John Linton
Some months ago I made the presumptuous statement that the immediate goal for Exetel was to double the number of sign ups for our broadband ADSL services. In July 2008 we will achieve that objective and, based on what I see now, we will more than achieve that objective in August and September 2008.
Of course, our current small volumes make no impact on the total wire line broadband market in Australia and even if we were to increase our sign ups tenfold it would make no real impact.
It does, for me, raise the question as to why prospective and current broadband users select the ISPs they do and what motivates them to do that. When we started up Exetel we subscribed to the lily pond theory of marketing that, essentially, posits that if you have the lowest cost service in any market that delivers the equivalent or better service than any other provider then, by word of mouth, you will in less than 7 years have 100% of any market you set your service to address. This premise is based on the FACT that price outranks every other consideration when every other aspect of a service is equal.
After 4.5 years it's pretty clear that Exetel has been able to deliver, consistently, the lowest cost ADSL service available in Australia but has yet to deliver the equivalent of the highest levels of quality across the key metrics that are used by potential users.
Part of this failure has been the buy pricing of the 'upstream' services we need to provide ADSL services and the other major failing has been our technological competence in integrating the constantly changing new technologies that make up the core backbone of the services.
Our ability to automate and to innovate has been a key contributor to overcoming our buy pricing disadvantages over the last 4 plus years and as our volumes have increased the buy pricing disavantage 'gap' has continued to decrease. This month (July 2008) has seen a major 'upswing' in our new and churn sign ups matched by an equal significant decrease in our 'move aways' which is highly satisfying to someone who is 12,000 miles away and has made no contribution to whatever Exetel has achieved over the past three weeks.
Our July 31st results seem likely to show that our new and churn ADSL applications will be double what they were in March 2008 while our churn/other loss will be less than 25% of what it was in March 2008. A very encouraging and, in many ways, surprising result.
Why has this happened? I have no real idea as we haven't changed our pricing materially in that time. It's obviously a combination of a number of initiatives we took in March which included:
1) An emphasis on ethical issues such as wildlife protection and environment consideration.
2) A new user benefit scheme
3) A different agent commission scheme
4) The 'final resolution' of the protocol identification processes in the P2P control processes
5) The addition of P2P caching with enough User - Exetel bandwidth increases to deliver this benefit
6) The introduction of the option of 'shaping'
Whatever one or more or mixture of these initiatives produced the very significant growth in new and churn sign ups is unknown to me. What will be interesting to see will be whether the trend upwards in daily sign ups continues. From my, personal and simplistic perspective, I can't see any reason for any person wanting a cost/effective broadband service selecting any ISP other than Exetel.
I do subscribe to the 'lily pond' theory of marketing and in my view I would expect Exetel to increase its daily new and churn sign up rate by a further 25% each month (compounded) from now until June 2009 - providing the Exetel network is adequately provisioned and maintained on a day by day basis.
This may well be the optimism of distance but I don't think so - as someone who is well aware of the problems that Exetel has faced each day of each month since we commenced in business I am more confident today than I have ever been of handling the difficulties inherent in providing Network services.