From:David Boxall
Sent:Sunday, 29 September 2002 13:23
Subject:[LINK] Perspectives (was: Telstra accounting separation)

Some interesting perspectives in <>, including: "Infrastructure = natural monopoly (no competition) - needs ongoing government investments." Which set me thinking.

If that finding is accurate, Australia's telecommunications infrastructure will impose a considerable financial load on the government, no matter how it is provided. For most of Australia the infrastructure is not, of itself, a viable commercial proposition. The benefits are social, political, military and broader commercial - in other words, common wealth. Governments' responsibility. I wonder, does commerce have any place at all in provision of that infrastructure?

Private enterprise tends to cherry pick - servicing to excess in lucrative markets (remember the duplicate optical cabling fiasco), while leaving others to twist in the wind. That merely siphons off profits that could be better employed in the common good.

From:Chirgwin, Richard
Date:Tue, 1 Oct 2002 07:51:29 +1000
Subject:[LINK] Perspectives (was: Telstra accounting separation)

[. . .]

But you're right about cherry-picking. It's not just a tendency; it's become explicit policy. The work of Peppers & Rogers (how come companies like this are never discredited by their own financial woes?) is a lesson-manual on cherry-picking.

Some years ago, I attended one of Martha Rogers' seminars (as a reporter for a now-defunct CRM magazine). It was probably one of the more depressing experiences of my career; here is somebody who says, from a lecturn, that "if you can't make money from the trailer-trash, get rid of them! Send them to your competitors!"

IOW, the practise of "customer value management" is designed to exclude large chunks of society from participating in that society; and if you can't participate, you can't ever 'climb the ladder'.

Move to the telecomms industry; 'customer value management' is at work here as well. The carriers, all of them, want two things:
1) The chance to cherry-pick the lucrative markets; and
2) Government subsidy (always growing) for the rest.

[Always growing: no matter what subsidy is provided, the analysis will always prove conclusively that the bottom X% of customers is unprofitable, and needs more subsidy. An open offer: I'll give a bottle of wine to the first Link member who shows me someone in the telecomms industry who defies this analysis.]

Richard Chirgwin