John Linton .....far more than either of the past two years.
June continues to speed by and business remains very solid across all service categories but we are only making slow progress in terms of completing next year's business plan. We are getting closer to making some of the tougher decisions that need to be made, or avoided out of cowardice, and hopefully we will then be able to do the remaining work on time. While this is the main time each year we thoroughly review our financial and operational plans the past two plus years have been so much tougher than 'normal times' that we have had to constantly review our activities on a month by month basis for almost all of that time. The two issues we have been most unable to address have been mobile telephony and wireless broadband - we see the trends very clearly but have never been able to capitalise on them.
For those of you who read yesterday's blog you might have looked at this summary of worldwide trends:
http://www.infonetics.com/pr/2011/Fixed-and-Mobile-Subscribers-Market-Highlights.asp
where not only have wireless broadband users exceeded ADSL users for the first time but mobile telephony services are now reaching a level where they almost equal the number of people on the planet. These trends are widely known and have been for many years yet we have never been able to take advantage of this obvious growth over the years. We must try much harder in our planning and put much more effort in to our execution to grow these aspects of our business over the coming two years. Our problem has always been that we have never been able to find a 'unique' way of offering these services to market places dominated (obviously) by the carriers themselves. No-one at Exetel has been able to make any headway on developing a workable strategy to date and we really must find out how to do that.
One of the key issues we have to get right is how we address the 'NBN2' in terms of its limited roll out over the coming year. So far we have invested, for us, quite considerable money in the PoP in Tasmania which we wouldn't have done if it was not a requirement to participate in the initial 'NBN2' "trials. We have added a fifth PoP in Sydney to allow us to participate in the NSW 'NBN2' trials and will now upgrade our PoP in Adelaide to participate in the Willunga trial starting this month. None of these amounts are significant in themselves but they keep increasing and we will have to keep investing in equipment and connectivity throughout FY2012 that will see very little revenue from the 'trials' and certainly nothing like enough profit to pay for the amount of investment. It is one of the tougher decisions as, almost certainly, our preferred 'NBN2' strategy is to buy services from Optus, or perhaps Telstra, not just to reduce our own investments but to ensure we can offer a suitable 'entertainment' offering at a realistic price.
The other major set of decisions we need to make is how 'aggressively' we will invest in our corporate offerings and just how the corporate market will change over the coming year as more and more ISPs reach the conclusion that the residential markets are not going to 'turn around' in the coming year and have gone beyond the beating a dead horse stage. While I am tempting fate by saying we are very happy with the progress we have made in corporate and business markets over the past two years we recognise that our 'free ride' will be over pretty soon....as our competitors wake up to the fact that we are now taking 100 accounts a month away from them and that they will lose even more from that as our sales force continues to 'mature' as well as grow. Our current planning is based on more than doubling our current customer base over the coming year and while that will still only be a very small percentage of the total corporate market it will take that revenue (somewhere in the region of $A20 million a year from other providers. There will be a lot of changes over the next twelve months in the corporate marketplaces.
A lot to do in the coming three weeks.
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