Wednesday, April 15. 2009ADSL1 Just Doesn't "Go Away"John Linton I watched throughout February and the first half of March ADSL1 new/churn orders continuing their slow decline which I thought was the inevitable result of Telstra's ADSL2 offerings in more and more exchanges together with the efforts of those ISPs who had signed up to re-sell the Telstra ADSL2 service - plus the fact that I wouldn't expect anyone on an exchange where they could get ADSL2 to sign up for ADSL1 (not because of any speed difference but because of the lower price of an ADSL2 service.Our overall 'plans' are currently based on ADSL1 services continuing to decline as a percentage of total services to around 30% of ADSL services by the end of calendar 2009 and to less than 10% at the end of calendar 2010. Over the past two years these predictions have been pretty much in line with what has been seen on our own customer base and in line with the general comments by other people in the industry I talk with now and again. So it's been a little puzzling to me, a person who is often puzzled by events in Australian communications, to see the trend of well over two years 'reverse itself' in around mid March and by early April see new/churn ADSL1 orders getting close to total new/churn ADSL2 orders and yesterday (a record 2009 order day - partly due to being the first working day after the Easter long weekend) actually exceed the number of ADSL2 orders received for most of the day. When this began to happen I put it down to a slight aberration that is always likely to happen in any statistical examination of rough trends that 'suffer' from multiple stimuli but as it continued i have begun to wonder whether it is something more serious. As we are preparing to again offer ADSL1 services in Tasmania this 'trend' is welcome as we don't, at least as yet, have an ADSL2 solution for Tasmanian users though we are getting much closer to making that decision. I have tried to understand what has happened, and I realise that Exetel's tiny volumes aren't sufficient to believe there may be a general trend, and to guess at what we are now seeing will continue in to at least the medium term future. Personally I can see no reason for it at all especially when I do a rough analysis of the exchange codes the new order volumes come from and see no discernible pattern such as "mostly from non-ADSL2 exchanges" as logic would suggest. In fact the largest 'ingress' of ADSL1 orders are from three exchanges that have multiple ISP's ADSL2 DSLAMs. It certainly isn't because we have put in place more attractive ADSL1 plans - they haven't changed in basics for several months though the schedule of small changes and added benefits have been the same as for the ADSL2 plans over the first quarter of 2009. It also isn't because ADSL1 orders are 'cannibalising' ADSL2 orders which are steadily growing month on month. So there is nothing that I can determine other than the increase in the percentage of 'churn' versus 'new' ADSL1 orders - though I can ascribe no meaning to that other than the usual two main sources of churns to Exetel continue to increase their percentage of total churns. We were going to discontinue offering the 512/128 services to new customers by the end of April but we may need to re-think that now as there is a 'surge' in that speed as a percentage of total ADSL1 orders received where before there was a noticeable decline (we stopped offering 256/64 speeds almost a year ago and it crossed my mind that it might be interesting to re-offer that speed for a time to see if there actually is any current interest). Perhaps being a small company we feel the small 'bumps' in the road more easily than much larger companies with obviously much, much lager daily order inflows and this strange situation will return to 'normal' over the next week or so. One, too small to really call a trend yet but now quite evident, piece of data is the number of 'new' ADSL1 customers that are 'transferring' from other ISP's ADSL2 services back to ADSL1 with Exetel (and I can only assume that is happening to other ISPs). Now that is a circumstance for which I can't think of any explanation at all (price/download allowances/bundled telephone). This 'almost a trend' is happening on some exchanges where Exetel has ADSL2 so it isn't a question of these customers becoming disillusioned with their current ADSL2 ISP and being forced to move back to ADSL1 because there is no choice. Those situations truly defy understanding. I can't think of any situation where a customer would prefer a slower AND a more expensive service when presented with such a choice. So a bit of a puzzle. ADSL2 is now around 40% of total ADSL users and has been growing as a percentage of total ADSL users at a rate of around 1% a month - but that won't happen this month. What, if anything, it means for the near or medium term future is completely beyond me to work out but we obviously need to do some much better analysis. However, my view is that, even if we actually invested the time in doing such a detailed analysis we would get a set of figures but would still have no idea of why those customers made such decisions which is what we reallly need to know. In the mean time any plans we had for running down our ADSL1 business have been thwarted by 'market forces'. Trackbacks
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"...Now that is a circumstance for which I can't think of any explanation at all..."
You often seem to ponder about people's thought processes when they apply - have you put any thought into somehow harvesting this information? What about adding a text box in the sign up form, in the "Please tell us how you heard about Exetel" section, where people can optionally leave a comment on why they have chosen Exetel or that particular plan. I'm not sure if people would make use of it, but if they do, it might provide you with an interesting insight into people's thought processes. Comment (1)
Have you ever averaged out the ratio of complaints to connections (Optus ADSL2+ vs. Telstra ADSL1)?
I suspect the Telstra ADSL1 one's to be much lower/less problematic. Certainly from my own experience that is the case. However I must say Optus have certainly improved their game since those horrid backhaul issues a few years ago. T. Comment (1)
The complaints per service are about one fifth for ADSL1 vs ADSL2.
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If the goal is to move as many customers as possible toward ADSL2+-based services, perhaps you could modify your SQ tool so that it lists the offerings available on a given phone number side-by side.
Perhaps not in complete detail, but something like: ADSL1 - up to 8000/384 starting from $X /month - ADSL2+ - up to 20000/800 starting from $Y month Comment (1)
I always understood serious gamers preferred ADSL1 over ADSL2 due to the lower latency, the added delay due to interleaving on an ADSL2 connection apparently is enough to cause a problem
only what I read though as I don't play games so not sure how correct this is or if it has anything to do with the trend you are seeing but plausible perhaps Comment (1)
I've had a number of country people who said they weren't interested in changing from Testra, (the old fear that it wouldn't be reliable if it wasn't Teatra) show interest again. A number have signed up and the word of mouth seems to be helping.
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If/when you do remove 512/128 can you PLEASE offer a 6Gb peak 1500/256 plan (for $45). $50 as an entry level (other than PAYU) is simply too high. Every plan/speed/type has 6Gb as the entry level except for 1500 & 8192.
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I second this. I'm on TELH and use about 2.5 GB total a month. I may switch to TL-BA this month which is some $10 more expensive but I'm fortunate to get a partial reimbursment for internet from my employer; the included VoIP calls with the plan means I can switch my VoIP from MNF and save some money overall. I just don't need a 12GB plan and I can't order PAYU/1500 from the members area. Actually, I'd probably not order PAYU; not unless I lose my job.
Back to the ADSL1 blog, I don't like paying $20 odd a month to Telstra but it's piece of mind. There's no argument in my mind that ADSL1 via Telstra is reliable and you can get service if you ever need it with less hassle than another provider and churning is an easier process compared to what one can face with ADSL2 etc. And with free churns, value plans and useful add-ons/features it no suprise customers are switching. I've said it before, I think you need to survey your customers; a dozen or so targetted questions might just gain you some further valueable insight. Comment (1)
I would definitely get an Optus ADSL2 connection if I could.
There are a lot of exchanges out there that do not have Optus equipment. You have access to their phone numbers and addresses, maybe you should prompt them to sign up with an ADSL2 connection of similar value when they order an ADSL1 connection. It is possible, as your demographic continues to widen to more of the Joe Sixpack market, that people just aren't looking at ADSL2 because they don't think they need to make the upgrade (and they think that because there is a '2' in it, it will be more expensive). It could be as simple as your ADSL services appearing before the ADSL2 services on the website cause people to choose these first. Maybe they just don't want the downtime as their port is switched. You could always re-brand to only offer ADSL services and maybe 'Legacy' ADSL services for those people on Telstra exchanges. Or maybe just one set of ADSL plans where those people that can't get on an Optus DSLAM end up with a lower per-month allowance (similar to how iiNet ran (runs?) their business). Comment (1)
Perhaps it is a desire to separate telephony from internet? If I understand Exetel's plans correctly, one can only have ADSL2 without telephone on a PowerTel exchange.
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Do you think it may have something today with the contract period? I recently shifted house and was unsure whether I would be there for more than a year and the ADSL1 option was therefore more attractive than ADSL2. I ended up going with HSPA, but due to somewhat unreliable connectivity may still switch to ADSL1. I haven't looked but perhaps your competitors provide longer ADSL1 contracts or have recently made a change to this condition?
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i looked at how many ports are avalaible on the medowie [mdwi] exchange -- 842- adsl2+ and only 1 adsl1 -- looks like telstra has figured out another way to dud isps that dont resell adsl2+.
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Perhaps some of these customers only have ADSL1 modems and incorrectly believe that their modem will only operate on ADSL1 equipment? Just a thought...
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Dudley exchange only has Telstra ADSL2. I wouldn't dream of using a TW ADSL2 connection. ADSL1 is just a necessary evil. The day optus (or some other carrier) puts ADSL2 gear in the exchange is the day I move to ADSL2. I get 4Mb or so on the ADSL1 connection anyway - dont have any reason to change Carriers to get ADSL2.
However, I think a good idea from your point of view is to keep an eye on where Optus is rolling out ADSL2 gear, and as exchanges become live, mass mailing all ADSL1 users on the exchange, giving them a heads up. I would certainly appreciate it anyway. Comment (1)
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