Terria has always been — God help us all — just as flimsy a proposition as Telstra has made it out to be.

Is it an alliance of truly committed infrastructure partners, or just a group of fair-weather friends who are now amicably parting ways because the world's economic woes don't make rebellion financially attractive anymore?

Or — and the conspiracy theorists (and Telstra) will love this one — were these departures always intended this way? Was Optus' sole purpose with Terria to help Australia's major ISPs get access to NBN information — including detailed Telstra network information — with its partners, then send them off one by one to go build out a complementary network by proxy as it submits its own Bid To Rule Them All?

Could this be the real reason Optus submitted its own bond? The head spins with the possibilities, and I just wonder who else is going to chicken out of Terria before the 26 November NBN submission deadline. More to the point, I wonder who, having stuck around for sunrise on the 27th, will wish they hadn't.

If Terria can't stop the attrition of its major partners, maybe Optus should just pull the plug altogether and force the government into some sort of sudden-death decision. After all, the government couldn't possibly complete the tender process with just one eleventh-hour submission from Telstra, resigning the country to a lifetime of monopolistic price gouging.

Could it?

Topics: Telcos, Broadband, AAPT, Optus, Telstra, TPG, NBN

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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14 comments
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  • Abandon ship.

    There is no deep conspiracy plan by Terria to pull some brilliant phoenix out of the ashes of the failed turmoil that they have brought upon themselves.

    Their only simple plan was to frustrate Telstra and hope that the Government would separate and damage Telstra and allow their free load on Telstra plant and equipment to continue.

    Now the deception is being exposed and the complete collapse of the Terria mirage will be clearly seem by all. Terria tried to hoodwink Australia and failed.
    anonymous
  • Sydney blows

    Sydney - you have hoodwinked yourself into believing you're not a stupendous knob.

    Unfortunately, you have failed miserably as far as everyone else is concerned.
    anonymous
  • Sydney stand up

    At least he is a person who is willing to stand up for what he believes in. He may open himself up to ridicule, praise or in the case of most people here irrational personal attacks but at least he is open and transparent in this comments. Most all of the other "knobs" out there simply hide behind a button marked "do not display details"

    Bring in mandatory registrations with individual profile pages that way we will not get trolls like you writing crap!
    anonymous
  • Remember

    That Telstra's latest statements suggest it will not lodge an NBN bid if the idea of separation isn't taken off the table -- and it has not yet been taken off the table.

    So technically, Telstra won't be bidding for the NBN either (although we all know they will), while Terria has recommitted to its bid quite recently and seems determined to stick with it no matter how many members are left.

    I guess only two big questions remain: will Terria lose any more members before its constituents sign on the dotted line, and will any other contenders lodge serious bids or will the current financial troubles sour investors completely.

    Interesting times no matter which side you think has the better plan.

    Just under four weeks to go - and then the waiting, rumour and speculation begin.
    anonymous
  • The pressure shows.

    Hi Anonymous, it's sticks and stones to me but really your desperation is starting to show. Best wishes and good health.
    anonymous
  • @sydney blows

    sydney may have hoodwinked himself into believing he's not a knob

    but you have unanimously demonstrated to all and sundry that you ARE without a shadow of a doubt, a super knob, knob.

    love and kisses big boy, mum
    anonymous
  • David, good to see your catching on, finally .

    Your forgeting 1 gigantic point.
    Terria's ATTEMPT at a bid is based on getting " 3 specific regulatory conditions".

    In other words absolutely ANYBODY could win the tender if these (absurd) conditions are granted.

    E.g. 1 condition is -

    Forcing Telstra to become an anchor tenant.
    To pump billions of dollars worth traffic on the network !!

    P.S. Terria is not interested in doing the NBN.
    IT know it cant even if it wanted to, which it does not.
    Its ideal position remains the same after all these years . . . . NOBODY TO BUILD FTTN.
    anonymous
  • The FTTN is worldwide laughing stock

    - Telstra continues with their "if we can't do it our way then we aren't playing" approach, which has been entirely expected.

    - 40% of the Terria partners never really had their hearts in it to begin with, again entirely expected.

    - Kevin 07 and Wayne Goose are still flicking through the pages of the submissions and will probably wait until February 2300 for a response from yet another one of Kevin's working parties for final advice on who to select.

    Why don't we all cut our losses and wait for the next Liberal Government - it is our only chance to get anything like a truly national broadband network. It is also our only chance of getting one without having the Future Fund and the budget bottom line reduced to dust at the same time.

    Labor and Telstra are about as useful as ash trays on motorbikes.
    anonymous
  • Mel's irony

    ROFL Mel.

    It is common knowledge that up until the Howard/Coonan - Sol/Phil spat anyway (a spat which had more to do with ego's than politics) Telstra was and had always been, basically an arm of the Liberal/Conservative Party.

    Just look at Telstra's Mangement with their US Republican/McCain ties, spokes people like Andrew Maiden, Rod Bruem and the new Phil, David Quilty etc. These Telstra movers and shakers and probably many others, all have connections, past and/or present to conservative politics, just like you Mel.

    Also contrary to Terria, CCC, T4 and the rest demanding structural separation of Telstra, the Libs/Nats via Minchin have said this won't happen.

    Plus remember back to '97 when the Howard Government floated Telstra. This was when Telstra officially became the ash tray on the motorbike as you most eloquently put it.

    By doing this Telstra then became a business rather than a service, answerable to shareholders rather than taxpayers.

    All this being so, you unfortunately appear stuck between a Telstra hating rock and a Liberal loving hard place Mel. The irony.
    anonymous
  • Bzzzzzzzzzz

    Telstra was privatised by Howard but it was corporatised by our Labor numbnuts in 1993 and merged with OTC to form the Australian and Overseas Telecommunications Corporation T/A Telecom and later Telstra. Mr Anonymous, it was your labor mates who allowed Telstra to start shoving the corkscrew up the nation's backside and we've been suffering endlessly for it since. Frank Blount, a yank, was the first to start shedding jobs. Then Ziggy came along and shed more. After Ziggy came Sol, who remains committed to shedding even more.

    None of them can blame recession for it because Telstra's strategic plan since corporatisation has been to reduce its workforce from a peak of 90,000 to a planned 40,000 with many tasks done by Australian-based workers now done by machines or by slave labour in India.

    I won't comment on your mention of structural seperation - it is irrelevant to the topic.
    anonymous
  • Find better ways.

    The consumer demand for reasonably priced products force companies explore for cheaper ways to produce those requirements.

    The sad fact is that some people may no longer be required when ways are found to cut expenditure and reduce costs to customers.

    This problem, like death and taxes, will always be with us while we enjoy our high standard of living delivered to us by our competitive system.
    anonymous
  • Phantoms, Mirages and dreams.

    My apologies to all for getting off topic in my above Post. Back on topic and referring to Terria and not long to wait for all to be exposed. Terria tried a con trick to put pressure on the Rudd Government to separate and weaken Telstra, slow progress on the NBN and continue their parasitical ride on Telstra equipment. With no money (and no hope of getting any) how can anyone consider Terria as a genuine bidder.
    anonymous
  • Bzzzzzzzzzzzzz ----- pfft

    Darrien, your entire spiel was irrelevant to the topic. But yet you highlighted but one small area as being off topic? So why did you bother at all? Admittedly, Mels and mine, were also off topic too, though.

    Firstly you assume too much. They aren't my Labor mates, I was simply making an obvious statement which most people know, but some perhaps do not. Telstra are a conservative company, with conservative management with links to the conservatives parties. Sad for them we have Labor/Democrats now in places such as Aust, UK, NZ and the US though.

    However, conservative companies use conservative means to obtain profits, which inevitably means job cuts. So being a conservative yourself (you did say your Labor mates to me, so they obviously aren't your mates, 1 + 1 does equal 2, doesn't it Darrien?). Keeping this in mind, like it or not, being a conservative yourself, you support these job cuts initiatives, even inadvertently.

    Like Mel, you seem stuck between the devil and the deep blue sea too. You are a conservative who suports conservative initiatives, BUT APPARENTLY ONLY WHEN THEY DON'T AFFECT YOU! You don't care if Joe down the road is retrenched, because Joe's an unfortunate casualty of what is needed, to be part of a successful worldwide economy. But when this worldwide economy starts to affect you, all of a sudden it's not quite so wonderful. Typical - ROFL.
    anonymous
  • well okay then

    well, i spose as long as helps the bottom line and all... by reducing costs to consumers? that doesnt help the bottom line, does it syd? perhaps, if we as tesltra were to reduce costs, not let the consumer know, and keep charging, perhpas that will make our bottom line a bit more happier? :P
    anonymous