John Linton A little earlier this morning we completed the ADSL1 plan revisions following a day or so of discussion and a lot of number crunching based on an examination of the current competitor's offerings in this increasingly 'forgotten' sector of the marketplace. It seems somewhat strange to me now (as the person who set the original ADSL1 plans back in late December 2003 when ADSL1 was going to represent 100% of our business at that time) that we look at ADSL1 so differently as it enters the 'late sunset' of it's technological life. ADSL1 revenue now accounts for less than 30% of total revenue for Exetel down from 50% at this time last year although the number of customers has only declined by around 10%. Still - 30% of total revenue is a sizable 'chunk' of any company's income though the business plan for the current year shows a continuing decline.
We were able to reduce the 1500/256 plans a little via a slight price reduction from Telstra (the first in almost 5 years) which, simply gave us the slightly lower buy prices that have been in place for other wholesale customers for at least up to two years. As far as I can determine this means that we have recovered the position we always aimed to be at since we commenced in this business - the lowest priced plans with more inclusions than any other Australian provider for both 1500/256 and 8192/384....which are the only speeds that are still ordered by new users though the occasional 512/128 plan is sometimes bought. I was surprised that it actually took as long as it did to complete that review but then so much has changed since we last did it and doubtless so much will continue to change.
Because of the time taken to complete the ADSL1 review took so long we haven't had a chance to look at the ADSL2 review at all and only cursorily looked at wireless broadband pricing and positioning. I will do some work over the next three days on these plans but need a lot better insight into what's happening than I have at the moment - practically none. ADSL2, in some ways even more than ADSL1, is being 'squeezed to death' by over supply and the desperation of so many suppliers to 'maintain their customer base' let alone grow it. The ABS statistics are still well over a month away and it would be nice to see what their report contains. Although, given their source, those figures are 'rubbery' at best they usually provide some sort of trend line in terms of overall direction.
As the new financial year develops it should become more and more obvious what impact fibre will have on ADSL2 and, depending on the roll out time frames by the mobile carriers, what impact wireless broadband will have. The impact of fibre won't be that great and, depending on exactly what happens after the next general election, may vary greatly - irrespective of whether the current Labor government is returned or not (if Labor loses and the Coalition dumps the 'NBN2' then I would expect to see Telstra pursue its own fibre solutions aggressively and immediately which would quite possibly have a bigger impact than if the 'NBN2' continues on). Wireless broadband, if delivered even more widely at higher speeds will have a significant impact on the current ISP scenario and, from what I can see, ADSL2 is already past its 'universal' appeal and will follow ADSL1 in to a continuous decline in user numbers.
So the challenge is, at least for Exetel, to manage the interregnum as best we can with the very limited options available to us and use acuity and operational efficiency to overcome the problems of size and price disadvantage - not the easiest of tasks at the best of times and particularly now - at least that's how it seems to me.
Marveling at the beauty of rural England, its village life and its wild life seems a very long time ago.
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