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| Issue No 120 |  |
23 November 2001 |
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NewsTelco Industry Growth Hits The WallBy Dale Keeling
In the vicinity of 15,000 jobs have been lost from the telecommunications industry over the last 18 months and the Communications Union (CEPU) believes that many more will follow. Optus announced another 344 permanent staff and 217 contractors in November to follow the 350 jobs lost by the SingTel subsidiary in October, almost 10% of the company's workforce. The One.Tel collapse cost up to 4,000 jobs - possibly more - whilst Vodafone is getting rid of more than 1,000 workers in addition to 365 in May. On top of that Telstra is always disposing of its loyal workforce - 12% of staff last year - whilst small contractors and re-sellers are going to the wall all the time. Hutchison Australia said last month it would cut 450 jobs. CEPU NSW T&S Assistant Secretary Mark Brownlow told Workers Online that poor management and a get rich quick attitude to the industry was at the heart of the very serious problems now being experienced. "The idea of raising capital and installing infrastructure as a means of generating long term capital growth and profits is anathema to many senior executives these days. Technology to them now is just a means of making millions of dollars in a very short time, then moving on to something else. "Plus we now have the SingTel problem - which is very reminiscent of Air New Zealand's takeover of Ansett - where the principal company has paid far too much and now will ride the wild tiger trying to meet the debt costs." Optus Chief executive Chris Anderson has warned that the company's 2002 profit would be "significantly down" from the $426 million posted last year much of which was composed of one-off items. He had rather optimistically forecast double-digit growth figures but these have been reduced substantially and analysts now suggest that 7% would be a good outcome. Optus has up to now been able to post figures of 20% growth. Announcing his Operation Win Through razor-gang measures in August Anderson thought that profits could be kept buoyant by slashing hundreds of jobs from the pay-roll. Not surprisingly the opposite is happening. Designed to save the company between $75 and $100 million - which they will most probably do - Anderson is finding that revenues are continuing to fall. This year Europe's top 20 phone companies alone have collectively lost $US853 billion in market value on concerns of falling profits and higher spending. For Mark Brownlow this is not surprising. "One of the structural problems that all the telco players other than Telstra has is that they all want quick results particularly as executive bonuses are based on these artificial results. So the telco boom of the 1990s was based on mobile and associated growth. Now we have 60% mobile penetration and not unnaturally they've all reached stalemate. Their executives whinge and moan about Telstra having access to the terrestrial network as a whole but they want it for nothing now that they've hit the wall." But according to Mark it's not as if everyone is expected to suffer. "Whilst thousands of Optus workers are getting the bullet it is worth remembering that Chris Anderson received a salary and bonus package worth up to $10 million from the SingTel takeover."
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   Interview: Civilising CapitalPeter Butler is a global investor with a difference. He believes that environment, shareholder democracy and workers rights make good business sense. Industrial: All In The Family In his opening submission to the landmark case, ACTU assistant secretary Richard Marles argues working hours are vital to life. Unions: Saving CinderellaIt is a modern day fairy tale - a Cinderella from the suburbs, worked like a slave from morning to night injured and then abandoned. International: Recognising ChinaGough Whitlam draws the links, past and present, between recognition of China and the continuing struggle to achieve a genuinely inclusive Australian democracy. History: The Speakers SquareA new book lifts the lid on Melbourne's radical past - including the soapboxes that dotted the city in the 1890s. Economics: Back to the PackThe big story in this year�s State of the States League Table is the end of the long reign of New South Wales at the top of the heap. Satire: Man Reneges On Promise To Leave The Country If Howard Re-ElectedA Sydney man has decided he won�t leave Australia despite the re-election of the Howard Government. Review: When Hippes Meet Unionists A new book investigates how links between politics and culture reached a high point in the 1970s
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