John Linton ........I have serious doubts about the wisdom of my continuing presence at Exetel. I now have serious doubts that my view that there would never be a demand for expensive Telstra infrastucture ADSL services via Exetel may be yet another very wrong view I have held for too long.
Admittedly, Saturday is a quiet day for residential ADSL applications being on average only 20% of an average week day. Also there would have been a certain amount of 'pent up demand' from current customers based on our forum discussions. However I was very surprised to see that new residential ADSL applications for the just released Telstra ADSL2 plans comprised 30% of new applications we received yesterday and a far higher 45% of current residential customers 'change my plan' entries in the Exetel user facilities. I am not getting ahead of myself with these tiny numbers but the percentages have, very much, surprised me. While I will wait and see what happens next week on 'normal' days it seems likely that the demand for expensive ADSL at faster speeds is greater than any optimistic number I would have thought of.
So, in terms of ADSL2 in areas where only a Telstra infrastructure solution is available it will be interesting to see what happens between now and Christmas. It seems likely that Telstra Retail will follow up there recent price cuts/cash back offerings with deeper cuts at least once (their 'Christmas' special offer) and possibly one between now and then and the various changes that will now need to be made by other internet providers have yet to be seen. The tiny number of new and current customer applications we have received so far are all (but one) from areas where we cannot provide an Optus or AAPT ADSL2 service so it does, at this incredibly early stage and tiny numbers, validate the view that the TW ADSL2 services will only appeal to customers who can't get ADSL2 from another provider but it will be interesting to see if that view holds up over the next month or so.
I still have not dismissed the view that the days of being a wholesale customer of a major carrier in any part of the residential communications marketplace is not only long past its 'salad days' but may be rapidly approaching its dotage. I have expressed my doubts that the 'heads of agreement' between Telstra and NBNCo is anything other than a delaying tactic by Telstra to obtain some breathing space while they see what they can do to repair the damage done by customer loss and other negative results of not 'moving with the times'. I also sense that while Telstra is becoming slightly less difficult to deal with the changes it is making are pressuring the retail activities of Optus and with AAPT effectively gone from the wholesale carrier space this has changed the views within Optus as to the 'value' of their wholesale activities. In fact the whole concept of 'wholesale' has been changing for a while and has less relevance (for the carriers), at least as it is formulated in Australia today, than at any other time I can remember.
Our relationships with our three major carrier suppliers are all over six years 'old' now and in their different ways they formed the key services on which Exetel has grown -but they have all fundamentally changed over the past few months.Perhaps they have been preparing to deal with a new regime of price cut competition:
http://www.smh.com.au/business/telecoms-tumble-on-fears-of-a-price-war-20100813-1231v.html
The AAPT relationship has changed the most fundamentally simply because they have finally progressed their desired result of quitting the Australian market - can't get more fundamental than that. Telstra's changing attitudes have been evident for 6 months or so but are more evident today and in this 'twilight period' of considering the HOA with NBNCo are likely to stay that way for the next six months or so......but at the end of the day I can't see how/why Telstra would seriously pursue a wholesale business if they had any real choice. I would have thought that Optus had the most to gain from some sort of wholesale business but it has been apparent for some months that is changing due to the external pressures of Telstra and the putative 'NBN2' and some hard for me to read personnel changes.
So it's all going to be very different in a year's time and whether that is good or bad for wholesale buyers of Exetel's size is difficult for me to tell and having got so many decisions wrong over the years I should have learned enough lessons to realise I shouldn't try any more - it makes for a much easier life.
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