Tuesday, May 18. 2010It's The Economy Stupid........John Linton ......the 'recession' has actually been gradually getting worse for over two years outside the mining and mobile telephony industries....one view I heard articulately expressed yesterday. I don't seem to be able to get anything right over the past six months so I am beginning to wonder whether I should be involved in making any more decisions....it would be nice to think that was going to be possible in the immediate future. So I resorted to calling up a long term acquaintance who also happens to run a communications company a little larger, and much longer established, than Exetel to get his opinions and advice. I don't ever recall doing such a thing since I arrived in Australia as an almost 18 year old some years before the first fleet struggled in to Sydney Cove. We have exchanged views two or three times a year on average over the past 10 plus years since we ran into each other at a particularly uninteresting seminar and discovered a mutual interest in wildlife protection. His views on the current state of the wire line based communications services in Australia is that residential users have less money generally than at any time in the past ten years and a large percentage of businesses, at least those that actually pay attention, are under quite considerable pressure in several areas including receivables and order book current status and outlook. His company is not retrenching staff but has done no hiring since early in 2009 and has not been replacing people who have left over the past 15 months - though he said that their staff losses over that period are less than half of the usual level because there are very few jobs available in our industry at the moment and that has been the case for some time. His views were that costs in the communications business in Australia had increased more than most people had expected during the period that interest rates were so low and that margins had tightened producing unexpected profit squeezes for his business and for other businesses he had some knowledge of. So we exchanged views for the better part of an hour over a couple of very pleasant glasses (supplied from his office bar) and I left to wend my way home. I'm not sure I got that much from the pleasant and, on his part, insightful, conversation other than other companies are facing their own different sets of difficulties which he believed are based on the two year weakness in the overall economy outside mining and mobile telephone services. It isn't much comfort to me (not being involved in mining or mobile telephone services) but perhaps fortunate not to be involved in a plethora of other services that don't seem to be doing so well at the moment. He did make a peripheral point - that in our case the Telstra/Federal Government 'negotiations' would not have improved residential business for companies like Exetel - he said he, as a long term Exetel ADSL user, had had four different direct approaches to 'come home' to Telstra over the last three months - each 'offer' improving on the previous one. As he joked on the way to the lift; "pretty soon Telstra will pay me to use their service if I stop using Exetel"..... ....and I think that sums up the current issues. Telstra, and more than a few other companies, have become so concerned about their eroding or stagnating customer base that their combined actions are beginning to create a completely different supply/buy demographic that I can't seem to understand at all. I have thought through this situation so much over the past six months I even dream about it some nights. It's long past time to find a 'solution' and move on to more interesting things - or perhaps the reality is that my aging brain just cant comprehend and compute the data relating to residential internet any more? Maybe we should now concentrate on how to sell fibre services - We received our 40th application for a Point Cook service earlier this morning after five days of offering the services. A very small number you may well think - and quite rightly so. However in the time ADSL services have been available in Point Cook we only have 72 customers and, at the current rate, we will exceed that number in less than a month. I will be interested to see what happens when we offer services over the Opticomm fibred housing estates where, as far as I know, other providers have been offering fibre plans for some time. Perhaps there's a message being partially obscured by so many difficult to understand incidents? - maybe I'm too tired to see it? PS: Some confirmation that it isn't only me and my friend who think the economy isn't the best at the moment: http://www.smh.com.au/business/consumer-confidence-dives-most-since-gfc-20100519-vd7a.html http://www.smh.com.au/business/clive-peeters-placed-into-administration-20100519-vd48.html Copyright © Exetel Pty Ltd 2010
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Gee John you are in the doldrums. I can only suggest you are on the wrong single malt anyway...
Exetel has always been a favourite of the tech heads thru world of mouth. They require less support however tend to use more of the bandwith and are less profitable. With your outstanding support crew you could be pushing more into the mums and dads area. That brings with it greater support requitements but more profitable clients particularly if they take up voip and mobile. If you want to continue in the consumer area its time to get your brand more widely known. back on topic... I always find Laphroaig's gives me a good kick in the right direction. Either that or take up flyfishing to help clear the mind. Tassie has some wonderful back country wilderness fishing and a couple of good distilleries . And an NBN rollout that needs someone like Exetel to run with so that the local semi-green Government can make a fuss over... Comment (1)
My Scotch of choice for most of my adult life has been/is McAllan's 12 yo.
Laphroiag, for me, is too stange a taste and although I have drunk it on many occcasions I have never liked it. Contrary to what you say Exetel's user base is not 'highly technical competent' people but almost 90% 'first time users (or they were when they signed up). We developed the super fast support facilities to cater for the needs of such users and our support now is, from what I can see, better (and far faster) than that of most if not all other internet providers. Whatever it is at the moment it will continue to improve month on month because of the unique advantages it enjoys over other companies support offerings - that's the theory anyway. Comments (6)
I've heard good reports about http://www.hellyersroaddistillery.com.au/the_distillery.html (the former milk factory) but I'm still partial to Lark.
Comment (1)
- Isn't Exetel the only currently active supplier for Point Cook?
- What about the 'it's new, it's new, I gotta have it' crowd? The 40 is interesting I guess, but it's only new days. But having said that, looking at the pricing I'd swap over in an instant to the $60 plan. Faster, roughly the same cost, pay only for what I use... got me.. The Fibre pricing is 'User Pays', if ADSL is such a problem(yesterday's post) why not use the same model? No Excess Charges, with the possible 'big' surprise bill. No Off/On peak stuff. - never taken any notice of the 'time' when I want to download something. No idiot 'shaped' stuff, I can't imagine that I will ever sign up for a 'shaped' plan. Hmmm, bit like my car really, I pay the rego yearly(monthly) I pay for the petrol as 'I' need it, ONLY what 'I' need, ONLY when 'I' need. revolutionary.... I'll have it.... Ohh, that's right, I live in Lindfield, roughly 12 klms from Sydney CBD, ADSL2 hasn't got here yet, can't imagine NBN in my lifetime. Comments (2)
As far as I can tell, the problems Exetel face are because you sell services based on other companies infrastructure and that those companies are also your competition. That will always cause problems.
It works because of product differentiation. The infrastructure owners charge a premium when they can get away with it and if they wholesale, they also get a slice of other markets without diminishing their brand. In ADSL, the "premium" isn't working. Even Telstra is offering cheaper prices to "bring home" selected customers - though in a way to minimise the impact on their "premium". Exetel and other resellers will get squeezed. My fear is that for some parts of the fibre market, it will happen there too. The only exception is NBN which I believe will only wholesale. In my opinion the communication infrastructure scene in Australia has not been served well by the private sector. We'd be better served by the infrastructure being publicly owned but run by private sector through tender. For Exetel, strangely it seems NBN is the long term hope! Comment (1)
I have never had any other view that a government wholesaler would be very much in Exetel's interests - just as I, like every other sensible person, believed that should have been the basis when the governments of the days were trying to work out how Telecom Australia should be privatised.
My problem has always been with any government trying to build a communications infrastructure and, in particular, the current government's way of going about that. I think I have stated more than once over the last month or so that the best of all worlds for Exetel is for Telstra (and possibly Optus) to compete with the NBNCo. The next best solution is the NBNCo providing a level playing field pricing regime - which even at this early stage seems unlikely to happen based on the scraps of information that appear in the public domain. Comments (6)
I don't understand the recent plan changes. What was wrong with the peak/off-peak system with a low rate for excess downloads?
Why offer "no-charge" or "unlimited" plans if they are not profitable? Were you spooked by TPG and AAPT? Comment (1)
The one you refer to as stupid'.
On national tv. - - - He said there was a an ISP, giving fibre away "free"(/$1/gb) . . /google: "paradigm shifting game changing pricing structure" - were his adjectives. I'm not sure how 'word' spreads through a population/city, but I suppose now its possible the good Department of Broadband /dbcde received phone calls 'last week' (following on from that 9th-May/'advertisement'), from Point Cook, asking: "Who is this ISP..? " ______________________________________________________________________________ ~However in the time ADSL services have been available in Point Cook we only have 72 customers and, at the current rate, we will exceed that number in less than a month. Perhaps there's a message there - maybe I'm too tired to see it?~ Comment (1)
I watched that interview.
I doubt many other people did - outside the industry. But - you could be right and Senator Conroy's comments had some sort of impact. Comments (6)
It seems to me that Telstra's new ADSL tactic is to put the squeeze on other ISP's that use there infrastructure by offering a lower price to the public (in some instances -ADSL2) than to their wholesale ADSL1 customers.
I would not be surprised if this tactic is being used as part of a strategy to slowly see the ADSL waters floating with the bloated bodies of ISP's, who up to recently were the ones eroding there market share. I think its good you are focusing efforts on business customers. As you've said in your blogs and people have seen in the media, the ADSL market is saturated, with headline grabbing deals from companies who own there own infrastructure in the exchanges and between cities. Good luck with the Fibre in Tasmania.. hopefully the orders will keep coming through, not just from the 'got to get fibre because its fast' crowd but also from regular Internet users. Comment (1)
I don't think Telstra has ever changed their tactics - they have always offered 'special deal' offering ADSL1 services to end users at prices lower than they sell to Exetel.
Similarly I don't see that much change in the 'tactics/strategies' of other ISPs in offering services - just a lack of new customers and therefore pressure on those companies committed to growth.....and the subsequent results. Exetel needs to maintain its residential customer base and hoes to be able to do that via whatever we can come up with. Comments (6)
Hi John,
Sorry to post something completely unrelated to todays post, but it's about downloading illegal content, something you're very much aposted to. It sums up my ideas and is by an artist. Have a great day. http://gizmodo.com/5539417/why-i-steal-movies-even-ones-im-in Comment (1)
This is an interesting concept.
http://www.theinquirer.net/inquirer/news/1648647/anyfi-voip-goes-live-uk Peter Comment (1)
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