John Linton
I had a meeting yesterday with someone I've known for a while and done business with in 'previous lives' and currently do business with in the mobile part of Exetel's business. Our face to face meetings are sporadic partly because he is based in Melbourne and partly because I have formed the view that face to face meetings are a waste of time for the person(s) who has/have to take time to travel to them and both parties in terms of too much time taken with politeness and protocol compared to an internet/email exchange.
However every six months or so isn't too much of a time burden and sometimes an 'open ended/no agenda' meeting can be productive - as indeed this one might turn out to be.
We discussed how/if we could work together, and possibly with one other party, to share the costs of setting up and operating a mobile gateway to deliver data and telephone services over one of the major mobile networks. He already has reasonable mobile minute volumes as he acts as an aggregator for companies like Exetel in lowering our per minute pricing from Vodafone and he has an associate who is larger in the same business. Neither of them have any experience or infrastructure in delivering data but Exetel has a great deal of that.
Exetel has started offering SMS to our DSL customers via their data connection and we expect that business to grow rapidly and we have offered mobile services for over two years and are always looking for ways to increase that business. As I've previously alluded to - the current Optus/Virgin data/mobile/wireline offer is very attractive and there will be a succession of even better offers over the coming months from Optus' competitors.
Having resisted the temptation to install ADSL2 DSLAMs ourselves (based on my view that it was a "sun set" technology on which the sun had already set) it has always been obvious that Exetel needed to somehow get away from relying on paying TW or OW (or anyone else) for the basic connections to a customer. With wire line based services that was never going to be possible for Exetel.
However with 3G it's more than possible and while the up front investment is significant it's not much larger than the proposed ADSL2 roll out we briefly considered. So we have decided to take a serious look at getting a data over mobile service in place based on our own gateways to a major 3G (4G) provider's network and look to putting that in place within the next 18 months.
We will proceed with the resale of the current Three mobile data service and would consider Three as a gateway partner if they moved to offer true wholesale services and we will begin discussions with other current suppliers on the same basis. We will also, as rapidly as possible, add to the SMS functions we have just begun to offer to ensure that we know exactly how to deliver what various different sections of the Australian market require and to build our volumes as rapidly as possible in that service.
This was always going to be a very difficult 12 month period in both Exetel's young corporate 'life' and the communications market in general but it has every indication of being far more difficult than I thought it was going to be.