John Linton ......at least to me.
I got through my day of weird situations yesterday without further damage to my sanity and 'emerged' from three of the five situations with slightly better results than seemed likely before the day 'got under way'. So, on balance, it was a much better day than average and perhaps we managed to make a tiny bit of progress rather than falling further behind. I don't seem to be able to, personally, understand why so many people seem to hold views that are contrary to mine on so many aspects of the communications industry, the general economy and events that are occurring right now.
I can state with absolute certainty that while coal and iron ore prices and the volume of exports are delivering record balance of payment surpluses (which is great to see) 'main street business' on this side of the continent is not doing particularly well as signaled by residential payment defaults by residential customers and an unprecedented late payment volume by corporate customers. We have tracked these figures very carefully since the first month we billed for services and there can be no mistake about what the current level of defaults are showing......there is not as much money around, even for 'essentials' as there was a few months ago. Now, I'm not saying that the slight rise in residential default and the strange 'hump' in business payment delay is a sign of imminent financial distress. I understand that there can be many other factors that may produce such results. However I am saying that Exetel, and everybody else, would be unwise not to look into this situation very carefully before assuming that all is fine with the Australian economy generally.
The other major indicator that I have always used as a guide to how good or bad business is in the communications sector in particular is the number and frequency of contacts that I personally get by new and current suppliers trying to sell us products and services and the degree of 'flexibility' they demonstrate in their approaches. That 'index' is at the highest point that I can remember and appears to be continuing to rise. In many ways that particular scenario is a very good thing for us - bringing with it 'more for less' in most cases. However it does indicate that other customers of those suppliers are not providing the order levels that they previously did and that something adverse is happening that we obviously haven't had the ability to notice as quickly as other companies. Again it could be for very different reasons but my long experience indicates that isn't the case.
We have taken a very cautious view of FY2011 and our business plan is more conservative than in any previous year. Given the 'good' results we have had so far it seems strange to now be thinking that we should take an even more cautious approach after only five weeks of the new financial year but that is what is crossing my mind right now. Although our July business was up 12% or so from July last year and August has started in a similar fashion I can't rid myself of the 'feeling' that there is just too much change occurring on a virtually daily basis for there not to be more negatives than positives that we haven't considered. That's not a good feeling to live with day by day.
Maybe I am not 'reading the signs' I see correctly? That certainly wouldn't be the the first time. However, it doesn't look like it - I really don't think that times are going to get better any time soon.
In the meantime we need to decide whether or not to offer ADSL2 services via the 1,200 Telstra exchange network that provides coverage to approximately 800 exchanges not covered by Optus and AAPT. Because we can't get as good a deal from Telstra Wholesale as they give to other suppliers it is a difficult decision to make particularly because of the 'marketing' activities of Telstra Retail which effectively sells the service to retail customers at up to $30.00 less than we can buy it for wholesale. We should have the 'final facts' on which to base that decision later today to allow us to meet our decision schedule of Sunday evening.
Life shows no signs of getting any easier.
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