Wednesday, August 19. 2009Is There Any Point To Exetel's Existence?John Linton I had an interesting meeting with one of our competitors yesterday who was interested in buying Exetel. I was surprised at the approach because, personally, I can't see that Exetel represents any value to any other Australian ISP. We have seldom, and not for many years now, given any indication that we are interested in selling the company. I can't see how anybody can have formed an opinion that we would be interested in selling as every action we take and every word we make public makes that position perfectly obvious. When I received the call. 'brokered by one of our suppliers', I made these points quite clearly but as the caller wished to have a '"brief - get to know you face to face" I agreed - mostly out of curiosity and in a lesser hope that I might learn something useful. (first precept of running any commercial enterprise: always collect as much information as you can because you never know when you might hear/read/see something life changing). It was a pleasant enough meeting in most ways but I didn't learn anything very useful and I certainly have some very different views on where some key aspects of the Australian communications marketplaces are heading so there was very little, perhaps no, 'meeting of the minds'. His main point seemed to be that there was no future for any supplier that wasn't able to build a customer base of 2 million customers (he didn't manage to substantiate why that is the case). The subject of price came up and I was unable/had no desire to enter into such a discussion so instead I asked how an 'outsider' would value Exetel if it was to make a serious offer. After the usual gobbledigook about valuing the user base as they had no desire to take on the 'shell company's liabilities" he came up with a formula that they "had used in the recent past". I explained that Exetel didn't regard its customers as 'assets' and in the event we ever did sell the company it would be on the basis that the whole company was the 'asset' - as I would have a major problem in treating our customers like some sort of 'live stock'. There was one question that I was unable to give a realistic reply to which was "under what circumstances would Exetel's share holders sell the company?" My response was that, short of serious ill health, I didn't think that Exetel would ever be for sale. We then briefly discussed how difficult it was going to be for small communications companies to 'stay alive' in the next 18 months or so before we parted company after a fairly pointless 40 minutes and went our separate ways. While I was driving home I thought about whether the next 18 or so months would see any major, and life threatening, changes in the Australian marketplace and, perhaps because I am just too tired, I decided I couldn't see anything happening that would pose any greater challenge than usually happens in any 18 month period. The vague issues that had been raised were non-events or simple things we had considered and dealt with a long time ago (Telstra aggression, 'NBN2' pressures, price difficulties as the "Pipe Cable founding buyers" came on line, ADSL stagnation). However, it did cause me to think about whether there is any real reason for Exetel, and for that matter many other companies, to remain in the Australian communications business. I'm not given to introspection and to misquote the late and unlamented Marshall of the Nazi Luftwaffe "when I hear the word 'philosophy' I reach for my revolver" - but what is the point of Exetel, and many other companies, actually being in the Australian communications business? I know why we started Exetel and the objectives we set for ourselves. After a little over five years we haven't been able to achieve at least one of the three objectives and I sometimes wonder whether we ever will given the pressures of the other two. Similarly what are almost all the ISPs in Australia in business for? Do any of them actually do anything better than a major provider? Do they do it cheaper? Do they do it more efficiently. Basically the answer is they all do the identical thing at slightly different prices - all of which are much higher than they need be....including Exetel. It's partly because of the way the telecommunications monopoly was deregulated so badly but even in the case of the mobile businesses they do nothing different and if the name was hidden on their ads could you really tell any of them apart? I don't think that Exetel is ever going to have 2,000,000 customers, certainly not in my life time, and I also don't think that Exetel is even ever going to have enough customers to make any difference to pricing in Australia - except for the small percentage of people who use our services of course. So perhaps the person I met is right and Exetel will simply be unable to compete in a year or so time and all the effort put in will have been wasted. Then again - I have never thought very much of that particular company and, harsh though it may be on only 40 or so minutes acquaintance, I think even less of it's CEO - I have little doubt the view is mutual. You never know - we might solve the conundrum of our three conflicting objectives and in the mean time some endangered Australian flora and fauna may get some better chance of avoiding extinction....and I suppose 100,000 or so users of Exetel's current services are getting better value than they would if we didn't exist. Trackbacks
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From years (aeons?) back, "It's not the size of the dog in the fight..."
There's always a place for an ethical, well-run, super-competitive corner store. I'm sure many others would agree. A big goodguy ISP wants to help out a a little one by taking over its insignificant customer base? - customers who, I'm sure, would then vote with their feet - the telecomms form of philanthropy? Use the experience as a well-earned energy boost to continue that which obviously means a lot to you. cheers shane Comments (2)
Quote: "....and I suppose 100,000 or so users of Exetel's current services are getting better value than they would if we didn't exist."
Exactly. If you sold out to a larger business, prices (for us customers) would ultimately rise, and Australia would lose a small but influential and maverick ISP. For a "small" ISP, Exetel is known quite well in the industry and becoming increasingly known in the general public. Obviously personal reasons will one day dictate any sale. Hopefully that day is a long way off. Comment (1)
I would also add the words "innovative" and "progressive" to the description.
As a long time customer I would be shattered if Exetel was sold. I'm sure that standards would fall and charges rise as a consequence. After all, Exetel would have to be the only comms company whose CEO communicates directly with customers and others via a blog! Cheers, Richard. Comment (1)
Thank you for the kind words Richard - we have no intention of selling unless either mind or body fails to cope with the work load.
Comments (6)
What differentiates Exetel from the majors from my perspective is the static IP address and no restrictions on running servers, and no ports blocked. That's what originally attracted me to Exetel. The price and additional "frills" are what keep me here (free voip calls, free sms...)
I want to be a participant on the internet, not just a consumer of content. The majors will sell me this service, but assume that I must be a business and charge accordingly. There is no provision for the sophisticated user. Comment (1)
It has always surprised me that ISPs don't provide static ISPs as standard - there is no cost involved and, ifany thing, it would technically simpler.
Perhaps it is just a hang over from the dial up days? Comments (6)
Isn't the ever changing IP address just a way for non-ethical ISPs to assist their un-ethical customers to committ internet theft etc.
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It doesnt matter Lawrie as they log all the IP's that u have had to be able to track you in what u downloaded when.
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Even if in anytime you would have to sell off Exetel,I would rather see it sold off to someone who would just keep it as it is than changing to something else.
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Should that time ever come we would prefer to sell to Optus.
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now there's a company that really needs to know how to implement systems and provide good web based systems for their customers, they should be so lucky
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Hasn't history indicated that the best way to eliminate the competition is to buy them out?
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As someone who has been with Exetel since shortly after it's inception I would be disappointed to see Exetel sold, but should that time ever arise I personally would hope that you would explore options whereby Exetel's customers (and only customers) could form a co-operative / consortium to buy the business.
I'm sure there would be numerous customers like myself that would be open to investing in such a great business as Exetel. Comment (1)
I have always liked that idea but you would understand how dificult it would be to do.
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