hta - almost up 15% today!!, page-11

re: hta - 3g developments Hi extralite,

I will answer your first question. The second, I will prepare a more detailed answer over the weekend (but for mine, I'm comfortable with how they are travelling and how the local operations are helping to anchor the global 3Goperations).

Regarding your first question:
"If TLs do decide to wholesale from HTA for their 3G network, will TLS still roll out their own network in the future do you think?"

My answer to this is, yes, but not until TLS can be certain that their resulting CAPEX commitment will meet their own IRR requirements. In this instance, likely to be a payback period no greater than 5 years.

TLS, therefore, will likely resist rolling out their own 3G network until they can get upwards of 150-200,000 customers of their own on a virtual (ie: or HTA wholesale supplied) network. That would ensure breakeven going forward, however, they may actually commit (given lead times, etc) once they had 100,000+ customers on board.

Starting now, that would take them upwards of 12-15 months to secure (using their own branding and localised product differentiation).

There can be no doubt, Hutchison has hurt them locally, and both Optus and Vodafone have polarised them within the wider region, and at a global level.

If I did not know any better, I would actually argue that it makes more sense for TLS and TEL to merge together and form a trans-tasman communications giant.

Of course, for this to occur, sentiment towards both companies would need to change drastically, T3 would need to occur, enabling legislation would be required, ACCC and FIRB (Commerce Commission, etc, in NZ) approval would be required, certain assets would need to be devolved (including, likely, FoxTel and the cable network), and the general public in both countries would need to be won over (ie: thereby requiring service levels to improve, especially here in Australia).

Reach has also hurt, and will continue to hurt, going forward.

Also, the way in which TLS dealt with the ANZ in relation to Reach (even though they were within their rights to do so - the Reach facilities being non-recourse, etc) suggests that TLS has now earnt itself a powerful financial enemy in ANZ (and MacFarlane, in particular).