Friday, August 17. 2007
I was filling out the quarterly statistics report imposed on us by the ABS earlier this morning and some of the ratios I was filling in looked very strange. As it's, yet another, bureaucracy imposed and, to me, completely meaningless chore I have never paid much attention to providing this information. However the current figures prompted me to look up the reports from previous quarters which I had kept in a table form but had never bothered to look at the table in any detail before.
It had been obvious over the last 12 months that the demand by DSL users for increased downloads had accelerated and had caused Exetel, as well as many/most other independent ISPs, to either increase their plan prices or to reduce their included data allowances - or in some cases both.
When I re-worked the format of the table a very stark 'picture' emerged. In the quarter ending 30th September 2004 the average bandwidth usage at the peak of the heaviest usage day per customer was 18 mbps; in other words Exetel needed 1 mps of ingress/egress and customer connection bandwidth per 50 customers. I then added to the table the cost of bandwidth per mbps over the same period so as not to distort the cost impact.
This usage increased to 22 mbps in the quarter ending 30th September 2005 and increased again to 25 mbps in the quarter ending 2006. The increases were significant in that they represented around a 20% increase in bandwidth usage per average customer per year. The cost of ingress/egress bandwidth fell by around 18% in the same timeframe so the cost impact was minimal. The customer connection bandwidth didn't fall as much - less than 6% over that period - but the cost per customer of that bandwidth is much less so the financial impact was not that significant.
However in the nine months from 1st October 2006 to 30th June 2007 the average usage per customer at the peak period of the busiest day has increased from 25 mbps to 35 mbps - a 40% leap upward in that period. It's true that the cost per mbps in that period has fallen by around 12% but the cost impact that caused the July 1st 2007 price increases remains only 'line ball' at the current usage levels which will now need to be watched even more closely.
It's likely that ingress/egress, irrespective of what appears in the press recently, will fall by another 10% between now and the end of 2007 which will provide a counter to increased usage and in 2008 the costs of providing will drop sharply if the planned P2P caching is as effective in Australia as it is in other countries.
Irrespective of any positive effects from caching it appears likely that Exetel's current IP bandwidth demands will exceed 2 gigabits per second within the next 6 - 8 months and that in itself will pose some interesting network design issues.
Never a dull day (even when doing the dullest of bureacracy imposed trivial tasks).
Thursday, August 16. 2007
As anyone who has heard or read my opinions on Exetel investing money in its own DSLAMs would know - I have ridiculed the concept on both the foolishness of deploying 25 year old technology which is right at the end of its use by date and the likelihood of Telstra making any such investment worthless any time it chose to do so. Maybe events will prove me to have been totally wrong on those assessments - but for the right reasons!
Some two years ago I had a cursory exchange of 'interest' with four DSLAM providers who had the ability to install equipment in Telstra's exchanges. All of the costings were pretty much the same from the three well known manufacturers (and really only differentiated in the attractiveness of their "financing" options) while the now better known Hua Wei was quite exceptionally economically attractive. However it appeared to me that the minimum costs were unlikely to be less than $10 million with an unknown amount of take up/ongoing interest and although a case could be made for an ADSL2 deployment it was very high risk (in my view) and I didn't ever seriously bring the case for an Exetel owned ADSL2 network to the attention of the other Exetel decision makers.
As it turned out we were able to get ADSL2 services from Optus at only a little more than our own costs would have been (excluding the inconvenience of bundling the telephone line rental and call charges) and that was 'risk free' so I told myself I had made a sensible and responsible decision.
Two years later the scenario has radically changed - partly because the cost of buying the SSS from Telstra has dramatically reduced and partly because - well I'm not really sure what the other "partly because" really is. It manifests itself as phone calls from each of the major ADSL2 DSLAM manufacturers, or brokers saying they repesent those companies, offering vastly improved terms, far lower prices and very, very quick activations for ADSL2 DSLAM ports in an array of attractive (to Exetel) exchanges in Sydney, Melbourne and Brisbane.
The pricing and financing are very, very attractive - no question about that; but why, assuming the offers turn out to be contractually real, are they being made? More importantly, what do these manufacturers know that isn't obvious to me? Is Telstra about to do something dramatic - or is it just that the forecasts of the ISPs who contracted for their roll outs aren't being met and therefore the manufacturuers are exercising their rights under whatever contracts they have to offer the 'spare' capacity to other prospective customers?
All very confusing. However we will now have to spend time looking at if such a scenario is possible in some limited number of exchanges in the CBDs of the major cities and, possibly, in some larger regional towns and cities that don't have too many choices.
Wednesday, August 15. 2007
Tuesday, August 14. 2007
Perhaps you remember the line in Jurassic Park where the Richard Attenborough character says, almost in despair, "Only the blood sucking lawyer is on my side!"
Annette and I have been extremely fortunate in our business and private lives to have encountered, and used on occasions over the past 30 years in both our business and private lives, a "blood sucking lawyer" who not only was a thoroughly decent man but who took a genuine interest in our affairs when dealing with the law was required and cared enough to always do an immaculately researched and perfectly prepared job in 'defending' our interests.
In Exetel's brief corporate life we have only had to use his law firm twice - once getting a refund from Telstra and once to deal with the unethical and crazy aaNet. Both results were excellent.
When we first knew him he was a young lawyer who was the principal partner in his own law firm who was recommended to us by our accountant whom we had also known for a long time. Over the years his start up partnership merged with ever larger entities where, until the last major merger, he remained the chairman of partners. In this article in yesterday's Australian:
the firm with whom he merged some two years ago was the subject of a glowing write up on its development and progress over the past few years. I was particularly struck by this comment in the article:
"We run flat and lean, we are hands-on. We have no grandiose concepts of the business. We have not put up our partner rates for three or four years, and profit has gone through the roof."
which directly reflect the aspirations for and the way we operate Exetel (except for the "profits going through the roof" which just isn't either possible or part of our plans).
If you're lucky in your private and commercial life you will never need the services of a lawyer but that is becoming a rarity. If you ever do need a lawyer then it would be wise to put as much time and research in to finding a lawyer (and I stress LAWYER as opposed to Law Firm) before you need one. If you're an 'average' person you won't know many or even any lawyers so the best advice on finding a good lawyer is to find someone with knowledge on this subject and seek their advice.
You may be "shocked" when you find out how much good legal advice and assistance costs you but, speaking from personal experience and observation, "cheap" legal advice is the most expensive you can get.
Monday, August 13. 2007
The telecommunications business is very tough and viciously competitive with high entry investment required and constant re-investment in infrastructure a month by month essential. Margins are low and deceit/fraud by a percentage of customers is endemic. Not the easiest scenario in which to make a sensible return on your capital at the best of times. You can never have too much money to invest in this business.
What really makes this business tough is the over billing by so many carriers and service providers which, because of the huge transaction volumes, is difficult to detect and can make a low margin business a no margin business almost indetectably. This over billing quickly runs through the capital reserves of a small company.
Exetel has many tens of thousands of users to whom we supply ten different services and we buy from up to ten different providers in supplying those services. Our Telstra Wholesale bill alone is over $1 million a month and our Optus Wholesale bill is approaching $1 million a month with several other bills above $100,000 a month.
We recognised from the very start of Exetel that control of customer payments (and defaults) and control of supplier bill accuracy was at least as essential to the viability of our business as 100% uptimes and sustained fast throughput of the services we sold.
What we didn't fully understand was that various suppliers would have such difficulties in billing their services accurately especially when they introduced new services and we certainly didn't anticipate the magnitude of the deficiencies in their billing systems. My previous experience in carrier bills was that there were many errors but the errors in the customer's favour cancelled out the errors in favour of the supplier over time.
For the first two years of our operation we took our time developing our own billing systems as we added new services and ensured that those billing systems not only were 100% accurate but were comprehensively reviewed on an ongoing basis and changed to meet the changes in the supplier bills that generated the input. As we developed each billing system we also developed the 'reverse' billing system that checked the input we were receiving from our suppliers.
Our intention was to be able to predict to the last tenth of a cent what we should be charged for the ever changing volumes of charges from our suppliers and ensure that we on billed all of the applicable charges at the planned pricing and therefore we achieved the planned profits. This is a very difficult and time consuming process and needs high skill and dedication levels and it's something that I had never been involved with in previous companies.
If we hadn't done it we would have been broke long ago.
At least two of Exetel's suppliers have billing systems that were/are so bad they couldn't actually bill within 20% of the real charges that should have been made for over six months - and strangely their billing systems never undercharged, they only overcharged. Not only were their billing systems hopelessly inaccurate the attitudes of the people within the supplier were aggressively demanding and they simply refused to recognise that their systems had such major deficiencies they were not fit for use and they, and the services they billed, should never have been deployed or offered.
In the case of one supplier Exetel overcame the issue by only paying based on our purchase orders - this suited the supplier because they received their money on a daily basis within 48 hours of providing the services - as opposed to offering 30 day terms and then having part of the payment delayed while the disputes were settled.
In the case of the other major supplier it has taken Exetel over 9 months of constant 'toing and froing' to recover over $500,000 of overpayments made by Exetel going back over an 18 month period (we had to make the over payments because our policy has always been to pay the face value of each invoice and submit a claim for credit to be subsequently settled and in our very early days we couldn't risk the services being suspended as the supplier refused to accept there was any sort of problem). It's probably cost Exetel over $150,000 in personnel and system development time (and far more than that in loss of business) but if we hadn't done it we would no longer be in business.
I like to think that Exetel is an extremely efficient company despite its very small size (which it almost certainly is) and I really have problems understanding how companies so much larger than Exetel can make such a total hash of both writing and then debugging fundamental programming code essential to the provision of their basic services.
If their wholesale billing systems are so error ridden I wonder what their retail billing systems are like?
My only comfort, and it's very cold comfort, is that they would have been billing their other wholesale customers who used the same services equally wrongly and, if those customers haven't picked up the errors, probably are making 'life' very difficult financially for those organisations.
Sunday, August 12. 2007
Recently my brother in law Richard who currently works in NYC returned to Australia for a few days and stayed with my father in law who has always been a Telstra user for all telephone and internet services and currently has a BigPond 1500 DSL service.
My brother in law, a very adept technology user, didn't give a second thought to using the DSL connection to keep up with his demanding work load as the COO of an advertising/market development company.
Big Pond are very efficient in keeping users advised by email of the usage on their low download inclusion DSL plans and the included 400 mb limit disappeared in the first hour Richard used the connection and soon the advices were telling my father in law that his excess usage bill was over $400.00 - all racked up in less than 3 days. (financially it was no burden as Richard paid for the excess).
As my father in law now keeps in touch with Richard via skype video phone and is beginning to use other more download hungry applications we decided to churn him to an Exetel plan and this caused us to look at his current Telstra 1500/256 plan whch was $39.95 including 400 mb of download.
He has had that plan for a while and has never exceeded the 400 mb so it was a pretty good deal for a low volume user who are the vast majority of current ADSL users. In fact its a deal that a Telstra Wholesale customer can't match - and that's without taking in to consideration that Big Pond gave him a free modem and a no cost install.
Exetel pay Telstra Wholesale $36.30 for the 1500/256 monthly port rental and $3.95 would barely cover the cost of 400 mb of ingress/egress and connectivity bandwidth and one support call a year. It certainly wouldn't allow the recovery of the $88.00 set up fee and the $40.00 or so cost of a free modem and courier delivery.
I suppose if the pricing is based on one major downoad mistake/excess per year it could be made workable but it's a difficult concept to put in place for a small ISP.
Nevertheless, we will have to add a similar plan which we will do early next week. Just one more sign of the very tough times for independent ISPs becoming even scarier.
Saturday, August 11. 2007
I received an email today from a person complaining about an aspect of his dealings with Exetel and part of his peroration, intended disparagingly of course, was a reference to "but what can be expected of a budget ISP?" I have just finished replying to him and, apart from dealing with his specific grievance, I laid out some aspects of providing internet services to end users and asked him to more explicitly explain to me what lead him to use the term"budget" in a disparaging way. As I wrote in my reply to him - Exetel's whole basis of being in business is to offer services at the lowest cost available from any provider in Australia and therefore it is a "budget" ISP in the truest and best sense of that epithet.
Providing an internet service to some tens of thousands of end users is not cheap. Exetel's bills from its suppliers for IP, connectivity, co-location and other services are well in excess of $2 million each month and constantly growing.
When Exetel was created it aspired, and aspires, to be the best ISP in Australia for the people who choose to use our services and we spend every day of operation doing everything possible to meet that aspiration. In most, measurable or 'concrete', ways Exetel meets those aspirations:
1) We deploy more ingress/egress bandwidth per user than peak usage requires.
2) We deploy more connectivity bandwidth per user than peak usage requires.
3) We deploy more routing and server power per user than is required to process their needs.
4) We provide more peak downloads per customer dollar than any other ISP.
5) We provide more off peak time and more off peak downloads than any other ISP.
6) We provide more email addresses and home web space than any other ISP.
7) At 18.5 hours average we restore a 'down' service as fast as the up stream provider can achieve.
8. Our auto, twice daily, telephone call backs on the progress of faults are as good as any in the industry and far better than almost all.
9) Our automatic customer advices from about to expire credit cards, through weekly call charge advices to the auto restore of a blocked service are the best, and fastest, in the industry.
10) The customer time taken to log a service fault 24 x 7 52 is the fastest in the industry.
11) The support/sales telephone call response time at an average of 1 minute and 15 seconds is the fastest in the industry.
12) The email response time of an average of less than 1 hour and 20 minutes from 8 am to 6 pm, 7 days a week is better than any other ISP I have ever been associated with.
The reliability of the network has been around 99.99% since we connected the first ADSL customer.
I would doubt that any other ISP in Australia could equal even 50% of the points set out above.
Budget? Only in terms of the monthly cost of the service as far as I can see but the really interesting thing is that we spend so much of each day working on ways to improve every aspect of the services we deliver to our customers.
Friday, August 10. 2007
Having absorbed the 'lessons' from the way European telcos and service providers are bundling data, wire line telephone and mobile telephone I've been looking at the ways the Australian telcos are changing their marketing and provisioning strategies.
The most obvious 'copy' of the European scenario was the Optus "Fusion" offer of unlimited local and national calls and calls to Optus mobiles at different price points starting at $70.00 for 2 gb of downloads and uploads.
However Telstra, Optus/Virgin, Vodafone and Three are all offering increasingly more attractive data and mobile combined services that are all aimed at becoming replacements for the current ADSL/Wire Line telephone user.
As all of these companies have had to take a very long investment and service pricing view to establish their Australia wide mobile networks they pose a far greater threat to the future of today's independent ISPs whose ADSL business was, in many ways, protected by Telstra's monopoly on the base network over which the service is provided. Telstra was always going to keep the pricing high enough for small wholesale customers to compete and make a profit - that scenario isn't going to apply to four competing mobile network owners who have discounted "through the floor" over the past decade in cut throat 'battles' for marketshare.
Of the mobile based offerings, Virgin/Optus currently offers the most attractive but there have been a rapidly increasing number of offer improvements by the three other mobile networks over the past six months which, at least to me, seems to clearly indicate the start of a data providing war along exactly the same line as the previous (and current) mobile handset and call cap pricing wars. I would think that the current Virgin/Optus offer will be matched and surpassed by other providers in the very near future.
All of the mobile companies are very adept and very experienced in using their customer data bases to promote new services and offerings and as there are far more mobile users than ADSL users the four mobile providers have vastly superior and more competent ways of promoting the new data services - undreamed of resources and expertise compared to the ISPs who offer ADSL.
What they obviously don't have, at least at the moment, is the masses of spectrum/backhaul capacity that will be needed if the take up of data over mobile seriously takes off - nor do they, yet, have the capacities to handle data at the sorts of volumes that could be required - but what they are clearly indicating is that they regard data as the new SMS in terms of driving increased mobile revenues to compensate for the flattening of revenues caused by their own 'capping' wars.
An interesting issue for all of them will be how to most efficiently crank up their 'street front' selling and fulfillment methodologies into the very different processes that are required to offer, fulfil and maintain and support data users on any significant scale.
Anyway - all of that is those four companies' problems and they have more than enough resources to deal with them.
Of very significant importance to me is how to quantify just what impact the new mobile based data services will have on Exetel's current and future wire line based data users. It is an inherently scary scenario because the logic of using mobile rather than fixed wire/cable is compelling - at least at relatively low volumes (which is the overwhelming majority of users of data today) and 500 mbps to 1,000 mbps download speeds.
Exetel has been talking seriously to two data via mobile providers for some months now without getting very far but that is showing some signs of changing. However neither of those mobile providers is in a position to offer Exetel a true wholesale solution but only a hybrid wholesale/reseller solution.
I've now raised the priority on finding both a repacement to the Unwired service we currently offer and an Australia wide mobile data solution to the highest priority for the next 5 months and we will devote far more resources to finding and implementing such a service that we have to date.
......and there goes the remainder of the relaxed attitude I had when I returned from holidays only 17 days ago!
Thursday, August 9. 2007
I've spent most of the time since I returned from holidays looking at the career development of all Exetel personnel in conjunction with reviewing the development of the company over the coming three years.
Exetel has always planned two years ahead in some detail with planning for the third year not given a great deal of thought. The time seems to have come where a little more thought needs to be put in to three years ahead although the uncertainties that now seem to be proliferating in every aspect of Exetel's current and future planned activities make this even more difficult than in the past.
Exetel's previous plans have suffered from the major disruptions of dis-entanglement from the poisonous relationship with the defunct aaNet and its crazy owner in mid 2005 and a year later suffering the consequences of massive problems with the Optus ADSL1 service for three months. These events, coupled with the more usual run of road blocks and difficulties impacted on abilities to exactly meet our planned 'numbers'.
In summary we achieved the following revenues in the last 4 financial years (bearing in mind FY 2004 was only 4 and a bit months):
FY 2004 $ 1,000,000
FY 2005 $10,000,000
FY 2006 $20,000,000
FY 2007 $30,000,000
In terms of other growth we achieved the following:
From one employee, me, in January 2004 we now have 30 full time employees.
From 1 customer of our 1 service in February 2004 we now have over 60,000 users of our 10 different services.
From revenue of $5,000 in February 2004 our revenue in July 2007 was a little short of $3,000,000.
Each month from February 2004 to July 2007 our monthly revenue has increased each month.
Since January 2005 the key business ratios of:
Employees to Revenue
Employees to Number of Customers
have exceeded worldâs best practice and far exceeded the efficiencies of all other Australian ISPs.
The efficiencies that we have achieved and continue to achieve has continued to allow us to deliver on the key two objectives we started the Exetel business to achieve:
âTo deliver the highest quality of service at the lowest cost to the end customer of any communications company in Australiaâ
The objectives we have in place for the coming three years are, relatively, conservative and are solely premised on our commitment to remaining able to deliver on our companyâs objective. We must grow our revenue, and therefore our profitability, to provide career growth for our employees and to ensure that we continue to be able to buy base services and products at the lowest possible pricing.
Our base objectives for the coming three financial years are:
Year Revenue Customers Employees Services
FY 2008 $40,000,000 80,000 39 12
FY 2009 $50,000,000 100,000 48 13
FY 2010 $60,000,000 120,000 57 15
As there are so many unknowns at this time, and as I don't expect that situation to change over the coming 3 years, all of the current assumptions will be constantly reviewed - even more frequently than they have been in the past.
Wednesday, August 8. 2007
I met with the company with whom we are working to provide streaming TV and VOD services yesterday to progress what we might be able to do in terms of offering such services.
They demonstrated their latest streaming software that provided pretty good definition and very clear sound at 340 kbps compared to the 1.2 mbps that TVB insist must be used to deliver their services.
While I quite like the concept of 340 kbps to deliver streaming video it isn't much use if the major TV stations insist on 1.2 mbps - which, anecdotally, I don't see them moving from. However it was always going to be more difficult and more time consuming to complete an agreement than appeared possible some 6 weeks ago so I'm not really surprised.
I looked at the current TPG streaming TV offering and wasn't very impressed with the constant buffering which indicated that there were major network capacity constraints in delivering it. Also the free content was a mishmash of the free content widely available from any number of 'content providers' and, I would have thought, was very unappealing to the majority of Exetel's customers.
I still believe that offering specifically targeted 'foreign language' content will be commercially viable and that offering a wide range of 'special interest' content will also be viable but this process is going to take 2 - 3 years to fully implement and getting away from the 'set top box' concept so entrenched in many content provider's understanding of copyright protection will only impede the implementation.
However, we continue to make progress on solving the various technical and process issues of delivering multiple channels cost/effectively (both to us and the end user) and the content options continue to evolve so it will be interesting to see how it eventually turns out.
Tuesday, August 7. 2007
We have been looking for a replacement to the Unwired "wireless" DSL offering for over 18 months but have failed to find a really good solution. The Unwired solution never really developed, as least from our perspective as a wholesale customer, as Unwired seemed to lose all interest in wholesaling their service and Exetel only remains as a wholesale customer as Unwired insisted on a 5 year contract.
At it's peak there were over 2,500 Exetel/Unwired customers and for the majority of those customers the service was quite acceptable. Unwired were always very slow in upgrading their base stations and backhaul network so for some customers there were periods of poor speeds and drop outs but that was not the experience of the majority.There are still a large number of Exetel/Unwired users who have been with us for more than two years (almost half of the customers who signed up in the first month of offfering the service three years ago this month are also still with us).
We would have been happy enough to have continued using the Unwired network as it provided a solution for a significant number of people but Unwired clearly didn't want the inconvenience of wholesale customers so we started to look for alternatives.
There is a very obvious opportunity for the mobile telephone providers to provide DSL over their fully established GSM networks and all of them have begun to do this. Exetel have been talking with Three and Vodafone about a wholesale arrangement but have made only glacially slow progress to date. We haven't talked with Optus Wholesale who seem to have a good offeing via their Virgin mobile subsidiary.
We would expect to conclude some sort of arrangement with Three in the not to distant future but it will be a re-sale arrangement not the wholesale deal we really need to provide both difference and competitive value in the market. However, if it's successfully concluded, it will be a start to offering DSL without the need for a telephone line and that is something that is very inmportant if the problems of pricing that will always be present in re-selling a TW service are to be overcome in the future.
Monday, August 6. 2007
While I was away I noticed the significant trend in the UK was for the main DSL providers to offer a combined DSL/Wireline/Mobile service at a fixed price including all/a large number of mobile and wireline calls. Typicaly a combined 'package' was between 25 and 30 UK pounds.
During that time, Optus released a similar deal (without the mobile) at $70.00 which I would think would be a major winner in moving the remaining dial up users on to ADSL2 in the exchanges where Optus can offer the ADSL2 service.
The 2 gb download limit won't worry a dial up user and the free modem and free activation is a major incentive.
I also looked at Dodo's "free" ADSL offer along with their $10.00 and $20.00 offers which are eye catching and I would imagine will also be attracting a lot of inexperienced users as they too seem to be offering free modems and line activations.
The fine print make these offers a little less attractive (as do their UK counterparts) but they will, at least as I see it, be very successful in moving people off dial up.
Looking at the other ADSL2 offers from the ISPs who provide those services doesn't raise much enthusiasm - they are mostly very "me tooish" with complicated conditions and set ups - with the possible exception of the new TPG offer which stands out from the rest - at least as far as the 'heavier user' of DSL is concerned.
Exetel was not set up, and still isn't set up, to cater for a large percentage of its users being new and inexperiencd with DSL - let alone dealing with their telephone line issues. So I don't think we will 'chase' that market sector as I would prefer to continue to provide services to people who have had heir 'hand held' by some other ISP through their basic learning curve and then be able to provide services via a free or low cost churn.
So I made a number of decisions today to change the ADSL2 offerings and the changes will be put in to effect starting today and be in place at the latest by the end of the week.
The current ADSL2 with telephone line rental plans will remain as they are (though to make 'comparison shopping' a little easier we will increase the telephone line charge by $5.00 and decrease the DSL charge by $5.00) and I will add three new plans to widen the target market a little. The new plans will either start at $10.00 a month or $15.00 a month (I'm still waiting for some information needed to make that decision) and one plan will include 'unlimited' wire line telephone calls.
It will be interesting to track the results over the next 4 - 5 weeks.
Sunday, August 5. 2007
At least at this moment, the only price change I would consider making is upwards.
Saturday, August 4. 2007
It's a self evident fact in commercial life that a primary requirement is to satisfy, on an ongoing basis, the expectations of the organisation's customers.
It must be equally evident that it's necessary to satisfy the expectations and aspirations of the organisation's employees who deliver the services and provide maintenance and support of the services to the customers.
I have spent much of the last week reviewing the current performance and future career aspirations of Exetel's 27 current employees.
'Historically', Exetel has had a very, very low staff turnover with only 3 people who had been with us past their probation period choosing to leave the company in the past three and a half years. A low staff turnover is one of the very few benefits of a start up company that is reasonably well managed as the owner of the company can personally select the people they employ and then can remain close enough to each person to ensure that their career progresses and that any problems/issues can be detected and addressed almost as soon as they arise - this is because they can choose to work, literally, within earshot of all of the people in a small company
At approaching 30 employees that method of operational management isn't possble and, inevitably, problems/dissatisfactions arise that aren't detected as quickly as in the past and even if they are detected either aren't addressed effectively enough or sometimes not addressed at all.
As this has only more recently become a problem for Exetel we have not had any process in place to sensibly address it until now. Our method of addressing it was to distribute a 'template' set of questions to each employee to give them a framework to think about aspects of their current job and to offer ther views and then to look at what positions and remuneration they would like to aim for over the coming five years. Each employee then had a face to face meeting with a director of Exetel who wrote detailed minutes of the meeting which were then reviewed by another director who writes to each employee commenting on the abilty of Exetel to address any concern they raised and to give a summary view as to whether or not Exetel is likely to be able to meet their future salary and position expectations and timeframes.
Following the review of each persons concerns and aspirations and writing the summary letter to each employee I will spend some time this weekend looking at ways of addressing the concerns/inadequacies in procedures and operations that have been raised and what changes need to be made to fully address those issues in terms of process and procedure change and whether some re-organisaton of responsibilities needs to be done.
Equally importantly will be the work that needs to be done to help each employee put in place, and have agreed, the daily/monthly work, internal and external education they need to do to meet their stated short and medium term salary and position aspirations.
Exetel has been fortunate to date that its year on year strong growth has provided a 'natural' career progression for all current employees as that growth has continued to provide more, and more complex, things to be done. This process is a re-inforcement that Exetel will only be able to keep its most talented peope if the company continues to grow.
It will be an interesting weekend.
Friday, August 3. 2007
I have been interested in the trending up of ADSL2 applications compared to ADSL1 applications from new and 'churn' users over the past three months. Obviously this has been assisted by the Optus promotion of free activation compared to their very, very high "standard" costs.
It looks like ADSL2 applications will exceed ADSL1 applications for the first time this week and that trend is likely to continue for as long as Exetel continue to offer no cost activation. This surprises me because of the relatively few exchanges available to provide ADSL2 compared to ADSL1 (less than 300 for ADSL2 compared to more than 5,500 for ADSL1).
I think it also reflects the plethora of "free" ADSL1 deals being thrown at the ADSL1 buyer from both Telstra and Optus and also from a number of other ISPs. I'd love to know how to make the economics of such deals work but, no matter how I try and twist the numbers, every "free" deal I come up with shows a loss; no matter how I manipulate the time on contract assumptions.
It's also been interesting to see that the number of ADSL1 8192/384 and 1500/256 applications continues to exceed the 512/128 speed services by an increasing margin each month since the start of this year. This is in stark contrast to the previous three years when 512/128 services regularly exceeded 70% of total services.
I suppose all of this is just another reminder that no, highly competitive, 'technology' market remains the same for more than a few months.
I must find something new/different to offer to increase Exetel's share of people who already have ADSL churning to Exetel rather than to other ISPs - for current ADSL users, presumably, a free churn will offset free installation and a free modem offer from Telstra or Optus etc will have little appeal as they will almost certainly already have a better specified device.
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