I've posted in past how using scale telco companies in Oz grew...

I've posted in past how using scale telco companies in Oz grew very quickly. TPM did particuarly well. Scale means yr fixed costs stay almost exactly the same so each additional customer produces earnings with a huge profit margin. Past few years has seen massive consolidation in the industry and TPM sits in #2 and #3 spots re internet and phone.

But 2 things have happened. We are now at saturation point re penetration of mobiles and internet connection. Secondly, the cost of phone calls, internet quotas has fallen dramatically. Prices will continue to fall as telcos fight for mkt share. Hence, profit per customer has dropped considerably and there's nothing telcos can do about it as customers search for the best deal. Internet sites allow them to pick and choose a plan that fits their needs at cheapest price.

Last night Channel 9's 'Current Affair' compared various phone plans that have been released for 2016. Many companies offer free texting, free this and that along with much reducedentry price. Hence, the macro in telco industry has changed and earnings going fwd will tell a different story. I'll try to post the Channel 9 link later today. I remain short in TPM.