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The Telcos Keep Making Money!

23 Aug, 2009    (By: Chris Mahoney)

Views: 2355

This is a question I get asked from time to time…does Call Limiter really save money? If I hang up the phone, every time, within the time limit I allow myself…will I save money?
It would be easy for me to say “Of course it will”, but perhaps some details on how Telcos make their money, from an unbiased source, would add some weight to the discussion.
Here is an article published in August 2009 about the biggest Telco in Australia – Telstra, who are no longer after more market share, just revenue. But read on…….because they call this making money “customer service”
In order to preserve this story (in case the website takes it down after a while) and to emphasize some points, I have copied it here. (BTW – PSTN is the normal public telephone system)
What recession? Telstra, Optus profits in double digit growth
Telstra’s financial results hit an “important inflection point,” with mobile revenues outpacing PSTN for the first time. The company’s full year results showed significant gains in mobile, mobile data and wireless broadband services in operation against a 4.9% drop in PSTN revenues, with CEO David Thodey noting Telstra’s ongoing balancing act between boosting mobile profits and increasing subscriber numbers.
“A very important inflection point happened this year,” Thodey said.
“Mobiles revenue is now bigger than our PSTN revenues. That is the first time in a year that we’ve ever had that happen. So we are now $500 million of mobiles revenue greater than our PSTN revenue.”
Mobile revenues now account for 27% of Telstra’s total sales revenue by product, up six percentage points this year, while PSTN now accounts for 25%, down ten percentage points. Mobile services revenue growth hit 10%, up $553m to $6.1b, while total wireless data (including SMS, handset data, and data cards) was up 31% to $2 billion.
“This is a very strong result,” Thodey said. “Notably, 30% of our domestic sales revenue is now wireless, mo- bile retail SIOs [services in operation] are up 9%, 3G SIOs up 45%. I want to stress, the movement of our base across to the Next G network is very important. Wireless broadband [data card] SIOs are now over one million – we had 99% growth year-to-year, and mobile ARPU blended was up 4.8%.” Telstra now has over 10 million total mobile services in operation.
Data now represents one third of mobile services revenue, with data card revenues up 69.2% over the year to $587m.
Thodey said Telstra will continue its strategy of prioritising high-end customers over increasing market share. “We think we’re at a slight loss in our mobile SIOs and revenues,” he said, referring to Telstra’s market share. “We’re balancing share and revenue with profitability... to drive revenue growth and profit growth is what we’re focussed on. The number one objective with customer service is for this company: profitable revenue growth, not growth at any cost.”
Unsurprisingly, as for every company, their number one objective is more revenue.  But hang on, they don't want to get it by expanding market share - they want to get it from their existing customers ("customer service")!
You cannot tell me that Call Limiter isn’t going to save you money!  Not convinced?  
Just think - if you stopped your calls before the next 30 second charge (say, at 4 mins instead of 4 mins and 1 second), foevery phone call for a week:
-- you'd be saving nearly $2 per week!  And that is only if you make 1 call per day on an average plan --.
You didn't think most Telcos switched from charging in 1 second call increments to charging in 30 second call increments for no reason
…did you?

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