Sunday, November 16. 2008I Wonder How Truthfulness In Broadband Will Go Over?John Linton We've struggled for almost five years at Exetel, and for some years before that with other ISPs to attempt to provide the lowest cost broadband services in Australia without going broke - not the easiest task to take on and deliver but it was the base premise for setting up Exetel in the beginning and remains the base premise today after five very tough years. Over that time it has been interesting to observe how the 'ISP Scenarios' have changed and I wonder what changes now have to happen for the various ISPs to 'survive' in the post high growth phase of road band take up that is beginning to make its presence felt - at least for some ISPs - at least thats the way it appears to me. Why do I say that? The main reason is that the dial up user 'population' has almost disappeared in terms of people still using dial up as their primary/only means of connecting to the internet and all the marketing cr** about "5 million times as fast" and "blazing speed" has, or should have, disappeared with that demise. So as there is also no longer an actual major market to aim at that doesn't already have ADSL the concepts of "free" modems" and "free" activations went along, should have gone along, with that demise. The major marketplace for ADSL now is - other ISP's ADSL customers which, for two years by my observation, have been a primary target for Telstra using their ready to hand customer listings of other ISPs users which, depending on who you believe come from various legal sources or if you aren't that persuadable some cynics may believe they come from other sources - in the end it makes no difference - a list sourced from somewhere is used to contact people who use other ISP services to transfer to Telstra's direct ISP service. Similarly, albeit completely differently (taking my lead form Dudd's latest idiocy this morning where he described one of his/the G20s "momentous decisions" as being "contentious but likely to be popular" - and there was me thinking that "contentious" was virtually an antonym for "popular") you have the other larger ISPs trying to use some 'unique' aspects of their DIFFERENT ADSL implementations to attract other ISP's users. Exetel has none of the advantages enjoyed by the large companies we try to compete with so our 'arsenal' is fairly empty and our 'financial resources' cry out for a more accurate description than 'strictly limited'. So we are left with, virtually, nothing to 'go to market with' unless we were stupid enough to try using that discredited, and therefore not used in recent commercial history, concept - the truth? I wonder how that would work? Well, as it hasn't been seen in commercial use in the communications industry for almost as long as I have been associated with comunications it might be worth a try - if only for the novelty value? I realise that I'm sounding not only sanctimonious but boring so I'll move on to why we are about to try an honest and accurate version of offering broadband services based on making it both clear as to what the user will actually pay and, heres the possible difference, no 'lures' based on other factors that won't really have any bearing on overall and realistic use. We have started this process with the HSPA services which are based on a small (close to our cost) monthly access fee plus a cost per megabyte of traffic used. No usage - no payment - is the "difference" we offer. We will continue this process with ADSL1 and then ADSL2 plans offered on the same basis - monthly access costs to the end user based on our costs with virtually no margin plus usage based on traffic at a very low per megabyte charge. Not much difference to the older BigPond et alia plans you woud be correct in saying? Quite right. These plans are quite similar in basic concept (most people can remember that such plans were offered with a paltry ("including a massive download allowance" of 100 mbytes or whatever it was) basis with additional magabytes being offered at 15 cents or some ludicrously high/unbelievable rip off price that was specifically designed to financially devestate the unwary....and, of course, you see the same companies transferring this financial rip off concept to their HSPA offerings today on the old PTB basis of "never giving a sucker an even break". We will introduce next week 'truthful' plans that are offered on the basis of monthly access charges at pretty much our buy prices and data downloads that are at prices that are a fraction of the cost of what are offered by any other ISP in Australia and we will rely on our true lowest operational costs, by a huge margin, compared to any other ISP to be able to deliver these services to 'low end' broadband users. I have no idea how this 'initiative will go but we only have the advantages of our low operating costs (the result of five years of pain creating that situation) to 'play with' against the considerably lower buy pricing available to our larger competitors and their large advertising expenditures and of course - their obfuscatory "marketing". It's a question of making a virtue out of necessity but it's also a question of whether a virtue is an advantage even in 2008 and 2009? Trackbacks
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John,
I can firstly say that that I have always supported Exetel, you are the innovators. but You have gone into the most negative mode I have seen you in. The new new ADSL1 plans --- and I'm looking for the right words here --- suck. They are so much out of line with what Exetel has done in the past, Im almost speechless. These plans are not aimed at attracting new customers, you must have drawn a line in the sand and said if people want to come to Exetel thats what they will pay. This is very out of character with the past 5 years , you have always made one of your primary objectives to increase your user base. These plans may, but to a very minimal degree. Your starting to give the impression of -- Ive had enough of this price cutting war and im going to start sureing up our foundations so in the not to distant future I can hand off this company to the heir apparrent. I quickly checked the offerings of other ISPs, and TPG are picking up your old position in the market. If I would advise prospective customers to go with TPG instead of Exetel -- what has happened. You seem to have wearied from the fight. Personally I think you have gone into some type of protective mode. I know the harping from the troll element is almost overwhelming but this new road you have setoff down, is this of your own choice or are you trying to appeise the trolls. For the first time , I see the man of steel - yes you John - may be worrying about the future, and adjusting your crash through ---- or crash persona. Is the economy really as bad as what you have setup exetel for. Do you still want to fight the good fight or has age wearied you. Comments (2)
Bill, you have to be kidding.
The PAYU plans are at our COST pls a few cents!!! What on Earth do you expect us to sell for - Cost MINUS 50%????? For Goodness sake!!! Comments (3)
Nearly 30 years ago I was a project manager spending over $500 million to build a new coal project in central Qld.
My company sent me to a "purchasing course" where I was taught that the "best contractual situation" was where the contract price closely reflected the sellers actual costs..... and continued to do so in changing circumstances (using escalation formulae). .... if you are both not winning, then one party is sure to leave. I look forward to your proposed plans as they are more likely to follow similar principles - and they point to you becoming more likely to survive changes in economic conditions. Regards, Harry. Comment (1)
can you explain to me, why HSPA is so expensive compared to adsl per GB.
surely hspa is the way to go with a country the size of AU. Comments (2)
No I can't.
The current rationales by the mobile carriers reflect their understandings of their costs as far as I can see. Comments (3)
I think any ISP should be envious of the fact that you could build up to 90,000 customers without advertising, these PAYU plans are another great offer that can help increase churns, you'll know if it's working, the hate mail will increase
Comment (1)
Exetel seem to be the only Australian ISP doing anything innovative/interesting at the moment. Hope it all works out.
Comment (1)
I personally think the PAYU plans are exceptional value for money and will recommend them to users who only require a small allowance to check e-mails and banking.
I've known some users who are paying through the roof for plans they don't even use a hundredth of. This is ideal - a fast, reliable service for a minimal fee. On a side note - I hope Exetel manage to sustain themselves with growth and profits for the next 5 years. They are by far the best ISP I have been with, and their continued success is definitely a good thing for consumers. The balance between offering honest, good value plans and making 'decent' profits must be a tricky one. Hope you get it right. Comment (1)
If I was a low end user who had only 1 Gig of downloads a month then this might be a great deal, but once I get over 2 Gig of downloads, the old plan (I am on 1500/256 with up to 6 Gig for $40) is better.
So it all depends on what you are comparing the plan with....... Comment (1)
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