Monday, March 15. 2010Who Turned Out The Lights?.......John Linton .........or is just my 'eyesight' suffering from cataract growth at an amazing speed? Trying to work out what is happening in the current ADSL market places is hard enough but making even a wide ranging estimate of what may happen in the April - June quarter that is only a couple of weeks away is, at least for me, completely impossible - for the first time in almost 9 years of pretty close association with the supply and sale of ADSL services in Australia. I have always been able to make pretty accurate estimates as to what will happen over the coming 3/6/12 month periods and as time moves and the actual results as they happen become real my estimates and forecasts pretty much match the realities - which has always been re-assuring in continuing to decide where to invest our very limited funds and which major areas of the marketplaces to pursue. But now, I don't have any idea of where the market places in which we have been involved in are heading and have even less clue as to what other companies actions will be. Pretty depressing if you have a responsibility to plan for the future and put in place actions and investments to bring those plans to reality. Not being anything but essentially pragmatic (or perhaps arrogant?) I am taking the view that if I can't see the future relatively clearly then it is probable, perhaps highly probable, that several or more than several other people in other companies are having the same problems. Because if there is anyone with a clear sense of the current market's direction it doesn't seem to be apparent to me. Perhaps all that means is that I have lost, or never had, the ability to actually understand what happened/is about to happen in ADSL markets and its suppliers. Then I look back over the past nine years and decide that is unlikely to be the case.....but I certainly can't see what is going to happen in the next three months. So - this becomes an issue, not today, but over the coming 6 - 9 months but does make some significant decision making today more difficult that it has been than in any time we have operated Exetel. For instance - investing another $A8 million in Exetel to buy two SCCC STM16s which have a theoretical 'life of ten years' only has a relevance if there is a need for that band width in 2020. If there is only a need of it for 2 years then the finance equations change dramatically. Similarly buying additional real estate (or even committing to the rental of additional real estate) becomes very different. Then there are the less large decisions like employee growth decisions and hardware investments and.....all the other trivia involved in running a company of Exetel's size. I spent most of Sunday playing with different scenarios of our Australian and Sri Lankan 'business plans' and finished up totally confused....I needed a Mrs Victor (especially as played by Miranda Richardson) to tell me "Jim - you think too much"....because the conclusion I came to was to just do what we have been doing for the past six years - reducing every cost we can by automation and 'discussion' and to aim at the lowest possible profit margins consistent with not losing money and making enough money to support the endangered species we have committed to assist. I realised I had wasted another Sunday on pointless speculation and got nowhere. There are no real changes we can make in the short term to the long term objectives we have aspired to since we began the business although current circumstances are very different. I wish i was more certain about what changes will occur over the coming months - but I don't - and messing around with the closed loop that is bound by the limits of the information I currently have is as fruitless an exercise as it ever was. A total waste of time. Next Sunday I am going to take a few days off to 'celebrate' a key birthday of most people's working lives in Japan with my wife and those of my children who can be spared to spend time away from their employer's needs for them so frivolously. I chose Japan as the 'venue' for this occasion as I would like to show some of the people closest to me two things that changed my perception of working life so completely when I went there for the first time in my 'adult' life some thirty years ago. If that doesn't work out then we will hopefully enjoy a few days in a different cultural environment. I have wasted too many weekends over the last six years and now have too few to waste any more. PS: Another analysis explaining why the 'NBN2' remains a craven political sound byte attempting to cover up a major election promise breaking fiasco: http://www.theage.com.au/opinion/politics/how-highspeed-broadband-will-be-the-death-of-telstra-20100314-q60n.html Trackbacks
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It is a very uncertain time globally so I agree with your strategy of automate, reduce costs and keep prices low.
Investment with two major risks is one risk too many. Cheers Comments (2)
Ideally I suppose - all risk should be eliminated.
Small companies don't ever seem to have that choice. Comments (5)
I have the argument almost weekly that NOBODY in residential market will need 100Mbit internet when 20Mbit allows you to watch a movie real-time in HD from netflix or bigpond movies (or similar). Even a HD video conferencing or tele-medicine system doesn't need more than 10Mbit.
Sadly John, you're preaching to the converted on this blog - your words need to be echoed by the the atrocious town-criers to the masses; A Current Affair & Today Tonight. Until the Bob & Mary 2.4 families understand that they can't afford the access and even if you can download a second movie in 10mins, you have to watch the first movie for 2.5 hours. Comment (1)
Felix,
You're almost certainly correct but I write about what is uppermost in my mind. Comments (5)
Bob and Mary 2.4 don't really care.
After all its the government's money - not theirs that is being spent. .... well, so they think! H. Comment (1)
I've been having a discussion about the NBN2 failing (there's a bottle of 15yo Glenfiddich riding on it) with a mate at work. I've given him the following questions to answer to see if I can talk sense into him:
How much of your internet use is based in Australia? How fast are the links out of Australia? How much of the whole internet is based in Australia? What are the costs per Gigabyte of international internet traffic? How many companies provide international traffic? How much will you try and download given you have 100Mbit? What is the maximum throughput speed you will get to your “content”? How many movies can you watch at the same time? Can you afford $150/month access costs even if this bundle includes your PayTV and landline telephone as datacasts/VoIP? How many businesses in areas that don’t already have fibre can afford to access fibre? How many communications companies in Australia have the money to invest in this scheme if Telstra is forced to break up? Given you can watch a HD movie from Netflix or bigpond movies in real-time, how fast can you watch a 2.5hr movie? Are you planning to open a 10 theatre telemedicine surgical practise in your loungeroom? Will international companies that see this as a great investment compromise that investment by offering a “fair-go” to the Australian public for their services? Are you prepared to regress back to “cable” based internet rather than continue the expansion into wireless potential? These might be a bit simplistic, but I'm hoping this will help him see sense. F Comment (1)
Being able to answer those questions correctly would tax most people's resources.
Comments (5)
As much as I think NBN2 has no market nor will there be a market, the questions are too simplistic. It is possible that NBN2 might generate applications but that is hard to predict. Would more people be able to work from home? Will fully immersed virtual learning facilities become widespread? Or more likely, will my three children each individually meet their friends in a richly featured virtual world after school - social websites on steroids. NBN has the potential to change how we do things.
Having said that, I'm not sure it will. Even if it could, I'm not sure we can afford it! Comments (2)
Another question: What would if cost to get similar to fibre capable speeds(ACTUAL 20-100mbps with 5mbps upload) via wireless w/o congestion,excess latency and at affordable costs? Not to mention the spector of having to errect more towers where currently there is opposition to them going up?
Comment (1)
No idea.
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(^happy bday.)
you know, we are not designed to last for 1000 years on this planet, earth maybe a 100 years if we're so lucky; So when should we inhabitants in Au embrace building out this Nbn ? if not 2010-2020 > then when? Shall we try 2040-2050? when many of us will be resembling tombstones ? See When you place it in a generational context or so, mind the above, whether it is fibre/wireless; & whether its public(/private- lets hope not) Funded .... seems of rather minor import. "push th' little daisies and make em come up Comment (1)
I recall that the global market for computers was supposed to be about 5. Yet these days most people have computer-based mobile phones many of which are internet-enabled.
I suggest the real question is not whether much faster internet will have a near term market but rather what sort of technology is best suited to its inevitable provision. Comments (2)
With the current situation of falling IP costs and your unusual lack of feeling as to where the ADSL market will be in 6 months time, would you not be better off continuing with another year of the current IP arrangements (at the reduced rates) before deciding to invest such a considerable sum in moving to SCCC STM16's.
Unless of course your expectations of the growth/move to more SHDL connections gives you the confidence to go forward with the investment as you grow to rely less Residential ADSL. Also got this from Amnet today. They have responded to the recent allowance bumps and have also bumped the allowance on all plans. Thought you may be interested for your research, but did not know where to send it. $29 4GB + 6GB 128kbps shaped if over $39 8GB + 12GB 128kbps shaped if over $49 20GB + 40GB 128kbps shaped if over $59 40GB + 60GB 256kbps shaped if over $69 50GB + 70GB 256kbps shaped if over $89 70GB + 140GB 256kbps shaped if over This makes them competitive with the Z/20BYO plan, but not on any of the higher ones. Comment (1)
Thank you for the information.
One day we have to buy IP direct. We have looked at it for each of the past three years. Maybe this is the year. Comments (5)
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