Thursday, August 5. 2010Is It 'Red Queen' Time Again?John Linton Some times I wonder whether I am capable of understanding some of the issues with which any Australian communications company, or probably any other type of company, becomes involved in. I understand that the aging process gradually diminishes the mental acuity with which any person is born and I would be no exception to that. I also see examples, Rupert Murdoch springs to mind, of people whose cerebral powers appear, if anything, to become sharper as they age. Perhaps this a particularly bad week - but I seem to be struggling to comprehend several issues with which I am currently involved with more than one other 'party' so I don't know whether my mental powers have begun to decline at an even steeper rate than previously or whether the current turmoil in the various services we provide has reached a point where less and less people really know what they are doing. It is only the fourth day of the week but it appears as though it is at least the 24th day of the week to me I feel so mentally jaded at the thought of trying to understand just what the various issues with which I am confronted actually mean let alone where to start in making any decisions as to what Exetel should do about them. This includes discussions with suppliers, discussions with possible new suppliers, discussions with possible 'partners' and discussions within Exetel itself with people who are acting strangely. With that preponderance of evidence it would seem to me that it is me rather than everyone else I discuss things with that is the problem....which is a pretty significant problem when you come to consider the implications. But is it really me.......consider some of the situations I am going to have to deal with this coming morning: 1) Meet with Telstra to try and comprehend why, if Exetel is to benefit from a small price reduction in ADSL1 port charges, we have to accept a new charge on back hauls that is greater than the port cost reduction? 2) Try to understand why Optus has just decreased their retail wireless broadband prices to below our wholesale buy price and having told us that we must limit wireless broadband plans to 5 gb (with a tiny percentage allowed to be 8 gb) have also begun offering 10 gb plans....and just what we now do 3) Try to understand why "nothing will change" in our relationship with AAPT despite the fact that they have publicly stated that they are going to sell the remainder of the company as soon as they can get the right price and what that means in terms of what we need to do now and moving forward. 4) Meet with a putative 'partner' and try to make Exetel's position clear that we don't regard giving control of our company to someone else for share scrip that as far as we can see is worthless without both giving offense or giving too much highly confidential information away that could damage our business. ...and that is just the first four issues to be addressed today - ignoring the requirements of running the business. Personally, I think the current frantic movements by all and sundry in the communications business is an indication that less people now know what they are doing than ever before. It could well be that this is a good thing for customers generally in the immediate present and short term and it may well be that it all turns out for the best in the medium and long term. It just isn't very pleasant to be trying to make sensible decisions that have some chance of producing beneficial results for your company, your customers and everyone else involved in your tiny part of Australian commerce. I hope that today proves to be more productive than it currently looks as though its going to be and that I can keep my sanity......where did I put Alice's mobile number...I need some hands on advice in how to deal with multiple Red Queens. Copyright © Exetel Pty Ltd 2010
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"4) ...share scrip that as far as we can see is worthless..." reminded me that the family owner a tiny company that I work for were offered 50% cash + 50% shares valued on a factor of EBITA. The catch was that the value was adjusted as the profit ratio between the current fiscal year and the following fiscal year. In the worst case if we made a loss the following fiscal year the family had to hand the company and shares over for free. It was lucky our accountant found the clause in the small print because our legals missed it! Apparantly it is a common sneaky practice. The field we work in is volatile, some years profit, some years loss. A few years later the value of shares of this buyer have fallen over 75%. The moral of the story... take 100% cash. Comments (2)
hi John,
With the current turmoil in the communication's industry , part of the song below just keeps replaying in my head. The Gambler by Kenny Rogers - "You got to know when to hold 'em, know when to fold 'em Know when to walk away, know when to run You never count your money, when you're sittin' at the table There'll be time enough for countin', when the dealin's done". cheers bill Comment (1)
Hi John,
Sorry to hear about all these things happening in the telecoms world. What a headache! I am guessing that AAPT are saying 'everything will stay the same' to not only you, but all there customers as they don't want you jumping ship before the deal is done. Comment (1)
Have you ever tried mind mapping as an aid in solving complex situations?
In 20 years of running a complex IT business, I never found a problem, situation or decision that could not be solved or clarified by mind mapping. They were also very helpful for group decision making where members of the group had apparently opposing views. I also use them regularly in dealing with personal decisions, particularly investments and particularly as my brain ages. There are many techniques for doing mind maps, but my preference is a large sheet of paper and a bunch of coloured biros. Then find a sunny spot with a cup of tea and let it flow. Group mind maps worked best on a white board or very large sheets of paper taped together. If you Google "mind map" there's lots of examples come up but everyone seems to develop their own particular style. This simple explanation is close to how I do them - http://www.jcu.edu.au/tldinfo/learningskills/mindmap/howto.html Comment (1)
Regarding your 4 points of complexity for the day's proceedings (although I admit it's very late in the day now for such thoughts):
Could the offer from Telstra be problematic simply because Exetel have always deployed more backhaul bandwidth per-user than most other ISPs? Regarding AAPT's sale, could it be possible that some potential buyers could bolster AAPT's network and offerings in ways that could help Exetel? For instance, if TPG was the successful buyer and make their EFM and Pipe fibre available under the sort of arrangements AAPT wholesale customers currently have? Do Nextgen Networks or possibly one of the "real" tier 1 IP providers that are entering the market provide for a more comfortable set of potential buyers? Comment (1)
Chris,
There is zero appeal in the thought of companies like TPG or iinet becoming 'suppliers' to Exetel by purchasing AAPT Wholesale - and there appears to be little likelihood that an acceptable to Exetel buyer will be found - but I have no real knowledge of what may transpire. It may be easy enough for us to 'migrate' the customers we have with AAPT to either Telstra or Optus but that is not known at this time. Whether the 'new' Telstra becomes easier to deal with also remains to be seen (apparently not according to Internode's and iinet's public statements. The meeting with Telstra earlier today went well enough but there are many issues to address. We will continue to work on a migration solution for our AAPT customers that benefits them and doesn't disadvantage us. We have yet to make any progress on the wireless broadband front. I can't see any way in which Exetel could 'partner' with any other company and I see no other company with the money to be able to make any sort of buy out offer that our owners would even give a second glance to. So - not the best of days - but then not as bad as I thought it might be. Comments (7)
It is mind boggling that you are not getting anywhere with optus considering they a few days ago have released cap plans that, at most, cost 'effectively' 2c per MB peak, 1c per MB off-peak ($20 per month max spend) and, at least, cost 'effectively' 0.7c per MB peak, 0.4c per MB off-peak ($50 per month max spend)
Comments (2)
We would expect to make some progress in the not too distant future.
Comments (7)
What about buying AAPT wholesale?
You have mentioned in previous blogs that you bank want to throw money at you. Would the numbers stack up to buy the whole shebang rather than a few mbps off them every month? Reverse the tables, you don't need to offer them cash necessarily.... Comment (1)
Nice thought but while our bank might, and I emphasise MIGHT, lend us a few million it is not even a remote possibility for us to think of borrowing $A350 million.
Comments (7)
Optus still change way more for pre-paid mobile broadband.
http://personal.optus.com.au/web/ocaportal.portal?_nfpb=true&_pageLabel=Template_woRHS&FP=/personal/internet/prepaidwirelessbroadband&site=personal 1gb used in 30 days for $30. Exetel provide 2gb in 90 days for $30. I like my effective $0 monthly fee with 1.5c/MB rate. Hope I'm not losing Exetel money! Comment (1)
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