Wednesday, August 18. 2010The Re-Emergence Of A Wholesale Communications Market In Australia?John Linton After two 'normal' days I remain surprised at the number of current Exetel customers who are transferring to the just released ADSL2 plans on the Telstra infrastructure - more than 500 in two full days plus the weekend. I am also surprised at the level of applications from new/churn users which has added 25% to the order level over the 4 days the plans have been available. Of course much of this could be explained away as the normal 'release date surge' but then we only really 'advertised' the plans on our forum and won't formally announce them to our customers until the September newsletter which only goes to around 20% of total customers - maybe we should send an 'announcement' to all ADSL1 customers? One of the reasons for my surprise is that, although we did the very best we could with the pricing, we were 'hamstrung' by the extremely high buy costs - Telstra Retail's end user prices, providing you bundle other services, are much lower than what we could come up with. As several carping posters have pointed out our 50gb/120gb plan is $15.00 a month more expensive than the 50 gb Telstra Retail plan and, of course, we do not offer the $200.00 or so "cash back" credits that Telstra do. ( I don't know why they wouldn't think we hadn't checked the prices other providers offered before coming up with our own best efforts). So, given that our wholesale supplier is offering the same services at lower ongoing prices and much lower 'once off' prices than we can - why are so many more people than we expected buying the identical service for more money from us? In fact why does ANY customer buy a Telstra ADSL2 service from us? That has been my position until now.....it may very well remain my position. At this very early stage, based on tiny numbers, I am assuming that there is a section of the market that just doesn't want to bundle in their wire line and one mobile service - for whatever reason(s). Maybe there are other reasons (24 month contract?) but until some sort of trend can be established that's all I can come up with. I don't know what Telstra plans to do between now and Christmas but I am assuming that they will 'improve' their offerings well before December and that makes me wonder what other providers, particularly Optus, will do. I suppose what is much more important is what effect Telstra's new pricing and marketing policies will have on the number of customers they 'win back' from other ISPs. As I mentioned yesterday - every 'win' for Telstra is a 'loss' for someone else and up to now other ISPs have been very happy to again sit just below Telstra's retail price points. More importantly is that ever dollar other ISPs are forced to reduce their current prices by is a reduction in their profit. When the 'history' of broadband supply in Australia is written it may well be the case that a combination of federal government interference ('NBN1' and 'NBN2' and quite possibly 'NBN3') will be seen together with the effects of that interference on Telstra as being a turning point, perhaps even the turning point, in the way that the Australian communication industry operates.....and, quite possibly, not for the better from anyone's point of view. In the mean time it will be interesting to see what happens in Exetel's 'world' in terms of how the Telstra 're-invigoration of interest in wholesale customers turns out - now that there is beginning to be a real wholesale market again in terms of the communications industry.... ....or did you miss that more obvious scenario amidst all the current tub thumping and sundry ranting and raving? Trackbacks
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it may not have been advertised as yet but there is a 19 page thread on Whirlpool about it which I would assume has alerted a few of those 500 to the new plans http://forums.whirlpool.net.au/forum-replies.cfm?t=1497432
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Personally for me it is more to do with my happiness with Exetel (I now have ADSL2+, home VOIP and HSPA plans with you) and the services that I get compared to the disgraceful situations which we have found ourselves with Telstra customer service (we have had a double billing problem for nearly 18 months now, and after 5 or 6 times of being reassured the problem solved it still continues..). Apart from the required phone line, I will never, ever go with Telstra again, and I know a lot of people feel the same way.
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I'm with Owen. The service from Telstra sucks. Furthermore, signing up for 24 months for ADSL is nuts given how dynamic the industry is. Added to that... what other rip-off service from Telstra would you wish to pay for?
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I think you underestimate the amount of hatred people have for Telstra, and underestimate the severely the amount of hatred people have for Bigpond.
And yes, the 24 month contract is scary for a lot of people, especially the transient portions o the population who can't get property leases for longer than 6 months and don't want to be locked in for that long. I have had so many bad experiences with Bigpond over the years managing friend, family and client connections that I just couldn't convince them to give up (usually their email address... something ridiculous like dcharles38@bigpond.net.au, even after offering to configure them their own domain-based email account like me@dcharles.com for $10/year). You should definitely contact ADSL1 customers to suggest they change if the new ADSL2 accounts will be better value for you and them. Otherwise, leave them where they are, it will be less hassle and expense in the long run. On a side note, I am disappointed I don't even seem to qualify for Telstra ADSL2 on your network even on the suburban Gold Coast. Comment (1)
I believe I can keep my Pioneer discount with the Telstra ADSL2 plans? If so, it makes it a little easier for me to stay with exetel. I really don't want to go to telstra. (24month contact, uploads, surprise billing, etc)
I've been very happy so far with exetel adsl, exetel voip and telstra budget line rental. It is good if I can keep that setup. Comment (1)
Our view has always been that the Pioneer Discount stays for as long as those early customers have a contiguous service of any type of wire line broadband.
Comments (3)
Again, I've said for a very long time, Exetel needed to offer this product -- so glad it is finally here.
Now all those people you have nagged to move to ADSL2 when they are at "enabled" exchanges, but on RIM services, might have a hope of upgrading. There are many in non-rural areas that cannot get ADSL2 from any other wholesale provider, ever -- due to RIM or non-existent alternative equipment or "full" exchanges. So, your signups prove what I've been trying to tell you for as long as I knew that other ISPs were selling TW ADSL2 product. Many I know will not buy Telstra from them, ever and others still need decent plans like those now offered by Exetel -- static IP, uploads not counted, available other services at the right cost.... Many are anti-Optus [sloptus to them] as much as many are anti-Telstra. In this country there is a lot of "Holden vs Ford", "Telstra vs Optus", "Telstra/Optus vs The Rest" and "Liberal vs Labor" -- all of these have very strong idealogical (sometimes illogical) basis and bias. I could go on about the above paragraph, but I can tell you, I've owned Fords and Holdens, I've had Telstra and Optus product, I've sincerely and seriously considered Liberal over Labor. The NBN ..... well, I don't want the band-aid that the Coalition is offering, that would be totally wasted monies because all has to be re-done again later as the band-aid solution is not good enough and what's more, it's time frame is far too long anyway to be of any real use to anyone -- talk about total waste! The NBN2 (as you like to call it) has potential to top out at $26 billion dollars and is being run by a bunch of very talented people whom are well on the way to delivering beyond Tassie -- all that will stop them is a change of government. With NBN2, you'll do just fine in the "Telstra/Optus vs The Rest" camp and there are MANY people in that one. Comments (3)
In the meantime of NBN2, if the gov't doesn't change, many people can enjoy ADSL2 on a Telstra port from Exetel -- this is the best they can do and such product is very strongly welcome as the numbers are already suggesting.
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Bigpond's 50GB Liberty ADSL2 plan is not comparable to Exetel's TE-2D ADSL2 plan.
For one thing, it's NOT a 50gb plan, because Bigpond counts uploads. Even when doing non-P2P things, there is a significant amount of uploads being generated, and these will bite into any quota. Exetel's 50gb pk + 120gb offpk + not counting uploads, is significantly better value. And with Bigpond, you need to bundle other services to get that price. For me, this means I need to bundle an expensive mobile service which I would rarely use (in lieu of my $0/mth Exetel mobile), plus my wireline phone service (which I NEVER use) would need to be upgraded from Homeline Budget to HomeLine Plus, making it even more expensive for me. And I have to pay this extra money for a minimum of 24 months??? I'm not the cleverest egg in the carton, but I'm not stupid either, and I also have no need for their costly "added-on extras" Minimum cost for Bigpond's 50GB Liberty ADSL2 plan over 24 months is $2,397.60 (according to their product disclosure statement)... phone calls not included. My costs for 24 months of Exetel are... TE-2D = $1560 Homeline Budget = $502.80 Total = $2062.80... phone calls not included And I have the option of being able to cancel or move my internet service after 6 months to pursue better value if I want to. Whay would anyone want to choose Bigpond??? Comment (1)
Hi John,
I cannot believe that you are so out of touch with what customers have wanted. For those of us that have wanted adsl2 speeds but only had telstra as an option -- yeah you must have seen the signs earlier than this. We always new we would pay more, but we just wanted Exetel to give us the option to signup on the best deal Exetel could offer us. Many people didnt want to go back to telstra - me for one . If this has come as a surprise to you with the strong telstra adsl2 signups with Exetel then I think you need to talk to customers more. How has this got past you - blind freddy could see it - but then im only a customer. cheers bill Comment (1)
Until TW lifted the requirement to stop selling any other carrier's ADSL2 services it was never a possibility.
That happened less than three weeks ago. Comments (3)
My Dad (in Narooma) had a Telstra cold caller churn him back to Telstra without his consent last year which cost him $40 to reconnect to Exetel and postage to send their modem back. He will never so much as talk to Telstra again, let alone knowingly buy their retail product.
He'd be lucky to download 5GB peak and less offpeak. He'll change plan to your new ADSL 8Mb plans now the price is low enough and will probably go ADSL2 in the future. One thing I learnt while contracting and consulting... If you delivery what you say well and your price is "cheap" enough in your happy customers / clients eyes your competitors (even if giving product away) will never get the time of day. That is why I find your constant hand wringing about reducing prices a couple of dollars every few months questionable. I never knew anyone to change Telecom services for $5 a month. Comment (1)
Exactly, this is also a reason why pricing can be very good and still support the rest of the business including the agents program!
Comments (3)
John,
As someone who is also on an Exchange that can only get ADSL services from Telstra I too would love to move to ADSL 2, but as I'm a light user I'm hoping (assuming wholesale pricing permits) that you'll eventually launch a range of ADSL2 plans like your 8192/384 ADSL1 plans which cater to those users who want faster speeds but don't necessarily need larger download limits. Les Comment (1)
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