Monday, February 28. 2011
.....like the people it is intended to serve.
I took/wasted some time reading the AFACT vs iinet appeal judgments over the weekend spread over the two days as it is very heavy going for a legal illiterate like me. I had kept a fair bit of the published documentation from the initial case and some of the less childish published comments on it and it, again, amazed me how much money could be spent on achieving so little. The blame for this must fall squarely on the AFACT barrister, possibly partially on the briefing solicitors, for conducting such an inept case - a little like missing a penalty in soccer it was done so badly. I couldn't help thinking while reading the appeal opinions that even the appeal judges, all three of them, were basically saying "for goodness sake - even a junior barrister should have been able to show the two iinet witnesses were perjuring themselves and that you were not bringing them to account for their obvious contradictions and obfuscations let alone asking even the most obvious questions or questioning the most ridiculous of their claims as set out in their affidavits".
The two judges dismissing the appeal, let alone the judge who wrote a dissenting view, have raised enough issues to make it a near certainty that AFACT will appeal to the High Court where wider views are normally taken in a different context and who knows what result that may bring? When you read the points raised by all three judges you realise that they actually progressed the legal view on downloading copyright material in no real, or any other way, benefit at all. Not that it matters in any particular way as events in Australia are a side show. Long before an appeal to the Australia High Court could be heard it seems more than likely that countries in the EU, more than likely the EU itself, will progress their own legislation that will go much further than the laws currently or about to be in place regarding copyright infringement via the internet.
Like so much in life today the appeal judgment provides nothing of value and probably, if it mattered at all, did more harm than good. Australians are as criminally inclined today as inhabitants of most 'civilised' countries on the planet and whether it is stealing copyrighted material that allows the seamless transition to looting abandoned homes in flood affected areas of Queensland is an interesting question. The prevalent view in Australia seems to becoming that "if you can get away with theft then what's the problem?" Perhaps it is not drawing too long a bow to suggest that the internet and lousy parenting has allowed stealing to become the "OK" option for acquiring things a person thinks they want and other people's rights of ownership are immaterial as they can be so easily overcome. Australia has an unhappy history of dishonesty from January 26th 1788 onwards where stealing when the chances of being found out are low was inherent from that day forward by Governors, Prime Ministers, State Premiers downwards.
Maybe there have been decent elements of Australian society over the last 200 or so years but it has never seemed to be a majority and today I think you would be hard pressed to find the legendary "honest man" very often in any aspect of Australian society. The saddest element of that Diogenic view is that the internet, one of the most beneficial technologies yet seen, is the major culprit of turning potential honest boys and girls into inveterate thieves before they reach puberty and therefore have little hope of ever living an honest adult life.
C'mon Rataplan, time to go to the office and attempt to put in an honest day's work....if we can find something to do that would benefit from such an unusual approach in Australia.
Copyright © Exetel Pty Ltd 2011
Sunday, February 27. 2011
Exetel has had, for as long as I can remember, a process of formally discussing each employee's career aspirations each six months (completely separate from job performance or other operational reviews). These reviews have, for the past few years, been carried out by Annette - both in Sydney and in Colombo (where they are quarterly rather than six monthly because of the 'newness' of the operation there and our general lack of understanding of all things Sri Lankan). The Australian half yearly reviews are almost completed and I read through those that had been completed yesterday as well as discussing the 'side notes' with Annette over what passes for Saturday lunch in our home. One of her email 'jokes' to me during the week was that Exetel had better make financial provisions for long service leave as so many of our people would qualify for that soon.
That is a quite serious problem (not the financial implications but the fact that so many of our first hires are still with us). Back in early 2004 we were a start up company with no problems (assuming we survived) in growing rapidly and always having to find the 'new' expertise within our few people to do the new things that constantly were required by a growing company. Not only was everyone pushed beyond every level of expertise they may have possessed at the time by constantly learning to do new things they were stretched to the limit by the rapidly growing 'transaction volumes' generated by acquiring ever more customers and the growing complexity of the constantly widening 'product range' and the ever increasing number of new/different suppliers.
Our lack of supervision, let alone management, skills within our predominantly recent graduate personnel made every day a challenge in all sorts of different ways. Over time we reduced the impact of growing transaction volumes by constant automation and years passing with very low staff turnover addressed the other major problem of task/process/product unfamiliarity. These were very, very good aspects in a growing company and have benefited Exetel and its suppliers and customers enormously - always dealing with people who were totally familiar with all of Exetel's internal processes and procedures and with a deep knowledge of all the details associated with them. Because we only hired very 'bright' people we created a two edged sword scenario simply because very bright people have an ineradicable need, not desire, to continue to stretch their minds doing new and ever more difficult things.This results in the inevitable situation where our people are continuing to look for new challenges at a faster rate than the current growth of Exetel in Australia (with the exception of sales and sales engineering) may be able to provide them.
In our particular situation the problem is compounded by the fact that so many of the company's functions are now dealt with in Sri Lanka and while several of our key people have had 6 or 12 months knowledge transfer assignments in Sri Lanka their professional futures, quite understandably, are in Australia. So Annette found that around 10% of our Australian personnel are now looking for increased responsibilities and new challenges that, for the first time in our brief corporate life, we may struggle to find for them. It's a strange scenario, at least for me, and it's something I, and others, will have to give a great deal of thought to over the next few days. The strangeness is to find it not so easy to continue to find future challenges for people in a company that is planned to treble in both revenue and personnel numbers over the next 2 - 3 years.
One down side of splitting the company over two different countries I suppose.
Copyright © Exetel Pty Ltd 2011
Saturday, February 26. 2011
It was a more than usually 'incident packed' week with a more varied range of events and issues than usual. - one of general industry interest and others specifically relating to Exetel's business.
In terms of specific interest to Exetel the re-signing of the Telstra contract was significant if only because initially we had intended not to do that. I am still unconvinced that it was the best thing for us to do and certainly my reluctance was born out by the apparent 'elation' our resigning caused in the Telstra Wholesale 'ranks' as evidenced by the cast of thousands invitation to "celebrate the occasion" at one of Sydney's most expensive restaurants. However, from Exetel's viewpoint there are some pluses of which the much wider area to sell business EOC services is probably the main benefit from Exetel's longer term perspective. The lower ADSL2 and 8192 ADSL1 costs are a plus but not meaningful in this extended period of Telstra Retail continuing to offer ADSL services at well below our wholesale buy prices. Whether having the ability to re-sell Telstra's PSTN lines and telephone charges proves of any real benefit to a company that has a very, very high percentage of its residential customers using voip remains to be seen. Then there is the month on month reduction of around $70,000 in TW charges which is a good short term benefit.
I didn't bother to read the multitude of comments on the AFACT/iinet appeal as it's only interest was that it was a split decision which, almost certainly, you would think, will result in a further appeal and the likelihood of some High Court generated 'legislation' that might actually address the major issue of the, incredibly ineptly run, original law suit - that ISPs are conspiring to return Australia to its original situation where the majority of its population are criminals and where every Australian is encouraged to steal from the age at which they are able to use the internet with all of the devastating consequences that will have on an already lawless society. For those 'people' who are unable to understand that concept try brushing up on what is happening in terms of copyright law in the EU among other places. On balance, if I were AFACT I would be feeling a lot happier at the conclusion of the appeal than at the conclusion of the dog's breakfast of a case run by their inept legal 'team' and would be viewing the future much more brightly:
The 'back to the future' method of providing services to residential uses via approaching employers resulted in the first four Exetel business users signing up to provide discounted ADSL1 and ADSL2 services to their employees. This was remarkable in that it took less than 24 hours from the sending out of the email advices to our business customers for this to happen - which, I have to say, really surprised me - positively of course. I won't repeat what I said yesterday but sometimes the 'old ways are the best ways' and they never have been improved upon. It will be interesting to see what transpires over the coming months.....and we will now return to the 7 years ago method of 'offering' residential ADSL services more widely.
The voip sales and technical training in Colombo is, reportedly from several sources, going well with the first voip business sales made by Sri Lankan outbound sales personnel - "imminent".....which is the only real test of the effectiveness of any sales training. The next week's training will be interesting based on hands on coaching and refining of the sales methodologies and changes to the web site and sales and technical documentation. In the initial planning late last year the sales of voip services to business users was going to be done from North Sydney but since Clarissa's first training of SL personnel last November it has become obvious that this, and other outbound sales programs, are far better done from Colombo. Again, it will be interesting to see how this works out.
Late in the week (Friday) we finally completed the discussions with Optus to allow us to offer their retail wireless broadband services which will allow Exetel to provide 'standard' wireless broadband services at far lower prices that our 'premium' services are priced. Our value add to the 'standard' services will be that we will reduce the monthly price by forgoing our wholesale commission and therefore reducing the cost to the customer quite substantially. I think a wireless broadband service for $25.00 a month for 5 gb of data will be very attractive to low volume ADSL users - time will tell if that's a correct assumption.
Perhaps as can possibly be seen from the few examples I have given above a lot of quite positive progress is being made by Exetel and possibly the peripheral outside activities that have some influences on Exetel. For whatever reason(s) I feel generally more relaxed about the first half of 2011 than I have done for some months.
Copyright © Exetel Pty Ltd 2011
Friday, February 25. 2011
.......it is according some unreasoned adages but they offer nothing to support the view other than the bald assertion.
It occurred to me yesterday that I couldn't remember going back to anything either geographically or in terms of decision making in various other aspects of my life. I wasn't being even vaguely 'philosophical' in this consideration but I was thinking through what to do about residential ADSL in terms of the revised Telstra contract terms and the likely offers of Telstra's new win back efforts and how the various other suppliers will react to whatever now happens. It's obvious, at least to me, that we have to continue to change from everything we have done in the past to overcome our inherent disadvantages of size and marketing/advertising budgets (nil as always in our case).
This was underlined by the Telstra statements that they had 'won back' over 160,000 ADSL customers and acquired over 1 million new mobile customers over the past six months. Now those numbers sound impressive but when you consider the likely 'money give aways' that made that happen the cost per 'win/win back' seems totally out of line with the value of the 'win backs'. I have no details other than the basic announced numbers and I may be quite wrong in my assumptions but it seems obvious that it is costing a lot more money to 'win back' each customer than the likely profit could recover in any realistic time frame.
Obviously, I have never understood anything about 'mass marketing' and therefore I can't begin to understand how to use money wisely (assuming we had any which we don't) on advertising to residential customers. So it occurred to me that we needed to go back to the most successful 'marketing' we ever did - in the very early days when we first 'opened our doors'. This train of thought was brought to mind by a simple idea from the new person who is now increasingly responsible for residential ADSL. She achieved a remarkable result (which cost nothing) by re-defining our employee ADSL2 offer and sending a simple email to our thousand or so corporate customers asking them if they would like to take advantage of the new pricing for their employees. The positive response in the first few hours was overwhelming - at least ten times larger than I would have expected. It's far too soon to quantify what the end result will be but it was a forceful reminder that we used to be much cleverer, and much more successful, using our brains rather than the bludgeons now favoured by competitors with money to spend on advertising.
Hence my train of thought - which included trying to remember why we stopped using those very successful processes which were responsible for building Exetel so quickly over it's first year of existence. Try as I might, I just couldn't remember. But, it seems that we have forgotten just how successful our initial programs were in getting residential customers by never addressing residential customers directly or via 'traditional' marketing/advertising methods. So, is it possible to go back to those 'old' methods? Why not? They worked incredibly well then before, for whatever reason we stopped using them, so is there any reason why they can't be 're-packaged' and used now? My initial thoughts were that we were in a far better position now than we were in seven year's ago - and Mel's simple email certainly demonstrated that.
So....back to the future?.....with several major embellishments that simply weren't either available or possible to/for us seven years ago? I think Mel may have struck gold with her first attempt at implementing a new residential ADSL strategy....and we already have all the mechanisms and processes available.
Copyright © Exetel Pty Ltd 2011
Thursday, February 24. 2011
....we resigned a contract with Telstra Wholesale that committed the company to growing the number of ADSL services it buys from Telstra Wholesale while also agreeing to now sell Telstra PSTN services and also selling Telstra's EOC services.It is the first major decision made by Exetel's new Sales Director and certainly one that would not have been made without his different views of the 2011 marketplaces in which Exetel operates. If I had still been making those sorts of decisions I don't think I would have done that but then that was the reason we hired someone with completely different views. So a very positive, and early, achievement for Glenn that opens up new directions for Exetel.
It will be a big benefit in many ways. The obvious ones being allowing us to offer 'one bill' to that percentage of the market that considers it be beneficial, getting lower prices for ADSL2 services and the main benefit of being able to offer EOC solutions to a much larger number of businesses....admittedly at higher prices than we do at the moment but then we can offer nothing in those areas at the moment. It means we have to re-think our long established relationships with other providers over the coming months. Nothing changes today but the future is as uncertain as ever...at least it is to me.
We need to find a new 'direction' for our residential efforts and begun that process in January by starting to move the 'target demographic' (via plan changes) more sharply than we have ever done in the past. We have yet to complete the discussions with Optus on just how we can build our business volumes with them and while we have made some progress we have not reached any agreements on the key part of those discussions which is how to provide wireless broadband services to a much larger number of customers. This is quite important to the overall residential planning as it seems more probable than ever that a larger percentage of lower download users (sub 10 gb per month) will opt out of the PSTN/ADSL offerings and replace them with wireless broadband and mobile/voip telephony. We also need to find a way of offering mobile services at sensible costs to corporate users but that, if anything, is proving even more difficult. We will aim to resolve those issues by mid-March which may prove optimistic despite having an original time frame of December 31 2010.....hope springs eternal.
We also need to work with our other major provider, AAPT, to determine what can be done over the coming months to mutually improve our businesses. Currently our main expenditure with them is on ADSL2 ports and back haul which is very cost effective but confined to a very limited number of exchanges which are heavily provisioned by all other ISPs with their own DSLAMs. Our other major buying is EOC services for which they are our preferred and largest supplier because they were early to market and have far more cost/effective offerings than Optus and now Telstra. We have effectively built our EOC business based on AAPT services and expect to continue to do that wherever they have coverage. A difficult scenario and quite a challenge to be resolved over the coming weeks.
So it will be an interesting few weeks while we settle the IP and back haul contracts and make the various marketing decisions those final contracts will allow us to make. I am very happy to play no part in those processes for the first time since we commenced in business.
Copyright © Exetel Pty Ltd 2011
Wednesday, February 23. 2011
.....possibly even more so than the fictional Hannibal Smith. This particular plan has been three plus years in the making and everybody I talked to about it said it would never work.
We achieved a small, but very important mile stone yesterday. We made the first corporate sale (to a very large Australian business icon) from our new methodology of 'pairing' a Colombo based sales person with a Sydney based sales person. The Colombo based sales person does the cold calling to find Australian businesses who are out of contract for their data links and passes it to a Sydney based person to follow up the lead and submit the proposal and the required clarifications. We did the initial training earlier in February by sending a Sydney based sales person to Colombo to show the people there how to use the data base and how to make the approach calls. She obviously did a very good job and the success of her training and the quality/skills of the Sri Lankan sales personnel who were trained have borne out the decision to take this approach very, very quickly.
Of course, one sale does not mean that the program is now successful - but every program has to have a start and this 'start' has been achieved very, very quickly. We have currently trained ten SL sales people to contact a 60,000 company data base in the initial phase of this program which is aimed at, eventually, contacting 1,000,000 Australian businesses (from BHP/CBA type size down to home based start ups) and selling the full range of Exetel's business services either, as in this case by 'partnering' with an Australian corporate sales person or directly when they become more knowledgeable and the circumstances make direct selling achievable.
Exetel's most knowledgeable VoIP person is in Colombo at the moment doing two weeks of intensive training on Exetel's low end VoIP services so that the SL sales people can sell such services directly when they call smaller companies. To those smaller companies who would never consider a corporate EOC or fibre data link they will also sell Exetel's business ADSL and hosting services. At least that's the plan. As the majority of the current out bound sales personnel have developed their skills and knowledge via spending time in the inbound sales operation they have a very high level of knowledge of Exetel's ADSL services and also quite considerable knowledge of other Australian ISP's ADSL offerings.
There is nothing really 'new' in what Exetel is now trying to do in Sri Lanka other than the quality of the people being trained, the target marketplaces and the sophistication of the services - perhaps. However the overall approach is somewhat different and, if it successful on an ongoing basis, the size of the operation will be very large. I don't think a sales force aiming at signing some relatively significant percentage of Australia's business data users has been attempted before, though I could be wrong, and if it has it doesn't seem to have been very successful in making itself evident.
I am under no illusion as to how difficult it is going to be to make this happen over the coming three years but if every journey has to start with the first step then yesterday we made the first step - 1 down - 999,999 to go.
Copyright © Exetel Pty Ltd 2011
Tuesday, February 22. 2011
....who or what do they mean?
I am not sure whether it is the 'season' or whether there is an increasing missing of half year targets by all sorts of different sized companies but I am getting a much higher level of 'approaches' about various 'joint ventures' or merger/takeovers that I can ever remember in past years at this time. I mentioned the approach late last week from a Singaporean company which had come a few days after an approach from an Australian company and yesterday I had two more approaches, both from Australian companies, wanting to explore 'merger' opportunities. From these various, completely different, contacts it seems to me that there are things that are happening in the industry that I have either seriously under estimated or am completely unaware of - almost certainly the latter.
I suppose such re-evaluations are always going to happen when market conditions are changed for such a long period of time by the actions of the largest provider. This must be particularly true for those companies that depend on reselling mobile services and relying on their carrier suppliers to provide them with the massive commissions that have allowed them to build largish revenue based businesses over the past five plus years. Some of those businesses have been incredibly successful and have become a major part of the retail success in driving the huge growth in the numbers of mobile phone services used in Australia - approximately 1.25 services per man, woman and child inhabiting the continent at the present time. I noticed a Telstra statement that they get 30 million visitors a year to their current Telstra stores alone - 30 million - now that's an amount of traffic that would be envied by any retail chain in any market/product type. In that report Telstra said they were so happy with the results they were investing some huge amount of money to build a lot more retail stores.
But you have to think what MUST be the case today. The ABS stats indicate that every person from a day old infant to the oldest person in Australia already has one and a bit mobile services - is that some sort of definition of market saturation or is the expectation that saturation doesn't occur before that ratio is two or three, or more, services per Australian inhabitant? Presumably with Telstra claiming 1,000,000 net new mobile customers in the period 1/7/10 to 31/12/10 and Optus claiming 250,000 net new customers (I haven't seen the VHA figures yet but, despite their well publicised problems recently, I wouldn't mind betting they will claim an increase in new mobile customers) seem to indicate that Australians are heading towards 2 mobile services each - or that some or all the reported figures are highly suspect.
Were there REALLY well over a million 'new' mobile service customers in Australia over the last six months? That is something over a 10% net annual growth in mobile services in the last six month period - something that appears improbable but if it's true what does it mean for the immediate and medium term future? One thing it has meant in terms of Telstra's own figures is that they added a million more mobile customers and 160,000 new ADSL customers yet their total revenue for the period declined. If Telstra's revenues declined in those markets you have to wonder what is happening to the companies that compete with Telstra in those markets. Given the way mobile resellers fund their business you also have to wonder what effect Telstra 'winning back' 1,000,000 mobile customers means in terms of commissions that have to be repaid to Optus and Vodafone?
So, it seems to me, that the Australian communications industry is plunging ever deeper in to a period of "profitless prosperity" - where all the numbers of sales of the various products and services are all up side yet the revenues don't reflect those numbers and neither do the profits. I could be totally wrong but I am only using the numbers published by the companies that have published their half yearly reports so far.
You have to wonder why there is an apparent large increase in the number of companies that want to enter these markets at this particular time.
PS: Despite what the national government says the following article confirms what I and the people I talk to have been saying for some time - business conditions, at least in Sydney, are not good at all:
Copyright © Exetel Pty Ltd 2011
Monday, February 21. 2011
For several years now I have been reading about how "Cloud Computing" will revolutionise the world's industries. Over the past two years we have sent people to US conferences to get a better understanding of "Cloud Computing" and we have bought some servers and put in place budgets to establish a basis for trialling whatever we can find that passes for a "Cloud Computing" application. I read this article earlier this morning:
enticed by its 'tell all summary' head line but all I found were vague generalisations and unsubstantiated future claims......disappointing for a reputable writer in a reputable publication. To say that email is an example of "Cloud Computing" because the server is in a different location to the client is just plain stupefying in its inanity. I have asked everyone I have met (inside and outside the industry) who has raised the topic to explain what "Cloud Computing" is but, either because of my stupidity or their lack of ability to explain their thoughts/ideas, I have never found anyone who is able to describe anything other than using the internet to access applications and databases located in other locations which I, and the rest of the world, have been doing since at least 1995........at least as I understand what is being said.
As far as I can see MRPG users, Social Networking users, Exetel employees in Sri Lanka and in their homes around Australia all use "Cloud Computing" in that their client software accesses remote computer hardware, software and data bases to provide entertainment, personal relationships or their livelihoods and has been in place for a very long time - there is nothing new and certainly nothing revolutionary about such concepts - they/their precursors have been around and being crudely delivered since the late 1960s. Am I really so dumb that I cannot even begin to comprehend what I have read so widely about and had so many discussions about for so long? Or is "Cloud Computing" some latter day Andersoneque commercial con a la "The Emperor's New Clothes"?
When a not too junior executive of the world's largest computer company is quoted in the referenced article:
""Cloud computing represents a paradigm shift in how IT infrastructure and software are delivered and consumed," says Christian Klezl, vice president and cloud leader, for International Business Machines Corp. in Northeast Europe"
you would think that if a company as large as IBM has a dedicated group under a VP to progress it's interests in "Cloud Computing" it is real. But note the nonsensical nature and sheer nothingness of the statement itself (with its tell tale clue to its vapid nature by the inclusion of the give away words "paradigm shift" - always a certain sign that the speaker can't explain what he/she is saying). I may be being unfair in taking the single statement as all the person concerned had to say about the subject he was devoted to at this moment but "goodness me, Betsy, he sure sounds like one of them Eastern snake oil salesmen to me."...if that was culled from his reply as being the best quote. I have read many of the explanations that typing "cloud computing" in to Google produces but I am none the wiser. I have read many dozens (what an archaic word in a decimal world) of white papers and competently authored articles but am still none the wiser.
So, I would be very grateful to anyone who can point me to a source that defines exactly what "Cloud Computing" is and explains why it is of benefit to which sorts of users.
Copyright © Exetel Pty Ltd 2011
Sunday, February 20. 2011
.....is not evidence of absence - as the late and unlamented Donald Rumsfeld once tried to explain the failure to find WMD in Iraq to justify the unjustifiable US/UK invasion.There are too many aspects of the current scenarios in the Australian communications businesses that I have never understood for me to be able to state that these particular times are less comprehensible than at any time in the past but it would be possible to state that the bits I am personally involved with are very difficult to begin to understand at the moment.
In operating Exetel, and quite possibly many other businesses of Exetel's size, it is essential to have very short, short, medium, longer term and very long term plans. In this context I am defining very short as things to be done this week/today that will benefit the business, short as meeting the set targets for the current month, medium plans to meet the current quarter's target, longer term as meeting the current financial year's targets and very long term as preparing for an unknown future set of market and 'product' conditions while operating the business against targets as short term as today's.
Over the past two or so years it has been difficult enough to 'survive' as can be seen from the very large number of Australian 'communications companies' that now either no longer exist at all or have been swallowed up by other companies. Nothing really new about that situation, it's pretty much what happens in every year, but the sheer numbers are quite unusually large over that period. You could pretty much say that, apart from the companies that had an 'exit strategy' of selling out at the appropriate time, almost all of those companies failed to plan beyond the very short term and became overwhelmed by the significant changes that occurred....they were the blacksmiths of the 1920s. Or, put another way, they failed to comprehend that the absence of evidence (the affect of Telstra slashing prices/spending $1 billion to take away their customers yet) was not in fact evidence of absence (that the evil empire would one day strike back).
I, of course, have no idea of what the different Australian communications companies, large and small, are planning to do over the coming 2 - 5 years. But, I am assuming, that they will have to plan to do something(s) a lot different to the things they do today because so much will change between now and then. Now, you might say - quite rightly, "what's the difference between now and any time in the past?" Quite right - insightful forward planning is always required in any business at any time. However the demise of so many 'communications companies' in Australia over the past two or so years does seem to make this particular time a little different to the last two decades. The most obvious changes are that Telstra was 'privatised', the federal government is building a Telstra replacement monopoly and wireless is changing forever the way individuals communicate. Those three situations were more than enough to 'break' everything anyone once thought they knew about delivering the required communications services in Australia and the various 'models' by which that was done over the past 20 years.
Companies of Exetel's size have very little money, time or capabilities to plan for the longer term future but at least we tend to both see and act on what the more obvious scenarios might be and make decisions accordingly - whether they have been right or wrong is another matter. The major 'long term' decisions we have made over the past three years included deciding not to build our own DLSLAM network, investing in a Sri Lankan facility to sell as well as support our future efforts and putting a lot of effort into developing a wireless capability being the most obvious. There are several other things we have invested in for the long term such as building a corporate sales and support capability to 'ensure' we could absorb the loss of revenue and profits from the residential markets. Those decisions have cost us a great deal of money over the past three years and will only begin to deliver the planned benefits some time later this year - as with all long/most long term planning - you have to invest before you can get a dividend.
Before that can happen we, and many other companies, have to get through the coming year or so and that will depend on dealing effectively with this year's version of the Telstra 'Win Back Assaults' - of which an absence of current evidence in not evidence of an absence of malicious intent from an as yet unknown source.
Copyright © Exetel Pty Ltd 2011
Saturday, February 19. 2011
....which was 'over' before you realised it had started.
Of most interest, at least to me, was receiving six proposals for our IP, and in three cases, a portion of our carrier inter-connect circuits as well as our general inter-State links. Times are certainly continuing to change and change more rapidly than in the past. My memory is far from reliable but I think our first IP circuit was 10 mbps in February 2004. Since then the IP has been upgraded multiple times each year to it's current level of 8 gbps today with a further 2 gbps already on order and a complete revision planned to go to 12 gbps - 16 gbps by the end of this year currently in progress. The initial offer pricing from several possible suppliers is quite interesting and it will be equally interesting to see what the Exetel people conducting the discussions eventually come up with. For the first time since we started the company I am not in any way involved in these annual discussions which feels very strange.
The main reason for contemplating doubling our current IP is the increasing number of larger business sales our ever growing business sales teams are making. Over the past year there has been a steady increase in business customers buying 100 mbps links from Exetel and the first 200 mbps link was sold in January. The current 'prospect' list has several more 200 mbps companies on it and the first 500mbps and 1 gbps companies are showing, apparently, genuine interest in our IP and data service offerings. Of course all of the prospective customers we find for such services already have current suppliers and those suppliers are very, very anxious to retain that business - but they have the same problem with their IP customers as they do with their data link customers - they have been quite content to rip off their current customers by charging huge money for IP while the prices of international IP has fallen like a stone over the past three years. So if they charged 'today's' prices (let alone tomorrow's prices) to one of their current customers then the 'news' would spread to their other customers in a matter of days and they would be facing a serious financial dilemma.
There is a long way to go and a great deal of new thinking to be applied to the decision of just what we do in terms of inter-State back hauls as well as pure international and national IP but it seems to me that major changes will be necessary if Exetel is to continue to be competitive in the business marketplaces in which we currently operate and the new business market places we are thinking about entering. It will also be interesting to see the extent of the lies the drones who pass themselves off as communications consultants working for our competitors now lower themselves even further to say about Exetel. As our very largest (in terms of company size - a huge US multinational) business customer said this week "In the 18 months I have had your service there has been no downtime and no speed issues - I can't say that about my main link provided by an Australian "Tier One" provider which has had three lots of down time in the same period".
The other interesting 'event' that came very late in the week was a new approach from the Financial Director of a Singaporean company we briefly talked to three years ago when they expressed an interest in buying Exetel. He has now left that company and is working in his own M and A consultancy. He wrote to us saying he was working for a company that wanted to acquire a company in Australia and if Exetel was interested in selling he would arrange a meeting to determine whether it was sensible to seriously discuss such a proposition. That is the third 'semi-real' approach Exetel has had (ignoring the half dozen or so the 'non-real approaches') we have had in the past six months - something seems to be happening that I don't know about - but then I suppose that is true of my general lack of understanding of most things for the whole of my business and personal lives.
Whenever we have such approaches I have always maintained that any approach from an established Australian ISP/Comms company would never be successful because our infrastructure/PoPs would be regarded as of no interest/value whereas a new company entering Australia would regard them as highly valuable if not integral to the purchase. While I doubt the latest approach will result in anything at least it makes more sense than selling out to a current Australian ISP; assuming we could bring ourselves to ever do such a thing.
Copyright © Exetel Pty Ltd 2011
Friday, February 18. 2011
.....a great win against the barbarians:
Congratulations to the Sea Shepherd people and all who supported them.
Friday, February 18. 2011
.....if it could be made to work effectively in a commercial environment.
I don't know whether you have been following the Watson vs humans Jeopardy TV event in the USA which ended last night:
but it illustrates what computers can do in terms of artificial intelligence. certainly it took a gigantic amount of research money and an equally large amount of computing power to achieve such a result but there can be no doubt that it is possible for computers do outperform the very best humans in areas that require established knowledge rather than 'original' thinking.
As you may know Exetel has been looking at ways to use AI to improve our support facilities for well over five years now. We have made very little progress using our own resources and some two years ago we provided funding to SLIT in Colombo to provide the personnel via an assistant professorship to progress this investigation more sensibly. Obviously a company of Exetel's size cannot begin to make the financial and other commitments a gigantic company like IBM can - and we obviously had no such ambitions.
However the project we are funding is making some practical progress and we expect to begin testing the first phase later this month. Our goal was/is to remove the 'drudgery' from support people's job by providing a machine to answer the many repetitive questions they get asked each day and thereby remove the boredom that induces and therefore make the job more enjoyable and also much more rewarding. How many times would anyone like to answer questions like "where do I find the user facilities" or "where do I find my invoice" or endless similar questions before hurling their computer across the room?
It is going to be a very long time before we get something sensible put in place (five plus years and counting to date) but the 'Watson' results confirm that it's more than possible. I saw the current progress that had been made while I was in Colombo in January this year and was impressed that what I saw was so much better than where our own efforts had reached when we handed over the project to people infinitely more skilled and knowledgeable than we were. I think that it will be able to provide sensible answers over the remainder of this year and I will be interested in how much progress will be made over that time.
As part of our tiny commitment to making life more rewarding for the millions of employees in call centres around the world we committed to making any code developed 'open source' and, for whatever that becomes worth, we will also make our q and a data base for the 'engine' available as 'open source'. Perhaps, if there is any general value in the work being undertaken, other similar companies will contribute to developing the data base and we will benefit from there efforts.
Copyright © Exetel Pty Ltd 2011
Thursday, February 17. 2011
As I have previously written, almost from the day I started writing this blog, we have been looking for a 'magic box' that combines standard ADSL router/modem/wifi functions with a sim slot and one or two ATAs. In the three plus years we have been looking for such a box we have found almost what we want on a few occasions but never exactly what we want - and certainly never at the price we wanted. Over the last six months we have got much closer to the exact specifications but have never got close to our required buy price. New information received this week seems to indicate that such a box may now becoming available but the price is still an issue.
We have begun our planned activities to sell business services to small businesses and will polish those plans as we progress. Our basis for offering these services to the theoretical 1,000,000 'SME' operations around Australia would be significantly enhanced if we had the 'magic box' today but as we don't we have to proceed without it. We are basing the 'SME' service on a residential grade ADSL2 service with wireless broadband back up plus VoIP calling and the related savings with PSTN back up. We will also be offering 1 - 5 hours of, highly qualified, technical support per month to assist these small businesses set up and maintain their Email, Web Site and other back end services as well as providing technical support for issues relating to the SME's wifi set ups for additional computers and trouble shooting any other 'computer' problems they encounter.
From what we have learned from the 5,000 or so SMEs we already provide services to their main decision making criterion is 100% availability of the internet service which can only be possible by having two, running on different infrastructures, services. The easiest, and by far the lowest cost, method of providing 100% availability is a wireless broadband back up service at a low monthly cost with a pay per use basis of charging. With a 'magic box' this can be provided via auto fail over but even without a magic box it can be implemented within a few seconds. So every SME really needs to consider how best to implement a back up internet service and the answer is, except where wireless cannot be obtained, a wireless service. Luckily Exetel has spent three years putting low cost but highly reliable wireless services in place.
A major saving for any small business is to use VoIP (with PSTN as a back up) and VoIP services are now much easier to install and use than they have been at any time in the past. Again, a 'magic box with ATA capability would be the ideal solution with the customer just plugging in their current hand set and the 'box' selecting VoIP as the preferred service but defaulting to PSTN if the internet connection is not available. All inbound calls would be via PSTN and no number change would be required - an essential for an SME. Retaining the PSTN line would be essential for an SME both for back up and continuity of number.
The provision of sending/receiving faxes and sending receiving SMS to/from the customer's desk top or lap top computers would be a minor plus - but nevertheless a nice facility to have especially allowing incoming faxes to be sent to different individual's own computers by giving each employee a different 'fax number'. Similarly including fully supported web site and email hosting would be a bonus for many SMEs and would save quite considerably on 'consulting charges' when changes need to be made or something 'goes wrong'.
My view is that the icing on the cake and the major difference between what Exetel provides and what every other company provides, subject to seeing what actually happens, is that Exetel's SME service includes a number of one on one support hours each month to deal with any problems that arise with any of the services and their operability within the SME's organisation. The thought of Telstra or Optus even considering offering such support is beyond comprehension. But, and this is the key issue, SME's actually need such support far more often than they need line fault fixing or similar carrier responsibility issues. It will be an interesting 'sell' but if we can get it right it will be, and remain until the end of time, a unique 'must have'. Which as any sales person knows is the key to 100% sales success.
So...if only we could deliver a 'magic box' today everything would be in place.
Copyright © Exetel Pty Ltd 2011
PS: Your tax dollars at work - My goodness those 'NBN2' people are great commercial negotiators!
Wednesday, February 16. 2011
Telstra's announcement yesterday that it would deliver 'live' LTE services to a significant area of Australia before the end of this year widely reported from many sources yesterday including this one:
again underlines how fast technologies change and increase capacities and decrease end user pricing - either via well publicised joint development plans (in the current case of mobile standards):
or by predictable developments by industry leading companies (like Intel and AMD in the case of processor technologies). The technology industries are totally different in this way to rust belt industries like automobiles, passenger aircraft or industrial machinery generally.
The knee jerk response from Stupid Stephen ("nothing will ever change the 'fact' that wireless is completely irrelevant to the back of the bus ticket planned 'NBN2')" is as typical as it is stupid of any statement he ever makes. Wireless broadband technology in on a well defined development path that it has been following for over thirty years and is planned out into the future for another ten years. Not only has it been planned into the future but since the very start of the GSM standard it has consistently hit its implementation targets. Stupid Stephen, because of his own stupidity and Krudd's giant ego, has been forced to maintain his Red Queen impression ever since the collapse of Krudd's initial 'NBN1' craziness - he has to continue to deny that the rest of the world's carriers (plus Telstra and Optus) continue to heavily invest in wireless broadband and continue to deliver sensible data/voice delivery services using the ever improving wireless technologies....that will continue to improve into a, planned, future.
Because Krudd, Stupid Stephen and now Ms Faustus had never had a real job in their lives (two union thugs and a public service dilettante), and whose knowledge of the commercial world is zero they have no ability to understand the two simple imperatives of commercial life......efficiency and lower costs always win over inefficiency and higher costs. They are embarked on a program equivalent to an 1840 version of planting acorns to build sailing ships in fifty years time while Telstra and Optus are mining iron ore to build steam ships. Wireless needs no "last mile" digging of trenches (and the subsequent constant maintenance) which is a very significant proportion of the cost in delivering a data service by land line. So the 'NBN2' is being built based on early 20th century 'technology' that carries with it the burdens of early 20th century delivery mechanisms. Only a complete prat would make such a decision and not even a complete prat with any understanding of technology and commercial advantage would make such a truly mind blowingly stupid decision.
So, back in the real world, Telstra's inherent advantage of delivering LTE via its unused 1800 spectrum by the end of 2011 to something like 85% of the current ADSL customer base will begin to more obviously define what sort of percentage of current users will adopt a wireless only approach to their data needs and get rid of any form of PSTN/other fixed wire service as an added bonus to put that unnecessary $30+ a month to better use. With the current percentage of no wire line service at around 15% there is only a small margin for Stupid Stephen's requirement of 70% (down from his previous 95%) of current users of ADSL to use the 'NBN2' required to make it profitable - eventually. With Telstra's LTE offering becoming available to a large percentage of current ADSL users before the 'NBN2' is available to more than a tiny percentage of Australian users the number of no wire line homes will rapidly accelerate - assuming Telstra price it sensibly - and there may well be less than 70% of Australian residences available to the 'NBN2' by the time they get around to providing the service.....it is possible there will be far less than that.....and getting fewer each month as LTE/4G gets faster and faster and cheaper and cheaper. (with no expensive 19th century trenches and wires to maintain)
Not that it matters at this moment in time but it is just yet one more example of why you NEVER let a bunch of political nitwits anywhere near decisions that have long time frames - let alone the current bunch of pig ignorant, incompetent, self serving fools....."lets build a network for the 21st Century based on 19th century delivery mechanisms".
Copyright © Exetel Pty Ltd 2011
Tuesday, February 15. 2011
The second month of the new calendar year is now halfway through and both Telstra and Optus have published their half year results though neither provided understandable figures concerning the extent of their successes or failures in the ADSL marketplaces. Telstra's claim of gaining 1,000,000 new customers was a very clear indication that their 'customer win back' strategy spending had produced some sort of result but they were surprisingly 'coy' in not providing any, at least that I could see, specific breakdown of the product gain by type of service - it all seemed to be, from what was published, "mobile and mobile broadband" but with some significant ADSL gains - unspecified.
A major problem we continually face is that all the carriers we deal with are always happy to talk about 'promotions' to increase sales numbers in any given month but always, because the way they are measured, base these promotions on net new customers (i.e. new customers signed up to the carrier's service minus customers who transfer to another service during that month). This is a more than reasonable attitude/basis but it constantly 'annoys' current customers who see 'new' customers getting 'better deals' than they do. In the past we have dealt with this 'restriction' by taking the financial accommodations offered and spreading them over the whole of the customer base for that service which results in significantly diluting the benefits to new customers and falsely lowering the price to 'old' customers which, over time, creates a major cost problem.
Over the past two years this situation has been massively exacerbated by Telstra Retail's "win back" promotions where not only are they able to offer plan prices lower than the wholesale pricing to Exetel but they offer $200 plus 'cash backs' as well as zero churn costs. So if Exetel offers a 'promotional' price for a plan to 'new' customers but cannot offer that to 'old' customers and then some back packer knocks on the door of the Exetel customer offering a better monthly price and a 'fistful of dollars' from Telstra to move away it is unsurprising that many thousands of Exetel customers decided Telstra was a better provider than we were. That's business life and all that can be done is accept that small companies can never rely on anything staying the same and try and constantly innovate and move in directions that large companies can't duplicate....a very draining way of spending day after day after day.
So we have yet to find a way of using the latest round of 'carrier promotional bonuses' that are based on net adds of new customers in ways that achieve some sort of positive results for Exetel, meet the carrier requirements and do not annoy our current customers. This is proving impossible to do so far and we are not getting anywhere in framing these possible new promotions in any way that will meet even two out of three of these requirements. We will tentatively try out a new Telstra ADSL2 plan (TCV200) which is priced at $50 a month with no peak/off peak but with 200 gb of included downloads (uploads remain uncharged). This can only be done because of the promotional assistance offered if we sign our lives away to producing very difficult sign up numbers - which I have serious doubts about. Such pricing will also undoubtedly annoy our current Telstra ADSL2 customers but there is nothing we can do about that at the moment. Such pricing is also not available to 'regional' customers as it is restricted to what Telstra define as "Region One".
We could get that ADSL2 price down to $40.00 or even $35.00 if a customer also signed up for an Exetel/Optus mobile capped plan service. Then again a wireless broadband user can get a 5 gbps service for free or even for $5.00 cash back if they also buy the new Exetel/Optus wireless broadband plan or ditch their PSTN line....now that makes for an interesting piece of marketing.
So, damned if you do/damned if you don't, if business life was meant to be any other way for smaller businesses then there would be far fewer larger businesses.
Copyright © Exetel Pty Ltd 2011
PS: More indications of the problems wireless broadband will cause for the Labor Government:
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