steve, I was with Telstra business dealer and consumer shop in last two days. we have a pooled contract for all our team (around 10 hand sets) and i wanted to understand the options going forward. you are right about the simplicity of the new plans. my take is that they know phones can be sold by anyone and TLS competitive advantage is the network and they clearly see the value in selling use of data - that's the key trigger for higher cost plans. I guess it makes sense as more people are becoming heavy data consumers. it will be interesting to see how much margin is in the handsets - they are vey expensive these days - mind you they are also very powerful. I guess most people are getting 2yrs from their hand set and paying $1000-2500 for it. lets say 1600 on average so 800 per year. if the margins are 50% (I have no idea by the way) that makes $400 pa. if they choose to pay per month then its $100 per month over two years so not too much difference. for the they connection - if they pay average $80 per month for plan, and the margin on that is 65% (stab) then that is $52/month or $624 per year so very roughly it seems there is similar margin pool for both the connection and the handset as long as people get both with them. if the TLS share of the overall market grows because their plans have better appeal now that they are simple then maybe some upside volume here for TLS and VTG (putting aside the pricing issue between TLS and VTG).
VTG Price at posting:
$1.31 Sentiment: Hold Disclosure: Held
