John Linton Wednesday progressed without incident and we signed the office lease, finalised the office fit out and signed off on it and we selected and committed to an apartment for the Australians who will visit Sri Lanka over the next twelve months to help train the Sri Lankan employees. As a late bonus we were couriered a letter from the SRI Lankan Board Of Investment accepting our application for tax exemption status late on Wednesday evening and therefore completed everything we came to do. A successful trip after an impossible start.
So there was time to catch up on the Australian business and technology press. Seems to be that there is now a more public and growing consensus that the rushed out Labor national fibre network 'tender' is simply going to allow the reinstatement of the Telstra monopoly on residential broadband with the associated sky high pricing for less than optimal services (anyone remember 2002?).
Told you so - months ago - nothing to see here - pity so much time and money was wasted on researching and then promulgating and administering/regulating the poor old Telecommunications Act.
I couldn't find anything else of interest so I did some work on Exetel's likely services pricings for July 1st and attempted to progress the analysis of what it would mean to change ADSL2 suppliers when our two year contract with Optus runs out early in the new financial year.
From what is currently available in the Australian marketplace I think Exetel's ADSL (1, 2 and Naked) offerings are pretty much priced and compiled as better than anything available from any other ISP as they are set up as the moment. We have some room to move to meet any likely changes with the only ISPs capable of improving the value of their plans and I think we will make a series of small but useful improvements to the ADSL services in June or early July.
I would like to move the 'value proposition' of the Exetel ADSL plans to a greater differentiation to the other ISP offerings (in financial terms) than they are today and that looks to be possible depending on what changes occur in the market in terms of end user pricing over the next few weeks.
From what I see looking at the comparisons today it appears to me that only one competitor has attempted to improve their costs to end users recently with most other companies actually reducing the value they offer - at least that's what my 'modeling' seems to show feeding the current plans of four of the more obvious competitors in to the comparison programs. I suppose there will be some improvements over the next six months and, from what I can understand, we have enough 'fat' in our current operating costs to allow us to meet most likely changes.
I looked at the VoIP costings we currently use and did the projections of volume increases likely to be seen over the coming year and what could be done to improve the value of the Exetel VoIP services and, again, looked at what's happening with VoIP pricing and offerings from the more aggressive VoIP providers. I don't think Exetel will be able to do much in terms of price reductions in local and national calls (at ten cents untimed over a Tier 1 termination network it's about as good as we can make it). However we will reach a 'volume break' before the end of the calendar year and it will enable us to pass on those savings, in their entirety, to Exetel customers as the profit margin on VoIP is meeting our needs at this early stage of developing the service.
The scope in the mobile offerings is much wider and deeper and, I believe, will become even more attractive over the coming months giving a lot more scope for 'bundling' a really good mobile service with VoIP and data and - hopefully - data over 3G.
The decision on making a change to an ADSL2 'partner' is now the major decision to be made and one that will require the most time over the next two months as we don't have a lot of time now to put in place an alternate arrangement if that's what's decided. I have no real 'feel' for what we should do that will be of the greatest benefit to our continually growing base of ADSL2 users and need to get more information very quickly when I return to Australia as, good heavens is that the time, Annette and I are taking a month's break starting in early July and it will have to have been decided by then.
Looking at the various numbers and combinations it ought to be possible to improve the value of Exetel's main service offerings by around ten percent in FY2009for every current Exetel customer - perhaps a little more depending on how ADSL2 becomes priced in July and which supplier we end up using.
I would like to know what other communications companies are planning to do over the next three to six months in terms of pricing their offerings before making any irrevocable decisions but, as usual, that isn't going to be easy to work out and my guesswork (I've stopped using the word "planning" in this context) has proven to be increasingly wrong over the last two years.
I'll think about it on the flights back to Australia.