Jeez Grant, you have the ability to make quite simple things...

Jeez Grant, you have the ability to make quite simple things complicated.

Let me go through a few things with you in regards to the operations of wholesale telecoms.

Telecoms is a pretty simple game. Let me elaborate. ATC sell services to their customers, and buy from their suppliers. They make a margin on traffic. All (100%) of the revenue comes from traffic that goes over the ATC network, from UK to HK/Shanghai or vice versa.

To reiterate: If a call goes over the ATC network (say from London to Shanghai), ATC will charge the carrier that the call came from and book that as revenue. It will then deliver the call to its supplier (in this case Shanghai Telecom) and pay a charge for that service. Obviously this is a cost. The difference between the cost and the revenue is the gross margin. This has been running at 35-40%.

That is all there is to it.

So, if it goes on the ATC network it is revenue. If it does not touch their network then it is not their revenue. Period. And this is the way that all telcos, including TLS, book revenue.

Would Telstra book revenue from traffic that wholly went over the SingTel network? Of course not. But if they carried traffic for Singtel in Australia on the Telstra network it would be revenue, as they would performing a service for Singtel.

Similarly when FNT connect to ATC of course the traffic will be switched and carried over the ATC network. They will interconnect in London and ATC will send it to its destination via ATC's network to ATC's suppliers. Again, buy at one rate (from suppliers) and sell at another (to FNT).

How did you come to the conclusion that 'upwards of 90% of the revenue is not theirs'? You should really back up your source and the facts behind that sort of claim. I would extremely interested to see how you back this up.

In one fell swoop you have cast aspertions into the accounting standards of pretty much every telco around. That is a rather large claim.

Also if you would let me know what it is exactly you doubt about China Mobile, I will try to help you out. I