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Philipines Investment A Big Risk For Telstra Say Experts

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Desperate to grow new markets Telstra is taking a big punt on the Philipines a move that some say has high risks for the Australian carrier.

Desperate to grow new markets Telstra is taking a big punt on the Philipines a move that some say has high risks.

After cutting a deal with food and beer giant San Miguel to build a new mobile network in the Philippines, Telstra is now facing the real risk that busgets could blow out buring through revenue generated from Australian mobile and broadband sales.

Telstra chief executive Andy Penn told investors in October it would spend up to $US1 billion ($1.4 billion) for a 40 per cent stake in the joint venture.

Fairfax Media recently reported that the relatively risky move would represent one of the biggest overseas investments ever made by Telstra and come at a critical time for the company, which must find new ways to grow profits amid rising competition from local rivals like TPG Telecom and Singtel-Optus.

Fairfax claim that a new report from independent analyst firm Creator Tech is warning the push into the Philippines could become an expensive mistake costing the joint venture up to $5 billion if construction is hit by cost overruns and delays.


Creator Tech is a boutique analyst company that has written reports for large global companies and organisations like the Communications Alliance. Its co-founder Steve Mackay said Hong Kong-based executive Ferdi Stolzenberg had commissioned the paper on behalf of some potential Telstra investors.

Mr Mackay said the high profit margins enjoyed by incumbent mobile providers Globe Telecom and PLDT meant it made sense for Telstra to be interested in the Philippines.

“The business case for 4G in the Philippines, where both of the incumbents are making profit margins that nobody else is making, is a no-brainer and I can absolutely see why they’d do it,” he said. “But what are the costs, what are the risks to the costs and why don’t Telstra seem to be disclosing any of those?”

Mr Mackay also called for more detail about how much the project would cost to build in the Philippines, where major projects often experience delays, and how much San Miguel would charge Telstra for using its vital spectrum resources.

One of the biggest advantages of Telstra working with San Miguel is the latter’s control over 700Mhz mobile spectrum, which is a hugely valuable resource that Mr Mackay believed was worth between $US930 million and $US2.78 billion.

“Telstra’s 40 per cent share of this equals $507 million to $1.52 billion,” the Creator Tech report said. “San Miguel may choose to gift the spectrum to the joint venture at below market value or ‘mate’s rates’ though, based on public statements, we see no commercial reason why they would do this.

Telstra has described the report as “speculative reporting” a phase that their PR people like to use when things are not going their way.


Also skeptical is Goldman Sachs analyst Raymond Tong who last week released an unrelated report into Telstra, which also warned of potential cash burn for the Philippines project.

He claims the project could cost both parties $US3.5 billion over a three to four year period.

Technology Nous Is Not A Pre Requisite To Being A Great Leader

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COMMENT: Today several smart arse political journalists including Kerry O’Brien on the ABC’s 7.30 Report are trying to make out that Tony Abbott is a technology nerd, despite the fact that O’Brien and a lot of other mass media journalists don’t have a clue about technology other than it’s something to do with an iPhone, iPod and searching the web.

Last night on the 7.30 Report Abbott stuck his hands up and honestly said:”Just as the Prime Minister says, I say as well, I’m no Bill Gates here and I don’t claim to be any kind of tech-head in all of this.”
The fact is that if you asked most CEO’s of companies, who have major technology infrastructure the chances are that they, like Abbott, will not have a clue about the technology detail in their operations and that includes the CEOs and Chairmen of most Australian banks.
 I am pretty certain that a lot of media CEOs and Chairmen, including Roger Corbett at Fairfax, would do exactly what Abbott did, be honest.
What Abbott should have done is stick his hands up and told O’Brien that in the Coalition there are several experts with intimate knowledge of technology including some with an excellent understanding of the issues associated with the role out of a broadband network. And that they have contributed in the development of the Coalition’s broadband plan.
Among the people on hand for Abbott is Malcolm Turnbull, who is a former director of OzEmail, one of the first ISPs in Australia. He was also Chairman and Managing Director of Goldman Sachs Australia between 1997 and 2001. During this period he made several successful technology investments.
Turnbull is also one of Australia’s richest politicians who in 1999, sold OzEmail to the then telecommunications giant MCI WorldCom. Turnbull’s take out of the deal was worth over A$70 million.
Since then he has made several  strategic investments in software and technology service companies. His wealth has been created making the right technology decisions, not the wrong ones.
Also in the opposition team is Paul Fletcher, who is a seasoned broadband communications expert.
He was the principal of a strategic consulting firm serving the communications sector and was previously Director, Corporate and Regulatory Affairs, at Optus for eight years.

 
 He also wrote a book on broadband and telecommunications called Wired Brown Land.
Fletcher also worked as Senior Advisor and Chief of Staff to the Minister for Communications, Information Technology and the Arts, Senator Richard Alston, during the Howard Government.
Adding to the team is current shadow Communications Minister, Tony Smith, who yesterday was supported by Andrew Robb, the shadow finance minister. 
What the Liberals are doing is minimising the financial risk while delivering a 100Mbps broadband service. 
The reality is that if the proposed Labour broadband plan goes pear shaped it will have a shocking impact on each and every Australian who will be denied access to infrastructure spanning health, transport and social services. No political leader is expected to be an expert on every issue impacting a Federal Government. This is the reason that we have Ministers and Departments that are supposedly staffed by experts. 
Abbott, Rudd and others before him, including Howard, are the men at the front end of a political party and should not be held liable for the minute detail of any portfolio, in particularly portfolios that are dependent on strategic technology. 
They are not the backroom decision makers whose recommendations we as Australians have to live with every day. 
These are the faceless people who seem to survive in the public service despite massive budget blow outs and failed projects like the recent Labour Government environmental batts programs.
Recently the Australian Tax Office scaled back its new $820 million computer system because of problems including a 20 per cent cost blow out.
If this happens with Labour’s proposed $43 billion dollar fibre broadband plan we are looking at an additional  $8 Billion dollars, which in reality is a lot of roads, schools and hospitals.  

David Thodey New Telstra CEO

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David Thodey the former boss of IBM and of late Telstra Wholesale is set get the top job at Telstra to replace Sol Trujillo who is due to depart on June 30. . The decision was made at a Telstra board meeting yesterday.

David Thodey the former boss of IBM and of late Telstra Wholesale is set get the top job at Telstra to replace Sol Trujillo who is due to depart on June 30. . The decision was made at a Telstra board meeting yesterday.

Thodey who lives in NSW appears to have topped a short list of four, including one unnamed British executive – and close rival John Stanhope, Telstra CFO and a 40-year veteran at Telstra.

It’s the second time Stanhope has been turned down for the top job: he was pipped by Trujillo in 2005 after the board showed Ziggy Switkowski the door. As late as Wednesday, some news sources were still tipping Stanhope to emerge as the board’s choice.

Others who missed out this time included Sensis (Yellow Pages) CEO Bruce Akhurst and consumer marketing group MD David Moffatt.

At 54, Thodey is four years younger than Stanhope. He has been MD of Telstra’s enterprise and government division, as well as heading up the Kaz services business, and is widely seen as seen favouring a more stable relationship with the government than Telstra pursued under the prickly Trujillo.

His major task – apart from attempting to repair the Telstra share price, which has slid 36 percent under Trujillo – will be to steer a voluntary separation deal ahead of the NBN rollout: something that Trujillo plainly could never have embraced. That course could also see the departure of Telstra chairman Donald McGauchie, who has been closely aligned with the Trujillo view.

 

Thodey joined the telco from IBM in 2001 as group MD of Telstra Mobile, and has also served as chairman of TelstraClear, the NZ subsidiary. In his enterprise and government role he has been drawing an annual paycheque of around $3.9 million – if the board reward him as they did Trujillo he can expect something more like $13-14 million.

Netgear moves into storage

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Netgear is set to move into the market with a raid configurable networkable system that sells for $229 RRP.

Due to go on sale in late July 2005 in Australia the system has two slots for IDE drives and is said to be ideal for both the home and the SMB market. Striping, mirroring and partitioning are all available options, and future updates will include more dedicated server-like features, such as the ability to stream content to your TV even when your PC is off.

In an interview at CeBit Australia, Netgear CTO Mark Merrill said that storage
had become a commodity sell and the new Netgear Storage Central

Netgear’s storage solution
system was
designed to allow resellers to either sell a stand alone system with two drives in the slot or allow consumers or small business to choose what size drives or how many system they want. “We have designed the system to allow users to configure them as raid drives as well as create multiple partitions. We will also include some software tools that allow users to manage the drives,” Merrill said. Netgear claim that the drives transfer at around 70Mb a second.

“For Netgear to configure drives in the slots is a risk as the price of storage is dropping by the day. What we’ve done is design a storage system that can be configured and managed in a variety of ways providing for mirroring, or the clustering of several Netgear Centrals into a network. In designing this we were able to get heat dispersement under control with power being supplied via a laptop type power supply unit,” he said. The system is connected to the network via an Ethernet cable. The early models will not have USB.

He added: “With the Netgear storage solution, we are confident that we can grab share in the bottom end of the SMB market and the home”
Ian McLean, managing director of Netgear Australia, said: “We are targeting the whitebox channel in Australia as they are in a position to immediately deliver for users the option of multiple drives and sizes. For the likes of Harvey Norman we will bundle a product with drives in a combination which could either be two 60GB drives or two 160GB drives”.

 

Optus Creates Sticky Problem For Federal Labor Over 4G Spectrum Sale

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Labor, Communications Minister Stephen Conroy who is struggling to commercialise the National Broadband Network is facing a new dilemma after a senior Optus executive said that his Company is considering a 4G network sharing arrangement with arch rival Vodafone as opposed to paying out millions to buy 4G spectrum.

Optus consumer boss Kevin Russell claims that he is considering building more base stations while also expanding site-sharing arrangements with Vodafone, a move that could instantly devalue the worth of spectrum the federal Labor Government is trying to lease to carriers.

Speaking to the Financial Review, Russel claims that the government’s pricing is effectively double international benchmarks, and that Australian consumers will end up paying extremely high prices for their 4G mobile services as opposed to what consumers pay in markets like the UK and USA.

Late last year Conroy and the Labor Government, who are struggling to generate revenue from their recent mining tax initiatives, set a higher than expected $3 billion floor price on key licences for 4G spectrum a move that has labelled “ridiculous” by several telecommunication analysts. The Labor Government was banking on the increased revenue from the spectrum which will become available when analogue television is switched off in Australia.

Russell said that while the carrier would remain in the formal process and will lodge an application by the Thursday deadline, his Company did not need the spectrum to deliver a quality mobile network in the future. “There are always alternative strategies to spectrum – spectrum’s not the only thing,” he told the Fin Review.

“Our views are pretty public about the pricing: it’s high by any measure. And unquestionably, it’s meant we’ve reviewed and we will continue to review our options,” Mr Russell said.

“To cut to the chase, we have looked a lot harder at what is the best economic way to build a great network, a great customer experience – and we’ve got options,” he said. “You have to compare the economics of building sites with the economics of buying spectrum. The benefit of low frequency spectrum is better in-building coverage, but you can also meet that benefit with rolling out sites.”

Big Vendors Oppose JB Hi Fi Takeover Of The Good Guys

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Several vendors are believed to have approached the Australian Competition and Consumer Commission seeking reassurance that their submissions to an inquiry into the potential merger of JB Hi Fi and The Good Guys will remain confidential.

ChannelNews has been told that several vendors in the consumer electronics market are concerned that a consumer electronics monopoly could be formed following the demise of Dick Smith. Some of these CE Vendors also sell appliances. 

This is despite the fact that several retailers including Aldi Big W, David Jones, Betta Electrical, Leading Edge, Officeworks, Myer, Kogan as well as more than 20 online resellers currently sell consumer electronics products in competition to JB Hi Fi and The Good Guys.

The ACCC told ChannelNews that closing date for submissions is Thursday 30 June 2016 and that a ruling or indication, will be made on August 4th.

Submissions should be forwarded electronically (preferably in PDF format) to mergers@accc.gov.au with the title: Submission re: JB Hi-Fi – The Good Guys – attention Karina Geddes/Madeleine Houghton.

According to one source a meeting took place between vendors who were attending a recent Harvey Norman function.

The primary discussion was JB Hi Fi and the potential that JB Hi Fi could demand better trading terms from vendors.

During the discussion concerns were raised as to whether any submissions made to an ACCC inquiry into the potential merger would remain confidential.

One attendee told ChannelNews that vendors are concerned that if the two companies merge pressure could be put on vendors over pricing especially vendors who currently only deal with Harvey Norman, The Good Guys and JB Hi Fi.

Currently The Good Guys have a small share of the overall consumer electronics market with the exception of TV’s, they do have a larger share of the large appliance market.

JB Hi Fi has only has around 3% of the appliance market.

Several of the vendors at the Harvey Norman event have admitted to ChannelNews that in the appliance market that JB Hi Fi does not currently get the same discounts or rebates as a Harvey Norman or The Good Guys due to the fact that the mass retailers only have only a small share of the appliance market and that the mass retailer is primarily in the small appliance market where Dick Smith were trying to compete before they were placed into liquidation with debts of over $400M. 

One attendee at the Harvey Norman event said “The fear among some vendors is that they will be identified as having complained. Some of these vendors are looking at the cost of doing business in a market where several of these vendors only deal with Harvey Norman, The Good Guys and JB Hi Fi directly”.

They added “The rest of their business in particular with other smaller retailers is quite often via distributors”.

JB Hi Fi has not commented for this story.

ChannelNews understands that the mass retailer is still doing due diligence on a proposed takeover of The Good Guys.

A spokesperson for the ACCC said “Submissions do remain confidential”.

ChannelNews understands that a submission can be made for documents, under Freedom of Information laws, however the ACCC can still claim certain documentation as “commercially in confidence”.

Apple To Release Three New iPads

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Speculation is mounting that Apple will next week release three new tablets with a new edge to edge display and no home button.

The new 10.5-inch and 12.9-inch iPad Pro models are tipped to hit stores immediatly, hopever one insider has told ChannelNews that the roll out could be delayed untill April.

ChannelNews also understands that Apple will not hold a launch event for these products.In 2012, Apple introduced new iPad models at the Yerba Buena Center for the Arts in the USA.

Among the the sizes set to go on sale, a 9.7-, 10.5- and 12.9- inch model.

All three of the new iPad Pro models are expected to be equipped with quad microphones.

The good news for some is that these tablets, will retain the 3.5mm headphone jack unlike the iPhone 7 and 7 Plus iPhones.

The existing 12.9-inch iPad Pro will also be getting the True Tone display, which is currently limited to the current 9.7-inch model.

The upgrade will be the first major overhaul of Apple’s iPad Pro line in 18 months.

MacRumours said ‘Apple is expected to announce new products later this month, most likely between Monday, March 20 and Friday, March 24, according to reputable supply chain analysts.

The latest rumours on the new iPads come from an unnamed source in the supply chain speaking to DigiTimes.

They said they were ‘certain’ that the release of the large-size tablets ‘would not come until May of June’.
Mac Otakara said the 10.5-inch-will have the same overall footprint as the current 9.7-inch iPad Pro thanks to its edge-to-edge design.
The earlier report claimed the top bezel will remain in order to provide space for the front-facing FaceTime camera, but it will likely be slimmer.
In October, reports suggested that Apple would be launching its three new iPad devices in March 2017.
Apple first unveiled the 12.9-inch iPad Pro in September 2015, making it the firm’s biggest tablet to date.
The Apple Pencil digital stylus was also introduced at the same time, enabling people to draw on the tablet more easily.
Apple has refused to comment on the release.

EXCLUSIVE:Massive Reckon Cloud Failure Leaves Customers Seething Accounting Records Missing

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Accounting software Company Reckon has had a serious cloud services meltdown with Australian customers left without access to their accounts. Several have been told that Reckon is struggling to access backups of their data.

Customers of Reckon who today announced a 3% increase in

revenues are claiming that a recent upgrade of the Company’s hosted software

platform has resulted in a “major” loss of data.

Phil Kent the CEO of RM Audio Australia claims that he has

spent up to 8 hours on support calls with Reckon after his entire Company’s financial records have “disappeared”.

He claims that Reckon technical support staff told him that

they had the data “but didn’t know which server the data was stored

on” he said.

“The upgrade of the Reckon Business Group platform took

place over the past weekend since the upgrade took place I have been unable to

get access to any of my financial records” he said.

“I have spent hours with their technical support staff

and it appears that they do not know where the backed up data has been

stored”.

The company who has not responded to our calls for further

information does have a technical support message that claims that the Company

is currently experiencing “difficulties” and that technical support

staff are currently addressing the issues.

Another Reckon customer who contacted ChannelNews said

“This is a disaster Reckon have lost my records and their support

operation does not have any answers”.

On social networks Reckon customers vented their anger.

Gary Eckstein @ecksteing

ReckonHQ what’s going on? We pay for your service yet your well-publicised

upgrade doesn’t work #AccountsHosted #Reckon #fail

Katherine Smith @manlywoman Reckon is experiencing what could be called a #fail users

very disgruntled. New system no service. No communication. No customers.


Frank M @frankmathisen @ReckonHQ we’re having issues login on today, and have been

on hold for support for 1 hour!! What’s happening? #AccountsHosted #Reckon


Gary Eckstein @ecksteing@ReckonHQ what’s going on? We pay for your service yet your well-publicised

upgrade doesn’t work #AccountsHosted #Reckon #fail


Earlier today the share listed Company posted revenues of $51.1m

for the half-year ending 30 June 2014, and an 11% increase in EBITDA from

trading for the same period. 


In his financial press statement Reckon CEO Clive Rabie said

that In February Reckon officially ended its relationship with U.S. software

provider Intuit and that they launched their new cloud accounting solution,

Reckon One. Rabie claimed that his Company had made a significant investment in

building the online capability of the business.

Shortly after his financial results were announced customer

anger was vented on social network sites with several Reckon customers calling for

answers.

Rabie later issued a statement on his own web site saying

“Over the weekend we rolled out a new version of Reckon Accounts Hosted

service. We had expected through careful planning that the transition to the

updated service would have little impact on customers. However, over the last

two days through community posts and calls through our contact centre I am

aware that many of you have experienced issues with the service”.

“I want to personally apologise for any difficulties

you may have had accessing and/or using the service since the change, and any

problems you may have had contacting our support team”.

He added “Whilst many users have been able to gain

access to the program, there are a number of users being impacted by a specific

system issue that results in their program failing to connect. In some

instances users can connect by trying again, but not always. We are looking at

this as a matter of priority by putting everything behind getting the system

working as it should as soon as possible”.

HP Claims That Smart Watches Have Major Flaws, Fail To Nominate Which Brand Is Exposed

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HP the Company that acquired the Palm OS operating system and then screwed up the launch of the Palm smartphone running on the now LG owned Web OS, is now claiming that smart watches have significant security flaws.

HP who has not launched a smart watch in Australia and are struggling to market their own brand of smart watch claim that they discovered the flaws after testing 10 devices, they have not nominated whose brand of smartphone they were testing or whether they tested multiple brands.

What is also not known is whether they were testing their own brand of smart watch. 

Late last year, HP announced a collaboration with fashion designer Michael Bastian for a new smart watch that they said would appeal to more than just nerds. The watch doesn’t have a touchscreen and instead relies on a black and white LCD for notifications. It doesn’t track your step count or have a microphone for voice commands. 


Click to enlarge



All of them “contain significant vulnerabilities, including insufficient authentication, lack of encryption and privacy concerns,” the company’s HP Fortify security group said.

 
The security issues could enable hackers to get unauthorized access to a smart watch’s stored health data and deliver unauthorized access to connected homes and cars, HP warned.

 
“Smart watches have only just started to become a part of our lives, but they deliver a new level of functionality that could potentially open the door to new threats to sensitive information and activities,” said Jason Schmitt, general manager of HP Fortify.


“As the adoption of smart watches accelerates, the platform will become vastly more attractive to those who would abuse that access, making it critical that we take precautions when transmitting personal data or connecting smart watches into corporate networks.” HP recommends that users not enable a smart watch’s car- and home-control functions unless strong authorization is offered.


“In addition, enabling passcode functionality, ensuring strong passwords and instituting two-factor authentication will help prevent unauthorized access to data,” HP said. HP’s full report outlines guidelines for secure smart-watch use. The most common – and easily addressable – security issues, HP said, include: Insufficient User Authentication/Authorization: Every tested smart watch was paired with a phone interface that lacked two-factor authentication and the ability to lock out accounts after three to five failed password attempts.


Three of the 10 were vulnerable to “account harvesting,” meaning an attacker could access the device and its data via a combination of weak password policy, lack of account lockout, and user enumeration.

 
The latter vulnerability enables hackers to identify user accounts through feedback received from reset password mechanisms. Lack of transport encryption: All of the tested products implemented transport encryption using SSL/TLS, but 40 percent of the cloud connections were vulnerable to the Poodle attack, allowed the use of weak cyphers, or still used SSL v2. Insecure interfaces: Thirty percent of the tested smart watches used Cloud-based web interfaces, all of which exhibited “account-enumeration concerns.

 
” In a separate test, 30 percent also exhibited account enumeration concerns with their mobile applications. Insecure software/firmware: A full 70 percent of the smart watches presented concerns with their protection of firmware updates, including transmitting firmware updates without encryption and without encrypting the update files.

 
Although many updates were designed to prevent the installation of contaminated firmware, the lack of encryption allows the files to be downloaded and analysed. Privacy concerns: All smart watches collected some form of personal information, such as name, address, date of birth, weight, gender, heart rate and other health information. “Given the account enumeration issues and use of weak passwords on some products, exposure of this personal information is a concern,” HP said.

EXCLUSIVE: Lidl Still Keen To Take On Aldi, Master Stores On Radar

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Giant European retailer Lidl has not written off taking on Aldi in the Australian market according to sources.

The group who has been talking to commercial real estate Companies and distributors in Australia with the Company now believed to be looking at several Masters locations where Woolworths is set to relinquish a lease. 

ChannelNews has been told that Aldi is also interested in several Masters locations in an effort to expand their presence in Australia.  

Both Aldi and Lidl sell house brand appliances and consumer electronic goods with both Companies now holding more than 11% of the European appliance market.  

Recently Lidl ratcheted up its UK expansion plan by issuing almost three times as many planning applications as Aldi.

In November, Lidl said it would invest $3 Billion dollars over the next three years to ramp up its store expansion globally. 

Sources have said that the Company’s is planning on launching upmarket outlets that included self-checkouts and customer toilets, which had previously been missing from its budget superstores.

Currently the German retail group is expanding their operations into the US market. In the UK Lidl has more than 630 stores in England, Scotland and Wales, and a goal to double in size and operate 1,500 stores across the UK.

Insiders are claiming that the group will not open any stores in Australia until 2018/19 which will be after the rollout of their US stores.

“What could make a difference in when they launch in Australia is whether they can secure some of the Masters locations with the Company looking at a series of Mega stores which the Masters stores would deliver said a retail source.