John Linton The first day of the month has always been the most enjoyable for me since we started Exetel as it engenders a glow of satisfaction as I read the recurrent billing figures generated in the early morning and usually available just after I've scanned the business press but before the first breakfast coffee.
Today's figures, apart from being the 49th successive 'record month' out of 49, were especially pleasing as they are so much against what the public record seems to indicate as the state of the communications market over the past week with the latest reports this morning, including the huge write offs by Commander and their plans to fire 550 personnel, continuing the tales of doom and gloom in the industry generally.
I think I previously remarked on iiNet's 'growth' of 3% over the six month period 1/7/07 to 31/12/07 as being less that the rate of inflation. Exetel had a particularly good month in February in terms of new user sign ups which was reflected in the highest month on month growth we have had since the 'early days' a little over 4% compared to the previous 12 months which averaged 2.5% per month. The most particularly pleasing part of the overall result was the over 6% growth in business revenue from SHDSL and Ethernet services.
I fully understand that 'one month doesn't make a financial year' but it, nevertheless, is always pleasing to see something better than you expected and very much against a general trend. 2008, currently, is shaping up as a pretty decent fourth full year of operation for Exetel with every indication that the targets set back in July 2007 will be met in terms of customers, revenue and profitability - but there is still a very difficult four months to 'navigate' and there is no false optimism or complacency anywhere in this very small company about any aspect of the company's performance.
I remain very concerned at the constant churn away of customers from Exetel to Telstra and that concern was underlined by Bill Devlin's comments to one of my previous postings - if a long term, very happy customer (and recommender of Exetel's services) like Bill can be overwhelmingly tempted by BigPond's unbelievably low cost offers then I don't expect too many of Exetel's customers who are 'personally' selected to receive such offers to be able to resist them.
While the ratio of customers churning to Exetel as opposed to churning away fom Exetel is still 4.5 to 1 that ratio is down from 10 to 1 a year ago.
So I think that situation will continue to move against us as BigPond gets more obvious about what it's doing now it can see that there is unlikely to be any repercussions in the short term.
Offsetting any significant worsening of customer loss to BigPond 'marketing initiatives' is the lower costs of IP which will not kick in this financial year but will deliver very big bottom line savings from June onwards. Those savings are the equivalent of having an additional 5,000 ADSL customers without the costs of supporting a further 5,000 customers.
My other major concern, strangely caused by a competitor in the role of supplier (at third hand) is the increasing proviioning problems being encountered with Powertel/AAPT when they use iiNet DSLAMs for ADSL2 services. I saw the public record statements by iiNet about their provisioning difficultiesand have, over the past week, seen the affect those problms have on customers applying to Exetel when the use of an iiNet port is what Powertel decides to provide. Unless the issues are resolved by mid next week then we are faced with the difficult decision of telling Powertel/AAPT that we will no longer offer their services as the uncertainty of their use of iiNet ports is not something we can continue to deal with.
Powertel was the first supplier we contracted with (in January 2004) and I'll be very sorry to have to cut the relationship moving forward but that looks to be the most likely outcome of their inabiity, I woud go so far as to say uncaring unwillingness, to address what we see as very serious issues.
Nice to get that warm glow from the monthly billing report - it doesn't last long.