John Linton
While I was away from Australia in late October I gave a lot of thought to Exetel's immediate and short term future activities and what could be done to ensure that all of the incredibly hard work and spine tingling dangers we had faced and overcome over the past, almost, five years would not be wasted but would in fact become the platform for realizing at least some of the aims we had when we started the company in January 2004. How sad that even someone who been burned so many times still continues to allow hope to triumph over experience.
I think I expressed one of the conclusions I came to as not doing business with suppliers who regarded us as either "a parasite" or a source of sales leads for their retail operations.
That isn't the easiest thing to accomplish given the current state of the Australian communications industry but, irrespective of how hard something might be, if you analyse a situation correctly and reach inescapable conclusions then you have to be really stupid not to understand that you have to do something about the conclusions you have reached. I don't think I'm really stupid (though I may be wrong in that belief) so it becomes inevitable that Exetel has to take different directions to the ones we have followed for the past almost five years if we are to actually get anywhere in the coming years.
The first minor step has been taken in that we have stopped selling new 256/64 ADSL1 connections and have replaced that offering with a recommendation for a prospective customer to use an HSPA service (at sub 2 gb of downloads its cheaper, faster and doesn't require a telephone line so it was a pretty easy decision).
Yesterday we started removing the 8192/384 ADSL1 offerings for new users by reducing the number of plans from five to three. Our rationale for doing this is that we buy 8192/384 ADSL1 ports from Telstra Wholesale at a price that is more than two and a half times what we pay for an ADSL2 port from Optus and we find that our 8192/384 customers are prime targets for BigPond (and others) to approach with either a 8192/384 or ADSL2 service at half the price we buy the wholesale service for.
I, personally, have no problem with any company using whatever methods it deems appropriate and 'legal' to attempt to sell its services - that is simple commercial reality. In this particular case it's obvious that Exetel can't offer a better or lower cost service than Telstra so its against the primary objective of the company for us to do so - (Exetels whole raison d'etre is to offer services that are lower cost than any other realistic provider at an equivalent or better quality than the best provider in the Australian market).
We will remove the remainder of the 8193/384 plans at some later stage but will continue to provide all of the current 8192/384 plans to our current customers for as long as they wish to use them.
As HSPA continues to develop, and can reliably sustain higher speeds, we will put in place plans that will offer lower download users on our 512 and then 1500 ADSL1 plans to be given a 'compelling' choice to move away from a wire line broadband service to an HSPA or LTE service when/if that becomes available. We would expect, especially if we do face tougher financial times in Australia in 2009, that the 'promotions' run by large communications companies will intensify and offer even lower pricing to customers than was the case in 2007 and again in 2008. Our challenge is to develop a better alternative to 'cut price' ADSL services to ensure we can offer our current ADSL1 customers a more than attractive alternative to the targeted discounting programs of large competitors.
We will also 'fight a comprehensive rear guard action' by completely changing the basis on which we offer wire line based broadband services to directly address the vulnerabilities we see in the larger competitors user bases. From sometime next week we will introduce ADSL1 and ADSL2 plans based on a hybrid PAYU service of a monthly access charge and a low cost, pre paid, download charge.
These plans will be along the lines of a monthly access charge of:
512/128 - $35.00 per month (phone line rental with customer's choice)
1500/256 - $42.50 per month (phone line rental with customer's choice)
18000/900 - $25.00 per month (plus $25.00 for phone line rental with Exetel/Optus)
with the ability for the customer to pre-pay for 5 gb or 10 gb of downloads and top up when they run low). We haven't finalised the price of the download blocks but are thinking in terms of $1.00 for 12 noon to 12 midnight and $0.25 for 12 midnight to 12 noon - our indecision is based on the $A likely exchange rate over the next year and these initially planned charges may well have to be higher.
We will leave our current ADSL1 and ADSL2 plans in place for the time being while we try to get this concept exactly right.
Our objective is, in the future, only to buy 'base building block' communications services where there is a choice of supplier so that we don't make the same mistakes in the coming years we made in the first five.
Not an easy thing to do - but essential - and therefore we have to do it even it means having to 'throw away' five years of extreme effort and start again.