John Linton .......but why does it so often immediately have to become under threat?
The second half of July was much stronger than the first half of the month and by yesterday afternoon all of our financial targets had been met and all but one of our sales targets had been exceeded with the one sales target we missed was only by 3% against a very, very tough number - so the first month of what we predict will be a very difficult year has ended 'happily' for Exetel. This is a great result, not to mention a great relief, and allows us to be a little more aggressive in August than we had expected to be able to be. So we get a day's grace before the new month starts tomorrow. I sometimes wonder how people in business or who carry monthly financial or sales targets ever become so used to the pressure of those influences that they accept the pressures almost without noticing.
The disposal by AAPT of their consumer customer base is completely irrelevant of itself to anyone but those customers and, now we have had some explanations from AAPT as to the 'logisitics' of the sale there would appear to be no immediate impact on Exetel's business dealings with AAPT. However that didn't prevent us from receiving two approaches from 'brokers' (on behalf of interested parties) asking us if we were prepared to sell our "AAPT customers now that their future of supply is so uncertain". I asked as politely as I could bring myself to do what had become "so uncertain" but, of course got no remotely sensible reply - clearly haste of approach had been so great that no rational thought had been put into the actual rationale for talking to us.
Unlike presumably the attitude we are meant to have to our customers, we don't consider them to be so much 'live stock' to be auctioned off at the felicitous juncture of market pricing and carried weight. Personally, I am concerned about Telecom New Zealand's plans for the remaining AAPT wholesale operation which they appear to have clearly stated will be sold as soon as a realistic price is offered for that business and, given, that the $A50 million they will receive for the consumer operation will do very little to fix their financial issues in NZ it will obviously be a sooner rather than later time frame for that to happen.....and it wouldn't matter who says what to the contrary....that is an inevitable rsult...only the time frame is unknown. That gives us serious issues to work out how to deal with.
We have based a significant amount of our growth over the coming year on the move in our month by month revenue from residential ADSL to 8 other products/services one of the most important of which is business Ethernet which we were planning to source predominantly from AAPT. We had planned for no growth from ADSL - in fact we have planned for a decline in ADSL customers and revenue facing the inevitability of Telstra's desperate attempts to reverse its customer base decline and the frantic financial give aways that will entail and the resultant reactions from the other larger ISPs.
So there appears to be little doubt that AAPT Wholesale will be sold off sooner rather than later giving Exetel a fairly difficult problem in how we repair the gaping hole in our future business plans. The thought of becoming in any way dependent on the likely buyers of the AAPT wholesale business is not an appealing outlook unless the buyer was Optus - which it's difficult to see how it could be given the various factors that now apply to the business. Exetel is definitely faced with the two issues of finding a sensible migration to another infrastructure for its residential ADSL BYO Line customers and a new source of cost/effective 10/20/30 mbps business grade services which have been allowing us to progressively move our revenue streams from residential to business over the past 18 months or so. The time frame in which this needs to be done is, obviously, unknown to us and could be far enough away for it not to matter as much as I am postulating here. However it would be very imprudent to take the view that it isn't important to find a sensible set of alternatives as quickly as possible.
So - back to the drawing board - one more time.
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