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Strategies & Market Trends : Moomin Valley (formerly Troll-free Zone)

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To: Moominoid who wrote (1166)	10/11/2005 4:10:02 AM
From: Maurice Winn	Read Replies (1) of 2852

Telecom NZ is not likely to reach much beyond NZ and the AAPT effort came a gutser. Telecom NZ enjoys a healthy monopoly, more or less and there are only two cellphone service providers in NZ, with world-class high prices. But I expect Telecom to find their profits eroded and I am planning that now. Many people are looking for piece of the action and there are many marginal operations nibbling at the fringes. Several years ago, when Telecom was on the verge of spending about US400 million on a huge TDMA expansion, I spoke to Theresa Gattung [now the CEO] who was not then the boss and they subsequently dropped the TDMA expansion and went to CDMA. Lucky for them. I have wondered whether my conversation had an impact. I explained CDMA for 20 minutes or so, so she was obviously listening with interest. Rightly so too. In Feb 1996, I got James Person of QUALCOMM Singapore out here to try to get Telecom to go to CDMA, but Telecom decided against it. Crazy people!!! They spent a lot on TDMA, lost a lot of market share to Vodafone and are only now catching up again and gaining ground nicely. They seemed to have trouble deciding to do sensible things. Woosh, Slingshot, and others are chewing off bits of business. So are others. I can't see how Telecom can maintain their profits for many years. There are too many ways of their business being eroded and profits being competed away. It does NOT cost NZ$1.34 to provide cellphone service, which is what they charge a LOT of people. Something like NZ10c a minute would be more reasonable and still not cheap. Mqurice

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