Sunday, March 9. 2008Time To Change ADSL Offerings?John Linton Exetel hasn't changed its plans/prices for over a year now with the exception of some minor included peak time quota changes and the gradual increase of the off peak download allowance from 36 gb to 48 gb and the extention of the off peak period to a full 12 hours a day each day of the month. We have added 20 free SMS, low cost fax and increased the free web space allowance but these 'add ons' don't affect the basic plans. So I spent some time yesterday trying to determine what could be done (no reductions in Telstra, Optus or Powertel port/back haul prices have occurred as yet) so any 'reduction in prices would have to come from already paper thin profit margins - typically Exetel makes around $1.50 per month from its ADSL services which usually results in a 'break even' result (allowing for all the things that 'go wrong' in any given month) from going to all of the expense, effort and heartache of providing ADSL to the Australian marketplaces we currently service. With the not too distant contract end dates for our premises, IP traffic, GigE links and several other less expensive monthly costs now could be a good time to decide to get out of the ADSL business completely over the coming 12 to 18 months. It makes a lot of sense to seriously consider that option as the other 9 services offered by Exetel are now of sufficient size to provide a good, and growing income, and all deliver realistic profit levels with minimal infrastructure and support costs. I spent much of the 'small hours' of this morning (courtesy of very painful knee ailment) watching Manchester and Chelsea lose their respective FA cup matches while mulling this over. It has a lot to commend it and would provide a significant profit increase while it was happening as the best way of accomplishing it would be to increase all current plan prices by $5.00, $7.50 and $10.00 (depending on current monthly charges) which would immediately generate an additional $A300,000 profit a month - which would be a pleasant bonus for the past four years incredibly difficult and unbelievably demanding efforts. However as first Chelsea and then Manchester lost their respective games (which perversely cheered me up immensely after Arsenal's dismal performance in the previous round) and the extreme pain I was suffering from which had made it impossible for me to sleep eased losing its fight with the 4 Neurophins, I started looking at the other concept of producing lower cost plans. This is, obviously, much more difficult to do and after some consideration I came back to the conclusion I have always come to when trying to find ways of reducing plan costs in the absence of carrier cost reductions - it could only be done by devising plans that suit completely different sectors of the market than the current Exetel customer bases. I had begun to devise lower cost plans based on 'bundling' low cost mobile minutes and low cost telephone calls/VoIP calls and equipment which were beginning to make some sense when my mind followed my left knee's pain in being overcome by the Neurophin assault and I fell asleep. This morning, over breakfast, I looked at the notes I had been making, at least the ones I could decipher, and there are some germs of good ideas in those 'drug influenced' thoughts. One of the concepts that, drug induced or not, appeals to me immensely as all simple ideas always do. That was the one plan fits all concept of: 1) Base monthly charge - $30.00 It needs more work but it may well be something that can produce a real result. The problem with ADSL,for a small company like Exetel, is that the margins achievable have never been very good even 4 years ago before the current intense price oriented campaigns put in place by Telstra.With Telstra and Optus trying to beat each other as to which company can give away the most. It's not clear to me any more why Exetel should offer ADSL services as part of a financially sensible business plan going forward. Trackbacks
Trackback specific URI for this entry
No Trackbacks
Comments
Display comments as
(Linear | Threaded)
John,
I would find that plan very attractive. Except for item 6 as I've already got VoIP capable hardware. cheers, Peter Comment (1)
I also find it attractive.
... but as I also already have modem and ATA, etc..... a reduction in the Activation Charge? ... Activation Charge with churn? .. any thought of also including a phone line? Regards, Harry. Comment (1)
There are a lot of things to consider - if no equipment is provided then the activation cost can be reduced as an example.
As far as I can see the Telstra $20.00 a month phone line is still the lowest cost anwhere in Australia. Comments (5)
Hello John,
I must compliment you on your blog. You provide good insights into the telecommunications industry of this great nation, and you keep all Exetel customers updated on present and possible future endeavours. I think you may need to keep taking those pain tablets as they are causing you to come up with some good ideas... well at least the one you have presented to us. The idea of a VoIP/mobile/ADSL bundle is a good idea, which would appeal to a lot of people. Just two thoughts though: - I am by no means a big downloader, but the idea of being without the free off-peak quota would make me feel naked. I would feel a lot safer if say 4-10GB of off-peak 'credits' were provided during a free period of perhaps 1am (to avoid the midnight rush) to 8am, or something. - If there was a free period perhaps let people buy gigabytes for during that period at a slightly discounted rate. It would help move traffic to a time when the network isn't as busy. I may be fussy, or not even the type of customer you are aiming for with this offer. In any case, I wish you luck creating the best bundle deal of the decade. Regards, Stu Comment (1)
It's plan concept at the moment aimed at replacing all the 256/64 and 512/128 ADSL1 plans and it's not aimed at current Exetel users who have selected Exetel for the 48gb off peak and high peak download plans - which will remain as we are cofortable with that marketplace.
Perhaps we could add a download allowance in off peak but that sort of distorts the aim of this tpye of market - or at least what I perceive it to be. Comments (5)
I would like to see an update in plans, especially ADSL2+ via Optus. I would also like to see capping plans, maybe it's a bit hard in its relation on how the Exetel network functions, but it's just a suggestion. Due to the appearance of the new Pipe link that’s going to be ready for activation in June/July, I suggest you wait until then because the whole competition is going to change their pricing tables due to the lower costs on bandwidth. But it would be great to see an update in plans.
Comment (1)
From what I know - the new PIPE cable is not due for activation until mid - late next year.
Comments (5)
Just remember who your core market is and why you "other 9 services offered by Exetel" are so popular.
Without the ADSL customers would they be sufficiently large to be profitable??? Comment (1)
What you say is very true - but, as you may recall, blacksmith's once only shod horses before becoming service stations.
Comments (5)
What about some other value added services such as a spam filter?
I'd be willing to pay a few extra dollars to reduce the amount of spam I receive. Comment (1)
You can get SPAM/Virus filtering on your Exetel accounts for $2.00 per account - available in the User Facilities
Comments (5)
It is available for just a few extra dollars already.
Comment (1)
|
Calendar
QuicksearchArchivesCategoriesBlog AdministrationExternal PHP Application |