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PUBLISHER’S LETTER www.siliconchip.com.au Publisher & Editor-in-Chief Leo Simpson, B.Bus., FAICD Production Manager Greg Swain, B.Sc.(Hons.) Technical Editor Peter Smith Technical Staff John Clarke, B.E.(Elec.) Ross Tester Jim Rowe, B.A., B.Sc, VK2ZLO Reader Services Ann Jenkinson Advertising Enquiries Phil Benedictus Laurence Smith Benedictus Smith Pty Ltd Phone (02) 9211 9792 Fax: (02) 9211 0068 info<at>benedictus-smith.com Regular Contributors Brendan Akhurst Rodney Champness, VK3UG Julian Edgar, Dip.T.(Sec.), B.Ed Mike Sheriff, B.Sc, VK2YFK Stan Swan SILICON CHIP is published 12 times a year by Silicon Chip Publications Pty Ltd. ACN 003 205 490. ABN 49 003 205 490 All material copyright ©. No part of this publication may be reproduced without the written consent of the publisher. Printing: Hannanprint, Noble Park, Victoria. Distribution: Network Distribution Company. Subscription rates: $83.00 per year in Australia. For overseas rates, see the subscription page in this issue. Editorial & advertising offices: Unit 8, 101 Darley St, Mona Vale, NSW 2103. Postal address: PO Box 139, Collaroy Beach, NSW 2097. Phone (02) 9979 5644. Fax (02) 9979 6503. E-mail: silchip<at>siliconchip.com.au ISSN 1030-2662 Fixed line phones no longer a necessity This month’s feature story on “Unwired” internet access must worry anyone who has Telstra shares. Why? Because Telstra’s customers no longer need a fixed line telephone service to obtain internet access. Up till now, if you wanted internet access, whether dial-up via a 56K modem or an ADSL broadband service, you had to have a fixed line telephone service. The exceptions would be if you had cable TV, in which case you could have a cable modem for internet or you might have used a satellite internet service. For the vast majority of people though, a fixed line telephone was a necessity. Of course, if you don’t need internet access and you already have a mobile phone, you have not needed a fixed line telephone service for some time. In fact, tens of thousands of people living in rented accommodation throughout Australia have long ago opted not to bother with a fixed line service. In doing so, they avoid installation charges which are hard to justify, since they normally only require a few minutes work by a technician at the local exchange. They also avoid monthly rental charges, high STD phone charges and so on. For a person who makes very few phone calls, a prepaid mobile is definitely the way go. There are no rental charges, you only pay for the calls you make and incoming calls are free. Why bother with a fixed line telephone? This is a world-wide trend, with the number of mobile phones rapidly exceeding the number of fixed line installations. In fact, many developing countries look to be leap-frogging the large infrastructure cost of fixed lines and just adopting mobile phone services instead. In Australia, one could foresee a situation where most private individuals do not have fixed line phones – they would be confined to businesses and organisations. And then you have to factor in the concept of “Voice over IP” as described in last month’s issue – for virtually any telephone calls. Large businesses are already migrating to VOIP for long distance calls and small business and private individuals will largely follow in the future. So even if they keep their fixed line telephone systems, they will be using VOIP and ADSL to cut their long-distance phone costs. All of which does not augur well for Telstra. It has an enormous investment in its fixed line network in which it has a monopoly. But it doesn’t have a monopoly in mobile phones where it is being buffeted by intense competition by some very aggressive players. So unless there is some new development which encourages customers to take up more services involving fixed line telephones, one can only see Telstra’s fixed line revenues being severely eroded in the future. Sooner or later, and probably sooner, the investment pundits will realise this and the shares will go down accordingly. This is yet another example of the inexorable march of technology. At one time, steam engines and horseless carriages had a very big market but they fizzled to nothing. What can Telstra do? In the short term, it might like to buy Unwired Australia! Leo Simpson * Recommended and maximum price only. 2  Silicon Chip siliconchip.com.au