John Linton ....possibly the hardest 'task' in commercial life. However I read this earlier today and, assuming it was accurately reported, pondered on what it means:
http://www.telegraph.co.uk/finance/comment/liamhalligan/8196283/Market-alarm-as-US-fails-to-control-biggest-debt-in-history.html
We started the very difficult task of changing the prices at which we supply residential services last night by advising our customers who use our bundled wire line and telephone call services that the call charges will be increased from 1st January 2011. The new pricing is still lower than the call charges made by all/most other telephone call providers for wire line services but, we well know, that any price increase of anything is always unwelcome. However we have kept our call prices the same for over four years and many things have changed since 2007.
We had hoped to introduce a new $60.00 plan that includes unlimited local, national and Optus CTM at the same time but although we have agreed to the terms for this service, Optus are unable to "put it in to their system" until some time early next year. We need to change the way we offer ADSL to move all plans to being bundled with the telephone line and call charges over the coming months which means no longer offering 'naked' ADSL and, almost certainly, not offering a 'BYO Line' service in the future. It is strange, at least to me, that so much has changed over the past two years that the 'naked' concept has been effectively killed off by the weird pricing that is involved in delivering it.
For us (and it may well be that we are appallingly bad negotiators) there is a $2.00 difference between an ADSL service that includes a functioning telephone line and a service that has the telephone line crippled. By the time you add on the support and unhappiness costs they are pretty much the same price....except the 'naked service has less functionality and moving to or from ISPs is a pita. So where's the benefit to either seller or buyer? There isn't any benefit at all; just some pointless difficulties. In fact, now that the carriers are offering included telephone call types within the price of the line it is more expensive to offer a naked service than it is to offer a full PSTN line service.
So.....EXetel needs to offer its 'naked' ADSL customers an attractive and painless 'upgrade' path back to a full service line which we think we can achieve at $60.00 per month for a lot of down loads and a fair chunk of telephone calls at no charge. Of course if a person makes absolutely no telephone calls (hard to see but possible I imagine) then this won't be of any day to day benefit to them but at least should they wish to transfer to another ISP they will find it much easier. For the people who only use their mobile to make telephone calls or use VoIP 'free' is still a saving over ten cents per call or whatever the mobile call is charged at.
So we will have to find very persuasive words to 'consolidate' our ADSL offerings from the current range of mostly money losing plans to plans that make some small amount of money. I don't know whether $60.00 a month including line rental is the way to go but it seems to be the logical 'number' at this time of the ADSL residential marketplace 'cycle'. The concept of $10.00 discounts from your monthly plan cost if you also buy an Exetel mobile service seems to becoming more popular and we are seeing how that can be extended to wireless plans of some type.
Telstra Retail have taught us a very painful lesson, we are obviously very slow learners, that in these difficult days it is essential to 'bundle' as many services as possible to be able to meet the ever lower individual costs demanded by residential users. Our old assumptions have been wrong for a long time now and have to change. Whether we can bring this about is problematical. How many customers we may lose in asking them to pay for a service that doesn't result in a loss to Exetel remains to be seen. It really doesn't matter - we can't continue providing services to residential users at a loss.
Even multi billion dollar companies find it difficult to balance costs with the obligations to deliver services:
http://www.smh.com.au/technology/technology-news/vodafone-customers-seething-over-dropped-calls-slow-data-20101210-18sev.html
It's much easier to make decisions when you have no choice.
Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46