- Joined
- Jan 17, 2001
- Messages
- 8,937
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Not popular opinion, but a race to the bottom benefits nobody.
Yes consumers are happy with lower prices. As a consumer, I want the best value I can get.
However, the flip side is that the telco model is a "high upfront capex, cost-recovery" model. They spend the money to deploy hardware for upgrades, along with the day-to-day BAU maintenance, services and replacements, which are also costly. The challenge is that the telco must also build enough cash reserves to be able to upgrade as needed to keep up.
Where most of us have issues with is that the high telco monthly subscription costs also very visibly contribute to shareholders and management pockets in large payouts. Staff also want higher salaries and are themselves unhappy when they see their big bosses take home lots of money in bonus payouts - for many of them their big boss's bonuses exceed what they would earn in a year including their own bonuses.
The key is to have a bottom that pleases every user and is capped at a balance where there are no obscene payouts to investors and management. But this will lead to possible exits since very few want to be in an unprofitable industry. In pro-business Singapore where Yusof Ishak still calls the shots, this remains a tough, probably impossible, balance.
Yes consumers are happy with lower prices. As a consumer, I want the best value I can get.
However, the flip side is that the telco model is a "high upfront capex, cost-recovery" model. They spend the money to deploy hardware for upgrades, along with the day-to-day BAU maintenance, services and replacements, which are also costly. The challenge is that the telco must also build enough cash reserves to be able to upgrade as needed to keep up.
Where most of us have issues with is that the high telco monthly subscription costs also very visibly contribute to shareholders and management pockets in large payouts. Staff also want higher salaries and are themselves unhappy when they see their big bosses take home lots of money in bonus payouts - for many of them their big boss's bonuses exceed what they would earn in a year including their own bonuses.
The key is to have a bottom that pleases every user and is capped at a balance where there are no obscene payouts to investors and management. But this will lead to possible exits since very few want to be in an unprofitable industry. In pro-business Singapore where Yusof Ishak still calls the shots, this remains a tough, probably impossible, balance.
