John Linton ...I wish someone had told me.......
I'm beginning to think that there's some sort of 'bush telegraph' that has a secret membership of which I'm not a member. I say this because over the past TWO days I've received THREE 'enquiries' about selling Exetel to another ISP in Australia and ONE from an Asian company wishing to acquire an ISP business in Australia. I cant believe the timing of these unsolicited 'enquiries' is purely co-incidental.
Two of the Australian enquiries were from ISPs who have made approaches in the past and who have been told we aren't interested in giving away our business to them - they obviously look in a mirror too often when trying to gain an impartial view of their business acumen.
The third Australian company - well - I'm not sure what to say.....maybe they need to lower their prescription strength or alternatively check the bank balance they report to the ASX as, it seems to me, they couldn't afford the air fare to visit Sydney.
The Singapore company was probably just fishing for information so I didn't bother to reply to them and spam blocked the email address of the enquirer.
As we held a board meeting yesterday we briefly discussed the issue of what we would sell Exetel for in the event we ever wanted to do that. As none of us had any interest in selling Exetel we decided that we advise any future enquirer that the sale price, in cash only, would be $A30 million which we fully agreed that Exetel wasn't worth.
When I read these approaches, of which there have been over a dozen over the past three years, I always wonder what this industry is all about. Why do people want to buy other ISPs? I do understand the general "takeovers for the under fives" concepts of:
1) Economy of scale
2) Reduction of overheads
3) Optimising use of infrastructures
4) Better buying power
and all the rest of that sort of simplistic guff.
I've never seen a single Australian example of it ever working out.
All that seems to hapen is a long period of chaos resulting in customer and employee unhappiness, a loss of the 'customer base' followed by a slightly larger company with less assets than before the takeover/merger/whatever.
The one certain thing that occurs, every time, is that almost everyone involved loses.
Think I'm wrong?
Make a note to read the SPT/TPG merged entity ASX report in September 2009 and compare it to the September 2008 report.
If an ISP wanted to grow its customer base then the easiest way of doing that is, I would have thought, to use the money in advertising or 'freebies' to new customers rather than paying to buy another company's customers. I mean if you're prepared to pay, say, $A350.00 per customer you could offer 12 months free ADSL2 on a 24 month contract and buy a customer much cheaper and keep them longer so why try and buy customers from another company?
I guess I'm getting old and should have stopped working before now, perhaps long before now, based on the people I know of similar ages who have had similar careers. So the concept of taking a reasonable 'dividend' in terms of a buyout for my years of work should be very attractive - but it isn't.
When we created Exetel it was with the ambition of creating something very different to any ISP then operating (and as far as I can see operating today). We haven't got even remotely close to achieving that ambition so far and therefore there is a lot of work to do, and presumably a significant amount more time needed, to get Exetel to the point where it will have achieved the objectives we set out to achieve.
As this is the last 'commercial venture' I intend to be part of in my working life it would be a terrible waste to me to end a long working life by failing to achieve my last work related objectives for the sake of a few dollars that I don't need.
I can't see those objectives being achieved in less than another 12 to 18 months........ that may well be an optimistic assessment.