John Linton
..........but where can we be?
I have no idea what 2010 will bring but all of the 'signals' I am seeing or picking up seems to indicate that I am not the only person participating in the running of a small company that is not sure of what is happening, or will happen, in the coming year. If Telstra's public statements late in 2009 are to be believed and come out on the more negative side of their forecasts then 2010 may be the first year in the '100 or so years of history' of telecommunications in Australia that the monopoly telecommunications provider has not increased its revenue - pretty much a negative land mark in itself and making everything else that might happen pale in to insignificance. Of course, the more likely analysis of those statements would suggest that while the first half of 2010 (and therefore the last six months of FY 2010) will be tough enough, Telstra's public announcements were just to make any growth at all look like their management did well in a universally tough period for the industry....though, at least as far as I can see, there are no indications that business is anything but very good at the moment and for the past year or so...perhaps I need to look more closely in case there is an 'iceberg' or two that have drifted too far South for this time of year......or their business or financial equivalents.
Perhaps things will become clearer as the larger companies return to work and look at what they see to be the current status of the various 'marketplaces'. There was that little flurry of deck chair shifting in the last quarter of the year but nothing of any magnitude which would normally suggest that everything was 'on target' for the larger companies - except for Telstra's strange announcement of 'flat' growth and TPGs successive (panicky?) rapid changes to its main ADSL offering (a 50% change in in two tranches in two months isn't "planned". Since then the proverbial 'slow months' have kicked in and nothing more has happened in terms of publicly observable changes or new 'initiatives'. From what I can see business, at least for Exetel in terms of new and churn in orders for our various services, are running at 20% up at the lowest growth service to many hundreds of percent in the highest growth service (because of the resources we have allocated to that service) throughout the last six months.
So the real question is....based on Telstra's statements in late 2009......has the whole marketplace slowed to a zero growth scenario or have the combined efforts of all other communications companies eaten in to Telstra's market shares and therefore all other communications companies are seeing an average increase in their growth consistent with Telstra's decline? (bearing in mind that Telstra has in excess of 70% of the total communications market and their lack of growth would dramatically magnify the results of their competitors). The answer to this question will be available when Optus and AAPT make their half year results public in a few weeks time (and to a lesser extent TPG and iinet) and until then everything is just guess work for us as we have only very limited sources of information.
As with every week/day of Exetel's life to date we will act conservatively - planning for the worst/hoping for the best - and continuing our never ending processes of trying to add new levels of efficiency to every thing we do and trying to reduce the prices of everything we buy in the knowledge that if we don't achieve those twin objectives which will continue to allow us to offer the lowest prices for each of the services we offer we will not continue to succeed in staying in business. Perhaps the time has come to have a serious look around to see what other opportunities there might be for Exetel in addition to or in replacement of our current activities/offerings?
Nothing ever really changes.