Thursday, April 8. 2010One Step At A Time.........John Linton ......covers an awful lot of distance over six plus years of 'steps'....and now it's time, once again, to plan for the coming financial year. We settled on the purchase of the new North Sydney office space earlier this week and then met with the builder and work station supply people to get the work done to refurbish it and make it 'inhabitable'. When we started Exetel (in its current incarnation) in January 2004 in a small spare room in our house having decided to invest all of our then available money into the new venture it was inconceivable that six years later we would have invested five times more than that in buying commercial property to house its continuing growth - particularly as we had moved half of the company's operations to Sri Lanka to contain the Australian personnel growth costs. We made the decision to buy our own office space rather than continuing our pattern of increasing the amount of space we rented for sensible financial reasons (Australian 'accommodation costs' were reduced and the commercial property market prices had reached a ten year low due to the 'global financial crisis'). However it still seemed, to me, to be a big personal commitment and very far from the expectations I had when we commenced this process. Similarly, either this month or next month, we will bill more than $A5 million in a month for the first time - a far cry from the $A10,000.00 or so we billed in March 2004 and, like taking the first step and then the next and then..... we will see the result of what happens when you achieve an unbroken record of increasing your revenue each month for 75 consecutive months or whatever it is we are up to this month. Of course, in industry terms, these numbers are tiny and I'm only referencing them in terms of what happens to an individual's view of what happens in 5 or 6 years of operating a start up business and how where you 'end up' over such a period varies widely from where you thought your efforts would lead you to when you started the process. I certainly didn't think that Exetel would be where it is today and, I'm pretty sure if I had known that, I would never have commenced the process. Not that I don't think that Exetel hasn't done quite well - in terms of surviving in an endeavour where so many other 'start up' companies have disappeared without trace alone is some sort of achievement. To have built such a quintessentially efficient operation in two countries and have to have so closely interwoven their individual operations is something that gives me a lot of pleasure to have been part of and to have built such a solid financial entity in such difficult circumstances is something to be at least mildly proud of being a part of. However it isn't what we had planned and that, at least to me, is disappointing. I recognise that the planning' we did before starting Exetel was very deficient and our non-achievement of many (all?) of those initially set 'goals' was, at least in hindsight, never going to happen but that doesn't lessen the vague sense of disappointment in not achieving what you set out to achieve. Perhaps I always feel like this when I begin the process of reviewing the past 9 months in order to better plan the coming 12 months that will begin on July 1st 2010 - although I have been developing business plans for as long as I can remember I actually can't remember how I felt doing this even last year at this time. Although the current financial year has been the most difficult for Exetel of its short existence I think the 2011 financial year will be a lot more difficult - and across every aspect of our business. I don't say this with any real sense of trepidation but simply as an acknowledgment that we will have to change what we do and how we do it more completely than at any previous time. While we have built a very solid platform for our current businesses we will need to change quite significantly to meet the needs of our future businesses. That's something that is always difficult to do for even the most flexibly minded of sensible people. Any sensible predictions/insights into what will happen in the Australian communications market places and infrastructures over the coming 12 months would be appreciated. Trackbacks
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To John Linton,
I really pleased with Exetel performance and track record, and in a way, proud to be part of it. As a loyal Exetel customer for the last few years , I am finding my data needs are increasing by about 5% a month, and I am believe not the only one. To keep me contributing to your its, and fair to say an increasingly ermergent percentage of its customer base. I wold highly recommend increasing the cap by 5% per month for the same money, especially the current 70+60 nak-adsl2+ . Its a small ask for continued loyalty in both revenue and continued customer referrals. Note, that in the light that TPG appear to be offering unlimited ADSL2+ for $75 a month from yesterday, convergence to your highest point will pressure churn, and make it harder to continue referrals Comments (2)
Thank you for your support - we really appreciate it.
Exetel unlimited ADSL2 plan is at least $10.00 lower cost than the TPG plan ($20.-- line rental instead of $30). Is there something I am misunderstanding? Comments (4)
Hi John,
I appreciate your attention. I'm referring to the naked ADSL2+ offering in particular. You have proven you can do it in the past, and I think its a better option for you to retain loyal customer through gradually increasing value, than big bang unlimited which most likely will be higher than $60 a month. Its much harder to get them back once there lost, and from reading a number of your posting over the last couple of months, IP costs are coming down. l'm not asking you to reduce your rates, just appreciate that passing on incremental savings in small incremental movements is really going to help persuade others to use your ISP rather than TPG, Netbay, AAPT, etc. Cheers. Comments (2)
Congratulations on the longevity of your business John! Could you give us a glimpse as to what your initial goals were for Exetel?
My "insight" is more of a question: do you think pricing will reach a stage where the cost of online services will be so low that customer churn will essentially halt? The example being my family: we've been with IIN for a number of years and the disruption of shifting to an alternate ISP (disconnection timeframes, changing email addresses) makes us rather apathetic about looking for new deals, especially given the low cost of telecommunications relative to other items (food, mortgage, childcare, etc) when we look for savings in the household budget. Comments (2)
The initial goals of Exetel were to do everything 'perfectly' - clearly we have failed miserably in those endeavours.
My personal view is that the cost of ADSL2 will continue to fall - at least at the higher end and you are right to assume that pricing will become increasingly irrelevant as an incentive for an end user to change providers in an increasing demographic. The fact that the cost of internet will fall will accelerate it being 'bundled' with a folio of other services and it will decrease as being sold in the future as a stand alone 'product'. Wireless broadband will become a greater percentage of the total broadband market than ADSL in the not so distant future. Comments (4)
thanks John
...and switching Wireless providers will be considerably less disruptive than fixed line - like changing your mobile phone company but without address portability Comments (2)
Not so much a prediction, but more a crazy idea. My observation that I've replaced my sedentary habits with more active habits therefore less downloading. From > 70gb/mo to < 30gb/mo.
In December, I become a recreational scuba diver on the weekends and week nights I have done more sports activities, rock climbing, running, and sometimes night scuba diving Because of these things, I find myself sitting in front of the computer as much, caring less about downloading. My crazy idea is to create business ties to businesses to offer your customers discounts to things that take up their time that they would enjoy. Meaning your users spend less time attached to the Internet. Probably a fruitless exercise because it would be difficult to find offers that suit 150,000 different people. But I cannot deny spending more of my 'free' time being active means less time downloading. Comment (1)
That's quite funny, having Exetel entice people to leave their house and actually use less of their services...But in this case could be a winner as less usage is actually better for Exetel on most fixed line services
I agree with most that ADSL costs for the average user will soon bottom out, making pricing and allowance no longer a factor in enticing people to change providers (at least while Tel$tra is the only one with last mile cabling to the majority of the population and Wireless data charges remain high). My prediction is that with ADSL reaching saturation, content bundling will be the point of difference going forward. I can see included VoIP calls, SMS, or TV/movie downloads etc being more important in retaining and acquiring customers. Comment (1)
entice them to leave their houses but how many in the not too distant future won't still be online via HSPA anyway
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