John Linton
I don't know whether its the general financial and technology fear and uncertainty reaching such a level that people are being galvanised into action so early in the new year (instead of being away on long summer vacations) but there is certainly an amazingly high level of activity occurring in many sectors of the communications marketplace. The reasons I say this are:
Our order levels for the last week of December and the first two days on January are more than double what they were a year ago; which is a pleasant surprise.
Telstra actually completed the installation and correct routing of our second Sydney GigE yesterday which would be unheard of in other years.
Four suppliers called me about 'in progress' discussions all of whom said in their various different ways, when I expressed my surprise in hearing from them, that they were facing tough targets and really needed to get our business if it was at all possible before the end of January and they could make the current offers "much more attractive" if we could do that.
I received three calls within the space of two hours from companies I'd told to "go away" when they enquired about 'buying Exetel' in 2007 asking me whether Exetel would reconsider discussing some sort of 'joint venture' if in fact we weren't interested in selling our user bases to them.
I'm getting replies to my emails from a whole range of people we do business with or have associations with in a fraction of the time in which they normally respond when I had little expectation of receiving any reply other than an automated "I am away from the office until mid 2010....".
So it seems the horses have well and truly bolted in 2008.
I wonder why?
I usually take comfort when I work through the "Christmas/New Year" period that our competitors are wasting a month of the business year on their extended holidays and work part time/work from home routines allowing those of us who actually do real work to make progress against very little competition. It seems that something has happened to make a lot more people determined to use this 'traditional quiet period' to attempt to get the new year under way a month earlier than in the past.
Perhaps the increasing number of articles by sensible and respected commentators in the sensible and respected sections of the financial press about the likelihood of the USA sliding in to a major recession later this year and the negative effect that will have on all other Western economies (including ours) has spooked the financial controllers of more companies than usual? From what I pick up from both our accounting firms and our banks it seems that an increasing trend is for Australian companies to reduce their planned expenditures in terms of borrowings and leasing with the lenders increasingly reluctant to 'roll over' previous facilities.
I only make that comment because, for the first time, Exetel has been considering using lease finance to fund two significant projects and had reached the 'approval subject to final documentation stage' with our preferred bank. They approached us yesterday asking when we would be able to give them final figures on what amount of money we required as they said if we left it beyond the end of January not only would the interest rate be significantly higher the terms of providing the finance might well be a lot more stringent and the amount of money available might well be less due to 'bank policies'. Maybe it was just another 'sales ploy' to book the loan for this month but I got the impression it wasn't just that.
Interesting times, financially, ahead it seems. Maybe now is not the time to borrow money.