Wednesday, May 20. 2009The Telecommunications Industry - Recession Proof?....John Linton .....not quite as recession proof as it used to be perhaps. I read this earlier today: http://news.yahoo.com/s/nm/20090514/bs_nm/us_bt_results which effectively reports on the quarterly loss made by British Telecom which used to be the monopoly national carrier in the UK. It isn't the fact that even a recently 'ex' national carrier in a huge market (compared to Australia's) can make a loss in tough times (caused by a valuation write down) but the casual way the article deals with the fact that BT has recently eliminated 15,000 jobs and now plans to eliminate a further 15,000 over the coming twelve months which, if I'm reading the figures correctly is around 15% of its original employee starting point which had previously been 'downsized' over ten percent prior to the latest round of 15% cuts. So it's obviously possible for a national momopoly to staff itself with 25% more personnel than it needs and still make a gigantic profit. I guess that simply confirms what is always said about monopolies being the most inefficient way of delivering anything to anybody. However inefficiency in a factor of both monopolies and every 'size/power' level from start up to 'second largest' in any area of endeavour and is not the sole prerogative of monopolies. My, personal, view is that inefficiency and flabby personnel structures exist in every sized organisation except in, perhaps some percentage of those that are owned and operated by someone who funds their own business and is closely enough involved with all areas of it to not allow 'flabbiness' to creep into it. I could be quite wrong but I have never seen any other explanation of how small companies operate leanly and effectively for some years and then, almost in a blink of an eye, double their personnel without seeing any parallel in business volume growth. I am very conscious of this tendency in small companies as I am heavily involved in one and see all the signs I referred to above. Some consultants refer to this phenomenon by a range of fancy names and describe it as an inevitability in the life of almost every commercial entity that has ever survived beyond a few years. At Exetel, being aware of this inevitability, we have always measured our business by some efficiency factors such as revenue per employee, revenue per salary dollar, number of customers per salary dollar split over sales, support and administration. Measured in those terms we have maintained the Australian company's efficiency for over 5 years - slightly improving it from year to year and now achieving levels that are, as far as I can tell, superior to most measures of 'world's best practice' (which I actually think means 'USA best practice') Using such efficiency factors allows a sensible manager to detect very early whether, as they grow, efficiency is being lost or, obviously in rare circumstances, being gained. I was always very concerned when we decided to move much of our back office functions to another country with only sparse contact with the 'mother' company that along with an instant loss of knowledge that would, inevitably, be involved, the more important basic 'ethos' of whatever it was that made Exetel successful would be lost and therefore along with the loss of ethos would be the loss of the efficiencies and advantages that had made Exetel Australia whatever it is today. Now the more cynical (or rational as I'm sure they would prefer to describe themselves) of people might well suggest that small companies such as Exetel delude themselves if they actually believe they are 'special' in any way and that a few years of operations in a start up mode are incapable of producing anything as ephemeral as an ethos or company culture. Such people could well be correct. My view is that Exetel has been built along very unusual lines (which are very rare in commercial enterprises) and the underlying methods of operation have been the reasons we have survived and grown when virtually every other communications company (I actually think EVERY other communications company but my knowledge is not universal) that started up since 2003 now no longer exists at all. So I am of the opinion that there are actually 5 very different things that Exetel does that are very important to our continued survival, let alone growth and those things were missing from the 500 or so communications companies that started up and then disappeared over the past six years. I am very conscious of this scenario after only two days in Colombo where our Colombo company has grown from 1 person to 24 people in 10 months (something it took Exetel Australia three and a half years to accomplish). While I see much that is admirable and I have no real complaints or misgivings about virtually any aspect of the Sri Lankan company (and I think the people are exceptionally good at their jobs and are also very nice individuals) I also see very little that is "Exetel" and much more that is what I have never particularly liked about commercial enterprises generally. Of course that was always going to be the case and I suppose I always knew that it would be the case and I'm not, for one moment, expressing disappointment or any other negative view. What I am finding is that it would be very simple and probably take no time at all for Exetel in Australia to change from the things that, in my opinion, have made it whatever it is today to something quite different and quite likely to become quite unsuccessful over a not very long period of time. So these few days, have already, taught me a great deal about what not to do both here and in Australia when I return next week end. One of the first things here is that I am going to put in the same 'efficiency' measures in SL that we use in the Australian company. There, almost certainly, never will be a "Sri Lankan Exetel" - the challenge will be to build something quite different but hopefully as good in it's own different ways as I think Exetel is in Australia. I now have a better understanding of what makes that happen. PS: The civil war in Sri Lanka was 'offially' declared over today and the following summary may be of interest. Personally, I find it biased, but not as just plain untrue as most comments on this terrible situation: http://online.wsj.com/article/SB124276225317535897.html
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The adage "If it works, don't fix it!" obviously applies to Exetel.
You and your staff are obviously cautious, but if the company continues to grow, even at a slow pace. Then you can't be doing too much wrong. It's refreshing to see (from where I'm sitting anyway) that Exetel is not a "greedy" company. That can only be good for business and public perception. Comments (2)
Hi John,
This is off-topic, however I don't think you will mind! Here is a link to Alan Kohler's daily comment page. http://www.businessspectator.com.au/bs.nsf/Article/Telstras-costly-mistake-pd20090520-S7SL4?OpenDocument&src=kgb Seems he can read your mind! Enjoy. Comments (2)
Re: Sri Lankan conflict, there are reports of mobs stoning british consulate, burning effigies, placards with "Hands off Sri Lanka, we're not a colony" and calling the Foreign Secretary a "White Tiger".... hopefully this sort of hysteria is shortlived, that there will be no mood for cleansing of white colonialism. I'd like to think that the exetel operation is the very model of equitable co-development of a trans-national, trans-cultural enterprise, that working for exetel is a prized position. This question of ethics doesn't need commenting on, indeed actions speak louder.
My real motive for posting here, on the boss' blog, is to get some authoritative indication of the likely exetel service proposition in an unusual context which i don't expect the normal desk staff to have guidance at their fingertips. The situation is: I'm putting forward the "Exetel ADSL2 for LIGHT Users", PAYUDSL2, as the ideal bandwidth provision solution for our church's mission to do live webcasts of our sunday morning, (10 hours east timezone), service. Thus, it's the upload speed from the in-church-connection to the publishing-to-client service (think ustream.tv) that will define the (video continuity/framerate) quality of the service. Our tests to date have been via 3/telstra wireless, and it works, albeit with pixelation, so we need something a bit better. My exetel home service speedtest, on the same exchange, is reported as better than average, clocking just sub 500 upload, it should be a go-er The thing is, the unusual bit, the service will only be used once a week, about a gig goes up each time, (the highly compressed live stream, and a better quality ftp to archive), and there really isn't much of a requirement for downloads at all, just someone monitoring the stream as a dummy client for QC. According to the PAYUDSL2 spec sheet, uploads are not charged, perfect for us. So on the face of it, we'll be up for about $50/mth, given that the service is over before midday, (off peak 20c/gb even if our 5 gb/mth uploads count). Does that sound right? Our worry is that the up/down pattern will look to your policy software like a P2P file sharing session and we'll get shaped, which is no good to us. Other isps policy would be to charge for the uploads, being the greater, not the downloads. Are you/exetel happy to have a client who uploads more than their skeletal downloads, on sundays, driven by litle old ladies? Cheers, and thanks. Comments (2)
Streaming video won't be mistaken for P2P.
Our plan prices are fine based on the way we set the charging - it doesn't matter to us if you download zero and upload lots. Comment (1)
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