John Linton
I was looking at the preliminary monthly revenue results for October this morning over breakfast, always a cheerful way to start the day, and while they presented a pleasing symmetry in terms of their increase over the revenues achieved in September other contributing trends were not as pleasing - and one was quite concerning.
The report that caused me concern was the report that tracks where Exetel customers go when they leave Exetel to move to another provider and that tracks where customers who transfer from another ISP come from. Over the almost four years these details have been tracked the results have always been relatively easy to understand and, on more than one occasion, provided interesting insights in to what was happening within other ISPs.
From February 2004 until quite recently these twin reports pretty much showed what anyone familiar with broadband provision by different companies would expect to see. Over that time they accurately predicted the demise of the smaller/badly managed ISPs with sharp spikes in the churn to Exetel report in the 2 - 3 months prior to their demise. Similarly they accurately tracked some 'groundbreaking' new offer by an ISP: like the 1500/256 for $29.00 from TPG in October 2004 and the introduction of TPG's subsequent 'unlimited 1500' plan - the spikes were always marked but short lived.
The concern to me this morning when I read the report, was the trend in customers leaving Exetel and moving to BigPond starting 3 months ago and becoming the largest single 'move to' ISP in October.
From the very beginning of Exetel until July 2007 the one constant in this report was that the majority of customers who transferred from another ISP to Exetel were from BigPond and virtually no Exetel customer ever transferred from Exetel to BigPond.
For the last three months that 'constant' has disappeared and BigPond is now the ISP that the largest number of Exetel customers transfer to and has dropped (from the largest by a factor of double that of all others combined) to only the third largest of the ISPs from which customers transfer to Exetel.
In the past the most favoured ISP to which customers who left Exetel churned to varied from time to time - there was never one preferred ISP. That has changed over the last three months and the change is so marked it must mean something; I just don't have any idea as to what it does mean.
Given the huge size of the BigPond customer base (around 60%) it was always logical that BigPond would be the largest source of transfers in.
The fact that Telstra was always so expensive meant that someone was unlikely to transfer back to Telstra if they were unhappy with some aspect of Exetel - and for over three years this self evident scenario continued exactly as expected.
Now it doesn't.
The number of customers transferring away as a percentage of total customers hasn't changed in three years by more than a few hundredths of a percent from month to month (an average of less than 0.3% per month) so the actual financial loss hasn't changed and is, and never has been, of any financial concern (of course it's a concern in terms of customer dissatisfaction but that's not what struck me).
While the numbers are small, they are evenly distributed across all States.
I'm sure it means something.....I must find out what that is.