John Linton We face a difficult week in different ways.....though all weeks seem difficult these days. I sometimes wonder whether business is actually getting continually more difficult in the Australian communications business or whether it just endlessly repeats the same cycle and induces a greater degree of boredom that just makes business life look more difficult. Because our company is so small in any comparative terms the major trends and demands do not really affect us but the 'knock on effects' of such changes sometimes do and often quite unpredictably. I'm glad we don't have Telstra's problems or even the problems that Telstra's problems will bring to Optus and other larger communications providers. (like the steep share drops experienced by TPG and iinet when Telstra announced it was going to buy back market share and the share market realised that the 'free ride' was over). However we do get affected eventually as is evident from Telecom NZ's sale of their residential telephone/internet business to iinet....in that case it removes a long term supplier to us which will be impossible to replace as it was a major 'component of our future business "strategy" (as well as being a key part of our residential offerings).
I am glad Exetel doesn't have the problems of losing wire line rental and call revenue that so many of our 'competitors' are dependent upon to boost their annual revenue lines and, presumably, do something for their profit performance - because, with the exception of the Optus bundled wire line/ADSL2 services we don't have any. However, we do have the increasingly difficult and complex operationally task of building our business VoIP business - not only in terms of infrastructure and switching equipment but in terms of end user equipment which in turn requires warranties and maintenance capabilities. While none of those activities are particularly difficult of themselves they are not all that easy to put in place and they do need medium if not longer term planning processes so that we do not inconvenience any future customer. We already offer customer premises hardware and, being the cautious people we are, we restrict that to Cisco boxes which can be supplied with both on site Cisco maintenance and, if required, Cisco leasing finance. But times are changing.
Small businesses which are now ever more enthusiastically embracing VoIP (increasingly for reasons far beyond some call cost savings) are needing hardware solutions that cost far less than the sort of Cisco hardware that medium sized businesses are used to paying. Also, because of the nature of the new types of solutions that VoIP can deliver they do need 'moving parts (hard drive) hardware' that, by definition, requires rapid response maintenance. Our VoIP group believes they have developed a very useful VoIP solution based on micro computing hardware and Asterisk software which will be very appealing to small customers and, at first look, I can see that solution's many appealing features. One the non-appealing features is providing hardware that requires both warranty and ongoing maintenance. Providing maintenance services brings with it not only the high start up costs but the high ongoing costs of having instant response 'stand by' repair/replace services. I have some experience of providing such services and from that experience I understand the costs and difficulties even a highly efficient operation brings with it.
However, looking in to the future as far as next month clearly indicates that wholesaling ADSL services is not something that will ever bring any real return to Exetel which is quite OK because we never thought, or planned for, that to be the case. Over the years of running an ultra lean and incredibly cost/efficient service supply company we have perhaps been too dilatory in cutting our business over from what we clearly saw as a product in its sun set years to something that hadn't quite made it over the dawn yet. Inevitably that lack of haste has left less than a desirable amount of time to make the required changes....but now we have to accelerate them.
So the week is full of 'meetings' and 'discussions' centred around what we do about the AAPT demise, the Telstra Retail 'buy back' initiatives and the business VoIP solutions both short and medium term....as well as dealing with the usual suspects. Once upon a time I would relish dealing with such very difficult challenges.....I'm not so sure about that now though I suspect it has something to do with the first days of the new EPL season and the lack of sleep that brings with it....it takes some weeks to adjust to the required radically altered sleep quantities.
Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46