Matt Connolly's Blog

my brain dumps here…

Tag Archives: business

iPhone tethering: My fridge, my beer.

Up until now, when you bought a fridge, you could put anything you like in it. And when you bought beer and put it in your fridge, you could do whatever you like with the beer.

Now there’s this new fridge out that’s got a special deal with all the breweries  (like the deal between Apple and Optus) where you have to pay an extra fee if you give the cold beer to a friend.

What’s that? I bought the fridge. I bought the beer. I can put the beer in the fridge and drink it. But I have to pay an extra fee to pass the beer onto my friend? Just because it’s a new fridge? RUBBISH!

And so, Apple’s tethering deal with Optus is clearly a money grab for the convenience of something we’ve always been able to do with other phones. (At least every Nokia phone I’ve ever had with bluetooth could tether data from any access point).

Does anyone know if there’s a petition against this?

What about some regulation that this practice is unfair for consumers? ACCC? TIO? Anyone?

Internode Easy Broadband Internet Plan

Internode have just released a new internet plan: “Internode Easy Broadband“. The plan is the first plan that counts data as downloads and uploads.

Simon Hackett, Managing Director of Internode, writes on the whirlpool forum that it’s all about effective comparisons with other major ISPs such as Telstra and Optus.

There’s a fair bit of noise on the forum about this, but I think it’s a good idea. As internet applications and highly efficient transport of data via peer-to-peer systems become more commonplace, the amount of uploads will increase dramatically in the future. It’s only fair that Internode be compared on even footing with the other big ISPs – and at what seems like much better value too.

Of course, if you don’t like it, no one is making you do it. That’s a fresh perspective compared to other ISPs, notable TPG, who change plans and terms on their customers without choice.

So, my opinion is: another win for Internode! Good work, Simon Hackett.

Why invest in Banks?

Some time ago, I had an interesting thought about the value of banks – and whether or not we should invest in them.

Banks loan money to people. They provide all sorts of credit: home loans, personal loans, credit cards, etc.

Many banks are listed on the stock exchange – so what are their shares really worth?

Two ways of valuing a business are their assets and their income:

ASSET: A bank’s asset is the money they lend you. On your balance sheet, it’s a liability, on the bank’s balance sheet, it’s an asset. Paying off debt reduces a bank’s assets.

INCOME: A bank’s income is the interest they charge you on credit. On your profit and loss statement, interest charged from a loan is an expense; on their profit and loss statement, it’s income. Paying off debt reduces a bank’s income.

It seems that one of the major factors in the world’s current financial crisis is bad debt.

Let’s consider the possibility of people paying off their debts. Firstly, why would people want to pay off debt?

  • So you can eventually own your own home.
  • To reduce interest payments every month and free up cash flow
  • Gain financial independence
  • Prepare for retirement
  • Be a conservative investor without the risk of suffering from margin calls
  • and, I’m sure there are plenty of other good reasons, too…

Secondly, what would happen if people actually paid off their debts?

You would reasonably expect the banks to lose share value since the act of reducing debt reduces both asset and income for the bank.

So when you invest in bank shares, what are you really investing in? DEBT. Yet people believe that bank shares are a safe investment – safer than biotech, IT, mining or many other industries….

I hope this triggers some thoughtful comments and discussion….