One
wonders why the ANALysts failed to see or plum forgot to mention the real value
of Ziggy’s folly at T2.

Consider
you had a monopoly supplying horseshoes made out of copper slag. Now let’s say someone called Marty develops a
new technology called autoMOBILES that unbelievably eliminates the need for
copper slag for everything but sending packets far and wide.

King Paul, bless his heart, ordained that
the technology would be taken to the townsfolk not only by our arrogant old
blacksmith, but by some wily young competition.
Well, the Blacksmith assumed the townsfolk would remain forever grateful
for the veritable screwing they had been getting whenever the copper was
attached. After all Blacky bellowed, we
may have screwed the copper into you but it was in your interest, and don’t
forget we’re Australian. Wily, led by
Dr Zigmeister, was by royal decree, going to do Blacky slowly regardless,
predominately due to the lack of real competition.

T1
shareholders got lucky and while the pointy end was frankly blunt,
Blacky’s
owners ensured their cash cow was the wholesaler in the ‘amp’ing up of
this
exciting new product. Blacky however had
been treating the townsfolk like mules for too damn long and the forge
had
begun to lose its shine. Oh, Blacky was
making buckets of money, but only by selling his outdated copper slag
at
inflated prices. After all, he was still the only one who had the slag
and no-one had worked out how to send packets faster than 9600 without
the damn
copper. But why would you want to send a
packet faster than 2400 anyway said Blacky!

By the
time T2 came along the writing was on the wall, it just seems none of
those
ANAL folk bothered to look, or maybe they were still revelling in the
gluttony
of T1. The trend worldwide was to go
with the autoMOBILEs. Hell every town
the wise old Gent strode into, he offloaded the
copper heavy Blacky to whoever wanted him. Now with the Zigmeister
having defected from Wily to the pointy end of
Blacky, he called for a hatchet job on the staff, a sell off of the
cutlery and
to accelerate the depreciation of the slag heaps. Trouble is, the wise
folk had
already dumped their shares before T2 which left poor old mum and dad
to try to
comprehend why their shares have plummeted, let alone try to comprehend
what effect accelerated depreciation would have on their dividends.

For a
while there, T3 was being pushed by SeniAL and his mates who were well aware
that G3 was looming and threatening to move them packets quicker than a late
payment charge from Ziggy could lob on your account. Sadly, G3, like Motorola GSM, didn’t live up
to its initial promise, the slagheap remains useful for now and T3 goes on the
back burner. As expected, sly old Ziggy,
immediately increased the cost of accessing the copper slag thus offsetting
some of the write downs, he then backdoors charges for the townsfolk to call
the monopoly and no-one seems to have realised.

Then Ziggy sold off the stained pages directory so they too could charge
silly money for something we all thought was part of the service. And to top it off, Ziggy once again upped the
cost of accessing the slag heap.
Blacky’s continued disdain for customers however causes him to lose more
market share in AutoMOBILES. The only
hope mum and dad have that the shares in the Forge will head north is if Ziggy
uses more of the money ripped out of our pockets to buy back the bellows!

What
therefore would T3 be worth? Given that
investment is for the future, we must accept that if G3 doesn’t get up, G4 will
and the copper heap will ultimately be worth nothing!

Thus, the wise man could take Ziggy’s total revenues for the
monopolised terrestrial products and, as competition did with
autoMOBILEs, deduct his rapacious access charges because the monopoly
is the only place they exist (a). Now if we were to be generous we
could assume that with real choice, the townsfolk would allow Ziggy to
retain the 42% market share, that he currently has in Mobiles, across
all products thus take 42% of (a) add in the current revenues from
mobiles and we have an indication of how much Blacky would be earning
post G3/G4. That leaves us to consider how Ziggy will deal with
expenditure cuts, the power of the CPSU and the aforementioned
depreciation of the slagheap to ensure he remains solvent. The
bottom line is sure going to be interesting, and times earnings ratios
are all about investor confidence. I wonder how many of Ziggy’s
remaining staff will take advantage of their generous staff loan this
time in order to prop up the offer.