Monday, October 27. 2008Tough Decisions/Times Before ChristmasJohn Linton It's good to be back in Australia even though I really enjoyed my week in Sri Lanka. It's always good to have a break, even a business dominated break, away from the proximity of daily business life and it does provide new perspective(s) on occasions as it did this time. I am more convinced than before I went to Sri Lanka that Exetel needs to adopt a very conservative approach to almost all aspects of business in Australia over the remainder of calendar 2008 and we should take the opportunity of 'tidying' up some of the loose ends before commencing 2009. We will need some time to consolidate the good start we have made in Colombo and we will move more functionality to Sri Lanka rather than expanding personnel in Australia as a matter of policy both to reduce our overall operating costs and to take advantage of those cost reductions to speed the development of new processes and systems and to complete the move to 24 x 7 x 365 operation. I may be being over optimistic in thinking this can be done faster than originally planned but the financial conditions I expect to see in Australia is adding impetus to that schedule. We will phase out the Unwired service by June 30th 2009 by offering our remaining Unwired users the opportunity for an attractive move to a revised HSPA offerings early in the new calendar year for those who haven't taken up the current offer or the offers about to be made between now and Christmas. I'm disappointed that, for whatever reasons, Unwired never seemed to deliver on its early promise of being a true broadband competitor but we have passed our fourth 'anniversary' of being an Unwired wholesale customer and it's clearly long past time when there is any reason to believe that Unwired has any incentive to try and make a wholesale model work - so time to go. Similarly we will do our best to persuade our customers on the AAPT/Powertel ADSL2 service to move to the Optus ADS2 service (where it's available) via the painless HSPA interim service 'churn' process. This eliminates some infrastructure as well as finally resolving the problems of unworkably long and untidy fault resolution by AAPT. I think I'm even more disappointed with this 'turn of events' as our business and working relationships with Powertel were always very strong and, at least I thought, mutually beneficial. All that ended abruptly when AAPT took over Powertel and the subsequent problems we had in provisioning (often weeks and sometimes months of difficulties) and then fault resolution (effectively a completely manual system on their end and people who couldn't/wouldn't make it work). So, sadly - time to move on. Resolving the ongoing difficulties we have experienced dealing with Telstra Wholesale will take more time than we can really afford and we have not yet developed a clear 'path' down which we can go to resolve all of the problems that make most days so unpleasant and wasteful in providing ADSL1 services. There is one way of solving all of the current problems with Telstra quickly and cleanly which we have discussed a few times recently and it has many merits. It is favoured by at least one Exetel director and not opposed in principle by the other two. We will give it more consideration and make a decision before the end of 2008. As with Unwired and Powertel times (and in Telstra's case - top management) change and what was workable in the past becomes unworkable over time and - again - you just have to move on. In the mean time we need to try and minimize the impact of the various aspects of the 'global financial crisis' on our day to day business plans between now and mid December and we need to get the HSPA service firmly 'launched' in the run up to what is promising to be not such a happy Christmas in Australia this year. In terms of being the lowest priced provider in the marketplaces in which we operate we have the 'inbuilt protection' of being a refuge from higher priced ISPs. However I think if the largest ISPs see their numbers dwindle they will be very aggressive in their 'marketing programs' and I'm hoping the net result of refuge/target will be neutral. I keep looking for signs within our own business of a 'softening' in demand but up to now there have been none. We had a very strong first quarter and October is, if anything, even stronger in terms of applications for each one of the service types that Exetel provides. However, things can change very quickly and I am not counting on the first four months of this financial year as any sort of indication that Exetel will be untroubled by the current and likely future finacial circumstances in Australia. I received two 'interesting offers' over the weekend and earlier this morning which seemed to underline that life in the communications business may be even tougher than I think it is for Exetel. In essence both approaches were not to 'sell' the two respective businesses to Exetel but to provide their user bases on a '12 month license' whereby Exetel took over the supply of services to their customers (at our supposed lower costs) on the basis of providing a monthly 'profit share' each month for 12 months and subsequent lower 'profit share' from the 13th month onwards for as long as the customer stayed with Exetel. Interesting approach - but no thanks. So - time to begin the actions that take us to the end of the year. Trackbacks
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"There is one way of solving all of the current problems with Telstra quickly and cleanly."
Is this likely to be a cancellation of offering ADSL1, or some sort of restructure (please ignore my IP as I'm an Exetel agent who is unfortunately too far from my local ezchange to be able to get ADSL at this location - I'm stuck on cable). Just trying to plan marketing for the next couple of months and don't want to market something which is likely to change significantly (or disappear!) in the short term. Cheers Comment (1)
I can't say anything more than I have other than Exetel has to find a sensible commercial way of dealing with Telstra Wholesale as the current situation is not viable.
Comments (7)
JL wrote...
Resolving the ongoing difficulties we have experienced dealing with Telstra Wholesale... Back in march ForumAdmin said the plan was... Actually, as we are implementing a program to double our current ADSL1 customer base, especially in the ACT and NT and SA, WA and TAS the referral bonus has been made more attractive: $60.00 for a new ADSL1 customer $30.00 for a churn ADSL1 customer From the forum here... http://forum.exetel.com.au/viewtopic.php?f=306&t=26296&p=212945 Some insight into such a major change of direction would be interesting. Regards C Bumkin Comment (1)
The dramatic increase in difficulties in dealing with Telstra Wholesale and Telstra's retail ongoing actions.
Comments (7)
What has Telstra been doing, other than calling customers to get them to swap? Have they made the application process more complex or something? I understand if you can't answer, but just curious as to how these difficulties manifest themselves.
If you do stop selling ADSL1 then I'm partly out of a job as an agent - but then nothing lasts for ever. (Heh my dialup business might have made $2,000 profit for the last year for example.) On the other hand, the HSPA sales are fun and refreshing! Comment (1)
HSPA is a good way to go for many reasons and hopefully we will be able to make HSPA offerings both more attractive and generating more revenue from hone calls and other services over the next two months.
Like your business, our business would be seriously disadvantages without an ADSL1 product or some equivalent so we are in no rush to cut our company in half (in terms of revenue) by dropping ADSL1. We just have to find a supplier who we will find easier to deal with. Comments (7)
You talk about turning away other isps who want to do some kind of "profit sharing" but at the end of the day what is the real difference between doing that and offering them either Visp solution if they are willing to support their own customers or setting them up as an agent and migrating their customers across?
Comment (1)
Your HSPA service is hamstrung, in my opinion, by the cost increase on the second GB.
The monthly charge is quite reasonable as is the no contract. Make it a low flat fee per MB and you may have something compelling. Comment (1)
It's what it costs that determines the price.
We could be 'dishonest' and offer much larger downloads at, say, $40.00 and then cripple the system so it couldn't actually deliver that. However I wouldn't want to be part of a company that did that. Comments (7)
Looks like I should have encouraged my brother to hold onto his Exetel/Unwired connection just a bit longer to see what was on offer in terms of HSPA
(he cancelled on Oct 31st without seeing this blog or receiving any offers) Now we've just got an nice "Unwired" modem sitting on the shelf (which Unwired don't want anything to do with) Comment (1)
I don't see us making an offer to Unwired customers who download more than 2 gb until early 2009.
Comments (7)
Your current HSDPA service used as an ADSL backup.
Since it's release my company have been installing Draytek Vigor 2820's in small to medium business. This has mainly been due to their VPN and network features, but they also have the feature of a HSDPA (via a USB port) fall back system for when your ADSL connection drops out. Thus far we haven't used this feature, but I can see a number of companies being interested in adding automatic HSDPA fall back to their networks in the future. Thought this might be another interesting use of your HSDPA plans to promote. Comment (1)
We thought that our plans perfectly addressed this scenario.
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