Wednesday, January 16. 2008"And this, too, shall pass away."John Linton I read in the financial press this morning that Rick Wagoner, the CEO of General Motors, was quoted as saying that the time of the petrol engined powered car is finally up. It stuck a chord with me because for the past few weeks, and especially over the past three days, I have been contemplating when, not if, Exetel's relationship with Telstra Wholesale will end and what has to be done to ensure the least possible damage of no longer buying services from Telstra Wholesale occurs to Exetel and its customers for whom we use Telstra Wholesale infrastructures. Most/all? major ISPs in Australia have made such moves over the past three years to a greater or lesser extent and certainly I've been under no illusions since the current American imports were appointed to run Telstra that it was only a matter of time before Exetel, as one of the "parasites", would have to do the same. While the nett number of our ADSL1 users continue to increase each month, that occurs at a progressively slower rate as the number of people choosing to use ADSL2 accelerates much more steeply. As I've previously referenced, Telstra's increasing selling of retail services below the cost at which Exetel can buy the same services at "wholesale" resulting in the churning of current Exetel ADSL1 users to BigPond simply underlines the longer term pointlessness of attempting to compete with a monopoly. I'm not complaining - simply acknowledging reality. Like Mr Wagoner, I don't regard major change as a bad thing and, apparently since King Solomon's days, it becomes obvious to anyone of any level of experience that constant change is a universal constant in the lives of men (and women of course - just getting trapped in the idiom of the Old Testament there for a moment). So being 'forced' to move away from Telstra is just something that was both inevitable and of no particular meaning or hardship - just another part of business life. I had hoped to be in a position of not doing business with Telstra Wholesale by now but, as always with difficult to execute plans, we have only managed to get to a little past halfway in this significant business change - Telstra still accounts for over 40% (down from over 80%) of our spend a month and around the same in revenue. If our dealings with Optus on the delivery of ADSL1 services had gone as we had originally hoped then we would be a lot closer to the objective of doing no further business with Telstra than we are now but - s*** happens irrespective of how carefully you plan. We will continue, slightly more optimistically, to plan to introduce an internet service over 3G/4G by mid 2008 which will allow us the first opportunity of offering an alternative internet and telephone service to our lower speed/lower download ADSL1 customers and we would hope that service will be available 'everywhere' in Australia and we could 'at a stroke' move around 20,000 current ADSL1 users to a faster and lower cost (and far more flexible) service and halve Exetel's purchases from Telstra Wholesale. Depending on the actual speeds available from such a 3G/4G service by mid/late 2008 it may be possible to offer a replacement service to the 8192/384 users and also the users who require more than 4 gb of monthly downloads but that is not looking realistic, at least at this time. Of course, that may become irrelevant if Bigpond continue to offer 8192/384 services at the prices being marketed to Exetel customers at the moment. I have always found it very strange being forced to do business with a supplier who describes me with such overt contempt and, in many ways, it will be better for the personnel at Telstra Wholesale not to have to to provide services to companies they despise - that can't be a positive thing for them as human beings and would inevitably tend to distort the ways they view things outside their 'business' lives. Before I became as cautious as I am now, I would have already ended the relationship with Telstra Wholesale based on what I perceive of their actions and attitudes - another price of the aging process; loss of confidence in your decisions. I really am getting too old for this sh**. Tuesday, January 15. 2008Is A 'New' Fibre Network The "Solve It All" Labour Claims?John Linton I read the various reports about the decision by Pipe to go ahead with commissioning a new undersea cable to Guam which was widely reported yesterday and I was particularly amused by the APC report on Senator Conroy's comments at the launch 'event': http://www.apcmag.com/7801/labor_to_make_broadband_announcement_in_weeks With Southern Cross commissioning a major upgrade last year and AJC doing the same late last year there appears to be a large surplus of internet connectivity cable already available and Pipe's adding to that surplus in mid 2009 or thereabouts will certainly add to the possible pressure on reducing prices for that part of the internet delivery networks. In one of the reports I read, and I can't remember which one now, iiNet was quoted as saying that the current cost of IP connectivity amounted to 15% of the total cost of providing an internet service. Internode was quoted as saying that if Senator Conroy's/Labour's promised domestic fibre to the node network didn't reduce current costs then any savings in cost that may become available from the new Pipe owned cable wouldn't make broadband any cheaper. I found both comments (assuming they are correct) very surprising as they make no sense to me. Let me take the Internode comment first. As I understand it InterNode has deployed its own DSLAMS to provide high speed broadband and therefore knows exactly what it costs to run cable to a Telstra exchange (around $A2,000 a month for 10 gbps). The published price for LSS from an end user's boundary to the Telstra exchange is $A2.50 per month. Using the new VDSL capabilities when they are available (which will be a whole lot sooner than any FTTN service) a large percentage of CURRENT users on CURRENT ADSL2 networks in Australia's capital cities and major regional centres will be able to get around 20 mbps for a cable cost of less than $A3.50 per month per 20 mbps user connection. I very much doubt that any new fibre deployment is going to reduce those current charges and may well not deliver a faster connection than 12 mbps in the foreseeable future. So Internode is almost certainly correct that the mooted 'new' fibre network may well cost a heck of lot more than the current higher speed network already does and is unlikely to provide anything faster for the foreseeable future and, much worse, will provide Telstra with more control over data delivery than it already has. Seems the quintessential government cluster f*** (every possible person is disadvantaged at one stroke of the pen and Telstra gets to perpetuate its monopoly on internet delivery to Australian homes). The iiNet comment that "IP fibre represents 15% of current Internet service delivery costs" falls in to the same category in a different way - and I note that there was no estimate of what the new Pipe cable would reduce that percentage to. Using iiNet's published figures (revenue and ADSL subscriber numbers) and using an estimate of what iiNet may be paying for IP connectivity to the current Australian purveyors of Ip bandwidth it's very hard to see how iinet's IP bandwidth contributes more than 10% to the cost of its currently offered ADSL2 and ADSL1 services - in fact I would think that 10% is a little high. I know that Exetel's current IP costs do equate to around 15% of our cost of delivering our mixture of ADSL1 and ADSL2 services BUT, and its a big BUT: 1) Exetel charge end users less for any comparable service which inflates the percentage of each element in the delivery and have far fewer cost elements (no marketing/advertising/corporate infrastructure/huge support costs). 2) Exetel are right at the end of our current IP bandwidth contracts and will shortly reduce the current IP bandwidth charges by 40%. 3) Exetel would buy less IP bandwidth than iiNet and therefore would not buy at as good a price as is available at higher commitments. 4) Once Exetel gets lower IP bandwidth pricing later in 2008 and completes its P2P filtering and caching implementations (assuming they are successful) the estimated percentage of IP cost to total cost will be around 8% (of our much lower end user prices) - and we will still not be buying at costs as low as iiNet would now be paying or would be paying in the near future to CURRENT providers of IP bandwidth. Harking back to the statement attributed to InterNode - the really large cost of providing internet services in Australia, particularly in providing ADSL2 services, is the port rental and back haul bandwidth costs from Telstra and Optus and AAPT (Powertel). Those costs comprise 75% of the end user selling price of an ADSL2 service to a small company like Exetel but much less, of course, to a company that deploys its own DSLAMs. All cost reductions are welcome but I don't see that Senator Conroy's proposed fibre to the node will do anything but INCREASE the costs of that part of the network and the likely price of IP connectivity from AJC and SX in mid 2009 are likely to be less, to the non "foundation member" buyers than will be available from Pipe at that time. So, if iiNet's comments are correct and Intenode's comments are correct the price of broadband can only go up with a combination of Labour's (Telstra controlled) FTTN/FTTH and Pipe's 'cheaper' IP will simply be around the forward pricing of the current IP providers in mid 2009 and will still not be a significant part of the cost of providing higher speed internet. Nothing to see here - move along. Monday, January 14. 2008Adding PoPs In 2008John Linton Towards the end of 2007 we also made a decision to begin building out a second PoP in Sydney. We had already activated a second PoP which we used entirely to connect our wire line and VoIP services to Verizon and therefore, understandably, we used Verizon's data centre services for this purpose. Our decision to 'build out' the Verizon based services was really forced on us by another carrier's 'policy' and we probably wouldn't have decided to build out a second Sydney PoP if it hadn't been for that circumstance of any size at this time and maybe not ever - but that's life. We have money in the business plan to establish a Perth based PoP and have considered whether or not we should establish other PoPs in, perhaps, Adelaide, Canberra and Hobart (but have made absolutely no plans/money provisions to do this). Our basis for establishing PoPs outside Sydney were driven partially by the future savings we could achieve (once enough customers were connected) for residential services but mainly because we needed to more rapidly increase the percentage of business customers we derived our revenues from and to do that we needed more 'local' facilities. The recent marketing activities of Telstra BigPond have made the wisdom of spending money on resources to deliver ADSL services to residential customers very dubious and the likely financial benefit of that decision must now be in some considerable doubt. However the planned growth in business services was always the major 'driver' for the additional PoP decisions and all the recent Telstra BigPond events have made obvious is that we need to accelerate our plans and redouble our efforts to make use of the new PoPs for business users. One of the key business reasons for PoPs in other cities was to make it easier to 'terminate' wire less business (the need for line of sight antennae) and telephone services (the need for locally terminated number ranges) and we are making some, slow, progress towards putting those services in place. Another reason for not only increasing the capabilities of the new Melbourne and Brisbane PoPs but of more quickly establishing other PoPs is the more we look at providing data services over 3G/4G the more aware we are becoming of the various pricing issues of 'geography' that we may be confronted with from various different carriers which was not something that had occurred to me in 2008 as it may have done in the late 1990s. The provision of IPTV and other streaming video services also makes it essential for more 'local' PoPs. The stronger than expected, by us, growth in ADSL2 is also indicating that it may be better to terminate that traffic in the State in which it originates rather than using the various carrier's own networks to transit the data to one or other of the Sydney PoPs and we'll need to better understand just where that growth is and whether the trend is going to continue by the end of this quarter. From what I'm now seeing this trend is very hard to understand and I really have no idea of what is happening and, worse, why it's happening. My current view is that, despite the very negative effects of Telstra BigPond's "new" residential "marketing" we will go ahead with the Perth PoP in the not too distant future and it looks more likely that we'll add further PoPs sooner rather than later though where they'll be is by no means certain with NSW regional locations presenting some previously unconsidered opportunities. Sometimes I wish there were less difficulties and far less decisions to make in running a small business. Sunday, January 13. 2008P2P Caching/UTube/HTTP CachingJohn Linton We are reaching the end of the second major part of preparing Exetel to handle the 'legitimate' use of P2P and handling the current 'illegitimate' use is very effective practice. I'm now relatively satisfied that its possible to not only reduce the costs previously involved in handling P2P traffic by 2/3 of the cost 12 months ago but it's possible to do that while delivering an overall much faster P2P service. We still have a few things to do to finally satisfy ourselves that what we set out to do was possible but, if everything goes the way it looks as ithough it should, then we will have achieved the objective of reducing the cost of delivering P2P traffic by 75% while doubling the average speed of delivery. I don't think anything we've done is particularly innovative other than we used really 'bleeding' edge solutions to accomplish it and I am still mildly amused at the 'hue and cry' (in some quarters) when we announced we were going to embark on this program. Some of the more puerile 'huffings and puffings' in US web publications were quite abusive. I also talk to the CEOs of the companies that we took a risk with when they had very little installed and am pleased that their sales have 'boomed' since Exetel 'pioneered' using their services in Australia. If I remember correctly, and maybe I don't, I think that many of the larger ISPs contributed to the streams of negative invective directed at Exetel for taking the very sensible actions it took 12 months ago to find a real and sustainable way of handling the changed network loadings that a growing use of P2P exerted on EVERY ISP's network provisioning as well as the global internet. Perhaps you might remember the holier than thou statements from some of the larger ISPS about how they didn't and never would "prioritise/de-prioritise" P2P traffic because "our networks are fully able to handle whatever P2P traffic we carry". How laughable and pointlessly stupid. As I continue to keep in contact with the companies that supply such products to Exetel as well as the others we considered I think it would be interesting for the users of ADSL services in Australia to know which, if any, ISP in the largest 20 DOESN'T use an Allot Net Enforcer or one of Allot's competitor's products My understanding is there is now NOT ONE. I wonder if I'll receive any apologies or retractions from those ISPs who while trying to denigrate Exetel for doing, as Basil Fawlty has been known to remark, "the bleeding obvious" - were frantically trying to find out how they could achieve the savings that Exetel was so open about saying were available to them as soon as possible. My guess is none. Exetel publicised its own use of the Allot products so openly because it was entirely in our own interests that Allot should survive and develop their products and the more customers they had the more likely they were to do this and do it more quickly. Giving away some free "confidential Exetel information" was the easiest way of doing this and so it has proved - with many Australian ISPs buying Net Enforcers following Exetel's widely publicised glowing praise for the financial benefits. Making those ISPs who derided the use of P2P filtering and then sneakily implementing it was also always going to be an added bonus as they subsequently had to admit they lied to their own customers while abusing Exetel - they are, and always have been a bunch of shallow, "follow the leader" charlatans. (Disagree? let me have your nomination for ANY innovation any of them ever introduced over the past five years) We have taken the same path with the implementation of the PeerApp P2P caching solution - widely publicising our use of it and making as much information as possible available to any ISP who cared to read it. Like Allot, PeerApp needs more sales to survive and grow and its entirely in Exetel's best interests to assist that happen if we can. We will begin the caching of non P2P content later this month with the activation of an Akamai server cluster which is mainly aimed at speeding streaming video such as UTube as well as providing the local distribution of many major software title updates. We are expecting that the Akamai cluster and/or our own mirror developments will result in our ability to provide movies and TV shows on demand much more cost effectively moving in to the second half of 2008 - but that is by no means certain. There are a number of new technologies/products now emerging (some even supported by the major copyright holders) that we are interested in bringing in to our network delivery systems and we will begin sending engineers to Israel and the US in the near future to get a better understanding of what could be used by Exetel. Saturday, January 12. 2008Identifying 'Weak Signals' Is The Difference Between Failure And SuccessJohn Linton I was jolted out of my semi-somnolent browsing of this morning's Financial Review when I was skimming an article (pp60 and 61) which used the phrase 'weak signals' in the context of finding a tiny dissonance in a large volume of information that would become the first indication of a major trend . I thought I had 'invented ' that phrase; not in any proprietary sense, but in that I had never heard it/read it before I began to use it some ten years ago to explain/justify some of my more outrageous (and let me be very honest - often incorrect) business decisions Any one who is responsible/partly responsible for spending money in business on directional change must absorb a lot of information from disparate sources before they 'sign off' on what has to be put in place. Depending on the size of the organisation and/or the 'power' of the decision maker the amount of information researched will vary enormously. It's obviousy pretty easy to make a decision that is based on following an evident trend and equally much harder to make a decision to do something either very new, with little or no precedent, or very new to the company that will undertake the decision. The hardest decision to make is to stop doing something that has been and is a very large part of your current business. In a side bar to that article headed "'Understanding Complexity" the second bullet point states - "The interactions are non-lineal and minor changes can produce disproportionately major consequences". The article, which fills two pages appears to be a distillation from a Harvard Business School seminar and, largely, contains the sorts of statements and 'insights' beloved of such pontificators. However read casually it's an interesting set ofviews and, in my case being jolted awake by the 'theft' of what I regarded as 'my property' I re-read it with more attention and it may be interesting to other people who have some interest in managing in difficult, constantly changing circumstances to get an overview of some current US thinking. I read fairly widely about the communications industry; both in Australia and around the world and I also 'pore over' the multiplicity of data base and other reports that we have put in place at Exetel over the past four years. I also 'converse' with Exetel's users and agents via the forums we put in place a long time ago and talk with current and past colleagues about things of mutual past or current interest. I've mentioned in these musings that I've been surprised by the change in churn away destinations by ADSL1 users from Exetel to, effectively only two other ISPs - BigPond and TPG. While the total number of churn aways remainsat the same percentage of the total ADSL1 user base it's been for at least the last 24months the change in destination is so marked it must mean something. For the previous three years the destination of choice for people churning away from Exetel was pretty evenly split between Internode, Optus, iiNet and AAPT and amounted(s) to 0.25% of the ADSL1 customer base per month. This compares to the number of people who churn to Exetel that varies significantly each month from 4 times the churn aways to over ten times. As the percentage of churnaways has remained constant for such a long time there was no immediate reason to be concerned about what I'd come to regar as a 'fact of business life'. It was only when I began to notice the change of churn to destination that I began to look at the churn to/churnaway trends more seriously. The first thing I noticed was that churns from BigPond remained pretty constant (as a percentage) but churns to from TPG had dropped by over 70% over the past three months. I can, sort of, understand why that would be. I can, also pretty much understand why the same amount of people churn away from Exetel as have done for the past 24 months. Because I have a 'grasshopper mind' (and I started this entry based on the phrase 'weak signals') I had re-read the email correspondence I get copied on or, occasionally get direct, from Telstra Wholesale in the context of the churn increase to BigPond. Nothing immediately 'jumped out and bit me' but in re-reading 2,000 or so emails received over the past two years I definitely got a 'resonance' (or should that be a 'dissonance'?). So the 'weak signals' that must now play a part in Exetel's future planning is that there is no future in basing any future busines aspects on using Telstra Wholeale services with the only doubt being the timeframe over which this will occur. I think it's clear that the current BigPond actions and those of TelstraWholesale are premised on there being a steep decrease in the business a small custoer such as Exetel will be doing with them. I've been wrong before - I'm sure I will again - but identifying 'weak signals' that are true 'early warnings' are a key part of business planning. I really hope GURUS is delivered on time and makes it much easier to concatenate disparate information without so much manual effort. Friday, January 11. 2008ADSL2 Over Takes ADSL1 In 'Popularity'John Linton This is surprising, in one way, because the combined total of exchanges covered by the suppliers Exetel uses to provide ADSL2 services is less than 500 with over 5,000 being available for ADSL1. Of course the ADSL2 exchanges are those with, by far, the highest percentage of DSL users and, depending on what you believe may provide ADSL2 services to around 60% of the total Australian population. I don't think that this change has occurred because Exetel is getting less ADSL1 applications than in the past - from the raw statistics ADSL1 applications per month have continued the slow increase month on month as they have for the past 24 months. It's true that more current Exetel ADSL1 customers are moving to ADSL2 with Exetel but I was referring to NEW monthly applications rather than what current users are doing. In those terms Exetel ADSL2 users account for approximately 20% of total broad band users after 15 months which is interesting but not spectacular. I've previously commented that there is a very definite trend for people who 'churn away' from Exetel to now basically only go to two other ISPs - 55% go to Telstra (an unheard of scenario in the past) and 40% go to TPG (again an unheard of scenario in the past). Looking at the 'profiles' of the users who churn away to TPG its obvious that they are high speed/high volume users clearly attracted to the newer TPG high allowance at very low cost plans. There is no discernible trend in terms of user 'profile' for the customers who churn away to Telstra except for one curious characteristic - they are closely related to specific geographic/exchange areas over time. That would seem to indicate that Telstra is conducting some sort of telephone/mail contact program offering some sort of deal to non BigPond users on an exchange by exchange basis or area by area basis. So, there should probably be an understandable drop in new ADSL1 applications given that, in the past, Exetel would never have considered that new users with some realistic level of understanding about ADSL (the ones who choose Exetel for the most part) would have chosen either BigPond or TPG as best meeting their needs - that has clearly now changed. So we would expect a reduction in new ADSL1 applications and that's probably occurred but been masked by the general overall increase in people around Australia taking up ADSL services. We would have expected to see our ADSL1 new applications drop due to the unbelievable "free this/free that" offer war going on between Optus and Telstra and, in terms of market share, that has undoubtedly happened However the rapid change in 'mix' between ADSL2 and ADSL1 is still a little surprising. If I had a choice I would select ADSL2 because you get likely faster speeds at the same price as ADSL1. However, at least for Exetel, the major reason for the change is more likely to be that the cost of activation of an Exetel ADSL2 service is either free or $50.00 less than an ADSL1 service. It will be interesting to see if this trend continues and what difference will be made when/if the cost of activating an Exetel ADSL2 service returns to the pricing charged to activate an Exetel ADSL1 service. Thursday, January 10. 2008LTE versus WiFi versus WiMaxJohn Linton As part of the ongoing attempt to find a truly usable and cost/effective alternative to wire line based data services I read all that I can find about the developments towards LTE, progress on deploying WiMax and WiFi implementations in the USA and in Europe. I'd have liked to have attended CES this year (and not just so I could indulge my addiction to playing craps with real craps devotees) but have had to content myself with getting the daily updates via email and sporadic phone call contact with a business friend based in the USA who was giving one of the presentations and with whom we may do business at some later date. If you follow the bits and pieces reported in the Australian and US telecommunications journals you will have realised that there are now many very seriously large communications companies betting their corporate futures on one of these three methods of providing 'wire less' data services and the progress/number of end users and speed of data transfer has made a tenfold increase since CES last year. I referenced the Nokia/Siemens live testing in Germany in a previous posting here and Intel's Paul Otellini's key note address on WiMAX and Intel's investments in its development has been widely reported in the Australian industry 'press'. The presentation yesterday by Broadcom on new developments in WiFi was similarly impressive in terms of how far WiFi has come over the past 12 months. I certainly don't have anything like enough knowledge to begin to 'pick a winner' between these three competing technologies but I'm immensely encouraged that so much real, and apparent, progress is being reported by so many large and influential development companies in both Europe and in the USA. This contrasts to the almost deafening silence from the huge wire line carriers (not unexpected) and the not quite as muted but less than fully enthusiastic statements from the mobile network owners - whom, I would have thought, have the most to gain from wire less data developments. If you add all the projected numbers up that are contained in the various presentations you get to a prediction that over 1 billion end users will use WiMAx/WiFi/LTE by mid 2009 for their main data communications services with all of those services also being used for VoIP voice calls. If anything remotely like that actually becomes a reality then most of the world, with the possible exception of Australia, Japan and Korea looks like moving to a 'full replacement' of wire line voice call and data communications services within 5 years. Undoubtedly a lot of things will change over the next 18 months but I'm definitely going to book to go to CES next January as I think it will be a defining moment in deciding what most small companies such as Exetel should aim at doing in the future. By that time the array of end user equipment and the likely connectivity requirements for a small company should be pretty fully defined. Meanwhile we will proceed with offering business users Ethernet type data services over WiFi within the next few weeks which will be the start of a gradual move away from wire line based data services, at least for business users, and will give our small company's limited engineering resources the practical experience we will need in the future if the current 'promises' become realities. It continues to look like 2008 will be a very, very interesting year. Wednesday, January 9. 2008Child Pornographers - Vermin To Be Treated As Vermin Are TreatedJohn Linton I'd almost got over my splenetic reactions to the pointless wafflings of people like Senator Conroy and the other Labour party twinks currently masquerading as a government of a country with a literacy rate above zero when I read this piece of nonsense last night: http://www.australianit.news.com.au/story/0,24897,23021828-15306,00.html While understanding that the silly woman who made the selection of idiotic statements quoted in that article had absolutely no personal knowledge of anything she was saying she not only doesn't help in dealing effectively with the scum who display and deal in child pornography she makes the task for sensible people in dealing with that societal disgrace even harder than it already is. Quoting "statistics" (that can only have been 'plucked' from someone's rear end) such as: "Child pornography is one of the fastest growing online businesses generating approximately $US3 billion ($3.43 billion) each year." AND "It is estimated that 100,000 commercial websites offer child pornography" AND "more than 20,000 images of child pornography are posted on the internet every week." may impress the local chapter of the Frenchs Forest women's weekly coffee klatsch but quoting figures without citing the research references belongs in 5th Grade 'debating'. Such figures, as anyone with an IQ bigger than their shoe size would realise, are completely impossible to compile and even using the word "estimated" before one of the figures is a total nonsense as there simply is no way of estimating any of the quoted figures. Of course child pornography being displayed on various web sites around the world is pervasive and could very well be increasing in number and degree of depravity exponentially to fill the needs of the insane, criminal and worthless people who display and access it. No-one, let alone people who manage ISPs, is/are going to dispute that web sites exist in profusion that are criminal and should be removed along with the criminals who construct and operate them. It just isn't the responsibility, and it's certainly not within the capabilities, of the management of ISPs to perform the policing and criminal detection and prosecution processes that quite firmly remain the elected responsibility of democratic governments. Exetel, like I imagine any other Australian ISP, would have no issue with 'banning' a legally constituted government agency's list of child pornography web sites. It is a trivial task and the cost of doing it is unlikely to be very great. Steve's assessment of the scope of doing this is summarised as: "If they are known web sites, so that they publish a list, it is quite easy - we just route those sites IP addresses to null0 on the border routers. It would mean someone would need to do that every time the list is updated. That will stop anyone accessing them who doesn't take the very basic step of using an external open proxy. If we have to prevent access to web sites based on some sort of real time block list, that is a little harder and we would need a server dedicated to that and put some work into a script to integrate it into our network operation. There are RBL programs for email and DNS to stop spam that have been around for a long time, so something similar for government censoring should not be too hard to arrange. Of course, RBL's, which everyone thought was a good idea in 1995, have proved enormously effective in the 11 years since - no one gets any spam at all now, do they. If some sort of content analysis was needed then that would need a device like the NetEnforcer with some specialist software would have to be developed. I would estimate a 1-2 year development time and a total cost of around $500,000 at least. I doubt it would be much more effective than the other two methods though. The problem is, the internet from its first conception was deliberately designed to get data through against all the efforts of an aggressive, determined enemy. The effort required to block data is vastly greater than the many, many simple and easy ways to overcome such a block. And no blocking method yet developed has proved very effective." What would that achieve in terms of reducing the amount of child pornography available on the world's web sites? Close to, if not actually, zero from what I can see. However, if a legally constituted democratic government agency actually knows the IP address of a child pornography web site (which presumably they have to do to be able to ask the ISP to block access to it) the question I want an answer to is this: If the IP address of a child pornography web site is known - why doesn't the government agency use its 'sister government services' (the Australian Federal Police/FBI/UK Special Branch/Interpol/whatever) to use that information to track down, arrest and punish the owners/operators of such sites? Exetel, like any other ISP, would instantly comply with any legal requirement to block access to a legally mandated web site list - it is as simple as loading the list into a core router/switching device. Obviously it would be equally simple, though more expensive, to provide a legally required list of IPs together with the names and addresses of the people who attempted to access those sites. The point is that would do close to nothing/nothing to stop the depraved vermin who trade child pornography whose warped and dangerous minds know slightly more than Senator Conroy and Ms McMenamin about using encryption to display and transfer their criminal images. Three bullets in the base of the brain for every paedophile will do infinitely more good than some pointless access list banning flim flam nonsense. Tuesday, January 8. 2008Should There Ever Be A New Fibre Network?John Linton As the time gets closer for the Labour government twinks to front up to their adamantly expressed determination to fund the ($A4.7 billion) roll out of a new fibre network to deliver fast broadband (whatever they think that is) it seems, at least to me, that such a venture (which was never going to be possible or necessary in the first place) using fibre technology which is already in its 'sunset' phase in terms of providing data to dispersed residential users and a new 'investment' in it at this late stage would be very unwise particularly for a country like Australia. I assume Senator Conroy can and does read about the technologies his cabinet position requires him to do, or at least some of his 'advisors' can/do, so they would have stumbled across the multiplicity of reports on the ongoing speed enhancements of 3G/4G services which, while still fairly limited today, continue to get faster every few months and are now stated as reaching the LTE 'standards' ahead of the scheduled time frames. Presumably articles such as: http://www.itwire.com/content/view/15859/127/ and the omnipresent updates in virtually every European communications publication (print or online) on similar developments in Europe, Japan and Eastern Asia have come to Senator Conroy's attention together with the added, massive financial windfall, bonus of being able to sell new swathes of 'spectrum' to mobile companies? Given that there are 4 mobile carriers firmly entrenched in Australia and they actually do provide real competitive pressures to Telstra (without having Telstra's 'dead hand' being able to control any 'wholesale' mechanism/trench rental) it surely would have occurred even to the apparently brain dead apparatchiks who 'advise' the Labour policies on telecommunications that it would be infinitely better to use the flexibility and absolutely 'Telstra Free' concepts of mobile tower delivery of fast broadband than to simply continuing to bankroll the Telstra wire line monopolies. The use of 2.6GHz spectrum which can be licensed by the Federal government not only to the current four major providers but also to any number of regional/small independent providers (with or without Federal government 'assistance') means that no-one is dependent, in any way, on Telstra and true competition is guaranteed as well as regional authorities (such as councils) being able to ensure they can provide broadband to their ratepayers if the mobile companies don't do it for them. With Nokia/Siemens stating that they expect to be able to deliver on the LTE standard within the next 2 years there is almost no reason that I can see why anyone would start a tender process in the middle of 2008 to eventually deliver "at least speeds of 12 mbps" to a limited number of locations by 2011 when you can have 30 mbps almost everywhere (and 100 mbps in most capital cities) where there is mobile reception today? Only the Labour party and their best buddy Telstra who contributed so much money and rhetoric to getting Labour elected last December? To me - the concept of delivering data via the Telstra monopoly makes as much sense as Conroy's other recently announced stupidity - "banning pornography via access lists" - both show total ignorance of a very easy to understand (most Australian 15 year olds seem to understand internet better than Conroy and his 'advisors') and commonly used set of technologies. It will be interesting to see what happens in Germany and the rest of Europe in the coming months as Internet-HSPA morphs in to LTE in an increasing number of 'live test' locations and whether or not Senator Conroy can learn to spell IP before he issues some sort of pointless fibre network tender designed to be won by Telstra. What would be best for Australian end users (and the commercial communications companies)? A new technology that can be deployed anywhere that isn't dependent on any other commercial entity and is subject to true commercial competition and is relatively low cost to add on to established networks? OR Giving Telstra $A4.7 (or would that actually turn out to be $A8 billion?) to continue to over charge for a slower than required service that is locked away from any competition because it contributed to funding the Labour party's recent election win? Really tough call. Monday, January 7. 2008"Joint Ventures" - More Signs Of Changing Times?John Linton The reason for the discussion, understandably, was brought about by more small companies than just Exetel looking for providers of mobile data services but running in to the problem of insufficient volumes to be able to make the commitments desired by mobile network owners. Having already had some serious discussions with an Australian network owner (which are still progressing) I have a pretty good idea what Exetel can currently commit to and over what time frame and also have some appreciation of what is going to be required over the next eight 'quarters' in terms of a viable market place offerings. I hadn't had any previous contact with the Hong Kong or Australian company but had been in sporadic contact with the US company over the past 6 months. I knew of the Australian ISP but had no real ideas of its size or capabilities and had never come across the Hong Kong company (which surprised me a little as I had looked at the Hong Kong VoIP providers in what I thought was reasonable detail) so it was an interesting set of conversations for me. Personally, I don't think any of the participants in this teleconference achieved whatever it was they were looking to achieve - I certainly didn't - with the possible exception of confirming what I thought I already knew - that reaching the target volumes required is going to be extremely difficult and that putting together some sort of 'consortium/partnership' is going to be only slightly less difficult. I did get some sort of insight into what the HK company saw for the VoIP market, globally, over the next 12 - 18 months which was quite interesting but of no relevance to Exetel. If what the other ISP was saying was even half true then I've seriously underestimated the size and future growth of that company (I'd never considered them as being anything but a 'bit player') but, from what they were saying they have as many DSL customers as Exetel and ten times the number of VoIP customers. So when the conference ended after around 45 minutes with none of the parties expressing the need for further discussions I gave it no more thought and while I regretted the wasted time I thought I had at least closed off another option. So I was surprised to get a phone call from the 'facilitator' while driving to the office this morning asking me for a meeting when he was in Sydney later this week. I asked for a meeting agenda, as I always do (and remain continually surprised at how so few people are prepared to actually provide a detailed agenda for a business meeting these days), and all he would say was "I might have a proposal that will really interest you". So I thanked him and said that while I didn't wish to appear rude I was too old to go to meetings where I didn't know who would be there, what topics were to be discussed and the time allocated for each topic and, therefore, what I needed to prepare/inform myself about to make the time worthwhile to me and to other people. I think he was offended but said 'his client' was a US minute aggregator (a different company to the one on the teleconference last week) that wanted to establish a presence in Australia and was looking for an established Australian company in telecommunications to JV their Australian establishment by providing hosting, bandwidth and other systems facilities plus helping in the recruitment of personnel and providing an analysis of various Australian market situations in return for 'favoured son' access to and pricing of their services. I was surprised and probably showed that I was taken aback - which I very definitely was. I tried to explain that I had no idea what might come from such a discussion, if anything, and I had no idea about what a small company like Exetel could contribute to their operations as we would have no idea how such services operate - which was why we want access to a major mobile network. He said that he was fully aware of Exetel's capabilities from the previous discussion and also from prior knowledge and he had passed that information on to his client who believed the time would be well spent. When I, again, expressed the view that Exetel had no real volumes of mobile minutes his response was that his client couldn't work with any company that already had a significant relationship with one of the Australian mobile network owners. So I'm intrigued enough to meet and interested enough to learn more about whether anything will change if the big 'minute aggregators' extend their operations more directly in Australia than is the case today. As this is now the fourth tentative 'offer' of participating in a JV since the end of 2007 I'm beginning to wonder what it is that other company's may think they see in Exetel that I don't see in either our own company or in the sorts of situations that these JV operations intend to address. Perhaps I'm too blinkered and am too used to fiercely competing (being forced to fiercely compete) for every last dollar of revenue that Exetel is missing out on opportunities that would benefit it? Sunday, January 6. 2008Some Difficulties Of Salary/Career PlanningJohn Linton Exetel, like any sensible company (but my observation is that 'sensible companies' in this category are very, very rare), takes a lot of interest in helping its personnel develop their abilities and acquire new skills so that they retain a constant growth both in terms of what they are able to do in their professional life and how they can increase their financial rewards. Sometimes, as with all other commercial companies that pursue these practices an employee reaches the conclusion that Exetel isn't providing the career opportunities or financial rewards that other companies can do and they leave Exetel to pursue their career at a company that better appreciates their talents and abilities or who is better positioned to pay more for their services than Exetel can/chooses to do. This is a relatively common scenario within the communications industry in Australia and any sensible employer factors it in to their planning. A less common, but from what I hear from my acquaintances in the industry and from my own observations is becoming more common, are employees who reach a point at which they are happy to stay, at least for the current tme, and don't want to push their learning curve to acquire new or better skill levels and therefore advance their careers at the same rate they did previously. Previously very uncommon, but now less uncommon than it once was, is the situation where an employee wants to continue in a certain career direction but the employer, for a variety of reasons: No current vacancy No current 'teaching facilities' Doubts about the individual's suitability/abilities Doubts about the individual's 'longevity' to make the investment worthwhile from the company's view etc doesn't decide to provide the opportunity. Another, from my personal observations, increasing scenario, is the inability of many highly intelligent and ambitious people to take a longer term (2 - 4 years) of their career in terms of understanding what their current employer may be able to offer them and, far more importantly, what some unknown future employer may be able to offer them. I base this on my own observations over several decades of employing new personnel and saying good bye to people I've employed and the applications for positions with Extel I've personally reviewed over the past year. Exetel, is a fairly typical example of a small start up company that, either by luck or something else, not only survives but grows rapidly enough to constantly offer new opportunities to anyone who joins it. This situation is duplicated by companies that already have complex operations and who for one reason or another, lose valuable staff therefore constantly offering promotion opportunities to other of their employees. In Exetel's case the remuneration development for a constantly high performing employee has been an average of 100% over 4 years (the notable exceptions to this are Exetel's directors who have averaged less than 5% a year over the past four years). Talking with my acquaintances in this or similar industries 100% remuneration increase over 5 years is around high average for an exceptionally performing employee in the last ten years. Obviously there are exceptions but really talented people in their first ten years in the communications industry are achieving that sort of remuneration increase. For employees who perform well but aren't as able as the truly gifted an increase of around 10 - 15% has been 'average' - if there can ever be such a thing - and this is based on what I've observed in companies I've worked for and what my current industry acquaintances tell me about today's business planning assumptions in their own companies. With constant pressures on margins and constant pressures on market shares delivering both career responsibility and remuneration expectations is now more difficult that it has ever been as far as I'm able to determine. More companies than ever before, at least in my recent experience and discussions, are actually actively pursuing policies of managing the amount of their total payroll downwards as a business planning assumption even when their business plans are based on significant revenue growth. How is this 'magic' being achieved'? That would entirely depend on individual companies and their individual circumstances but, at least from conversations I've had over the past three months with various senior executives in a variety of different sized companies reducing the total payroll amount is a high priority for 2008 and 2009. I've also been asked about becoming part of a 'select' group of companies to implement the concept of providing names of employees who might become 'surplus to requirements' to facilitate the 'out sourcing' of employees who haven't got an acceptable career path within their current employer and therefore could be approached by another company without the time and cost penalties of general advertising or, heaven forbid, using employment agencies. Exetel will be doing a six month review of each employee's career plans in January and it will be interesting to match the expectations with Exetel's abilities to deliver on them. Unlike my acquaintances we are in the fortunate position of being able, should we choose to, to pursue a steeper growth path than we have in the past (financial circumstances around the world permitting) but we also have more options in terms of how we do that than have existed previously. Saturday, January 5. 2008Would You Pay 66% More For The Same Service? I Wouldn'tJohn Linton Some seven weeks ago I wrote about an offer made via post with a follow up 'courtesy telephone call' to an Exetel employee. The offer by Telstra BigPond was unbelievably attractive and was, for a monthly charge of $A59.95: 8192/384 broadband including 12 gb of downloads Plus No additional rental for the telephone line Plus Free wireless modem Plus Free activation Plus 10 cent local calls Plus $110.00 credit on sign up Telstra Wholesale make no secret of what their charges for ANY wholesale service might be as they have always published EVERY SINGLE DETAIL of their base contract arrangements on their own web site and the details about the Telstra Wholesale monthly and activation charges for ADSL1 services to a prospective Telstra Wholesale customer can be found by typing: telstra wholesale adsl pricing in to your preferred search engine or if you don't want to bother the PUBLICLY AVAILABLE information can be found here: http://telstrawholesale.com//operationalsupport/contracts/ecra71.pdf or if you use the whirlpool site for picking up pricing information go here: http://forums.whirlpool.net.au/forum-replies-archive.cfm/631807.html So this means that a possible charge by Telstra Wholesale to a small ISP, using the publicly available price details published on the Telstra web site, would look something like this: 8192/384 broadband - $A57.20 (port rental only) Telephone line - $A24.95 (purchased from someone like Optus or AAPT or SPT) Connection from the user to the Exetel PoP $4.40 (estimate based on GigE charges set out in the published eCRA) So a wholesale customer who was charged what is stated in Telstra's published information would get charged something like, each month, $A86.55 for PART of the service Telstra BigPond sells to a retail customer for *$A59.95*. On top of that the small ISP has to pay for up to 12 gb of IP traffic which, for an average customer using 8 gb a month costs something like a further $A10.00 a month plus, of course, they have to pay the administration and support costs of dealing with the customer. And then Telstra Wholesale's published eCRA charge is an $A88.00 activation fee (given free to the BigPond Customer) and supply a wireless modem to the BigPond customer free which would cost a wholesale ISP around $A100.00. Then BigPond gives the customer a $A110.00 credit meaning that the Bigpond customer gets activation and equipment for MINUS $A110.00 but the small ISP has to incur costs of $A188.00 to provide the same service. Somehow I don't think that an Australian broadband customer is going to pay a small ISP $A100.00 for a service they can get from BigPond for $A60.00 a month and pay the small ISP $250.00 to activate the service compared to MINUS $A110.00 for BigPond to activate the service. I certainly wouldn't. People who re-read my random musings (should there be any) may notice that the content of this particular post has changed. That is because my employer, Exetel Pty Ltd, advised me that Telstra Wholesale had, via their legal counsel, objected to my previous wording as being 'mis-information' and my quoting of information they publish on their own web site as breaching Exetel's contract conditions with Telstra Wholesale and could result in 'many bad things happening'. While I'm amazed that my personal and meaningless random musings on a private 'blog' about what Telstra's public actions may or may not mean would even be read by Telstra's legal personnel I wouldn't wish to inconvenience my employer in any way so I've removed what I thought might have caused any 'anxiety' on the part of Telstra. I haven't removed the Telstra Wholesale costs of ADSL1 port monthly rental because that information cannot be regarded as "confidential" in any way and can be found on Telstra's own web site and on at least two other web sites that I found by keying 'telstra wholesale adsl pricing' in to Google. I'm also puzzled at how the random thoughts of a private individual can somehow be linked to a contract between commercial entities. So EVERYTHING said in this post, and all other posts on my PERSONAL 'blog' are purely my own random thoughts and do not represent any person's or commercial entities views in any way other than my own. (maybe this blog is read by more people than I thought) Friday, January 4. 2008Is The Communications Industry Run By 'Girls'?John Linton ......and I hasten to add that I use the word 'girls' only in the sense of the Hollywood stereotype of teen females being obsessed with gossip and bitchiness and having three daughters and a wife, and being a great admirer of femininity in all of its glorious aspects, no direct or implied insult to womankind generally is intended. My reason for making that comment is that over the past two days I have had: three calls from 'prospective buyers' four calls from 'journalists' eleven calls from suppliers/business acquaintances all, in one way or another either asking what I know about this or that ISP's current financial viability or asking me about Exetel's immediate plans for selling all or part of the company or merging/joint venturing with one or more other companies either completely or in some major activity. Being the very plainly spoken person that my genetic make up, upbringing and education imposed on me, I probably didn't get as much information as I could have/should have as to why people I seldom/never before hear/heard from should think they could call me out of the blue and try to obtain, if in fact there was any truth to the various scenarios they were suggesting, what would be very, very sensitive and highly confidential information. Among the things I am pretty certain, and I think I would know, are not going to happen/have happened are: 1. Exetel has not been sold to TPG's subsidiary Chariot 2. Exetel has not been acquired by Optus for non-payment of its bills 3. Exetel isn't about to merge with Dodo 4. Exetel hasn't sold 60% of its business to a "Singapore based VoIP provider" 5. John Linton isn't terminally ill and because of that illness isn't involved with Exetel any more Among the things I have absolutely no idea about, nor would anyone have any reason for believing I would have, are: 1. Whether or not Dodo has major financial debt repayment problems with Optus 2. Whether Eftel's withdrawal of ADSL2 offerings were caused by financial problems with Optus 3. Whether AAPT has sold its stake in iiNet to Futuris 4. Any likelihood of '3' being sold to AAPT/Telecom NZ 5. That Adam Internet (who?) will appoint an administrator early next week. I also don't know how many angels can dance on the head of a pin or the location of Atlantis. I get, sometimes, three 'business' telephone calls a day - more often than not I get none - I discourage all business telephone contact. I cant remember the last time in my business life I got 18 calls in two days, largely from people I barely know and in three case people I've never known. So if I got that incredible deluge of calls about 'whispers' (as one of the twee'er callers so quaintly put it) goodness knows how many, more sociable, people in this industry fared - their handsets must have melted. It would be interesting to know what/who generated the wild speculation that seems to have been generated in the last two days? Thursday, January 3. 2008Full Throttle Start To New YearJohn 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. Wednesday, January 2. 2008What Will 2008 Bring To ISPs In Australia?John Linton While it's very much a pointless indulgence/waste of time I have at the start of each year, for the past 6 years (since I first became involved with ADSL), taken a few minutes to look at the coming 12 months in terms of what I think will happen to ISPs (including Telstra) over the coming twelve months. I have to say that my 'predictions' have a pretty iffy success rate with as many being completely wrong as are basically right - though I have predicted some demises that didn't seem to catch the attention of the suppliers to them or the customers of them as early as the signs seemed to become obvious to me. The first thing I notice is that there are far fewer ISPs who are attracting attention (some tiny ISPs in the past seemed to make themselves noticed despite the miniscularity of their user bases) and the number of ISPs making any innovations also appears to be far less. Clearly then, the first observation has to be that 2007 saw a significant reduction in the number of organisations offering ADSL services which is easily explained by the fact that Telstra Wholesale ceased offering its 'virtual ISP' service and the two "largest" of the tiny ISP aggregators (WCG and Veridas) went bankrupt eliminating almost all of the allegedly 'hundreds' of small ISPs who were their customers from continued trading. So the 'lunatic fringe' ISPs have become a rapidly receding memory and the very large ISPs have grown larger. It makes it easier to consider but a lot less interesting. My random assessments of the 'top ten': Telstra Bigpond So Telstra BigPond (at least according to Justin Milne's current set of figures) has grown strongly and has also recovered a huge (12%?) market share over 2007. That's an amazing performance and, as I think I remarked in some previous rambling, extremely depressing. I think it's depressing because, if the claims are true, it means that so many Australians are truly stupid enough to pay the highest prices for the lowest value in the ADSL marketplace. I can see that it could be true looking at the analysis of where customers who leave Exetel are now going - over 50% of all churn aways are going to BigPond - whereas for the first three years of Exetel's existence maybe one every month or so would do that. So, whatever it is that BigPond is doing seems to be working (one of the things seems to be writing to Exetel customers and offering them 8192/384 ADSL plus unlimited free telephone calls at a lower price than TW offers Exetel a wholesale price for a 8192/384 port) and means that BigPond will be the major threat to Exetel, and I suspect other ISPs, in the coming twelve months. So it looks like Telstra BigPond will continue to use its inside information and its monopoly position to make providing ADSL services very difficult for all other ISPs. Prediction: Will continue to grow ADSL customer base and attempt to whatever they can to screw up all other competitors via whatever legal and obstructionist tactics they believe they can get away with (nothing new to see here - move along) Optus From what I can see Optus had a growth year and, based on its advertising spend, must have done very well in growing its total broadband customer base and its market share - so the two largest broadband providers have both grown their market shares which puts the way Australian customers see the other ISP's broadband offerings in a sad perspective. Of course, if I was a new user, I would find free activation, a free modem and 6 months free usage a pretty compelling sales pitch and one that can't be found beyond Telstra BigPond and Optus. So Optus will follow/lead Telstra BigPond down the ever more 'give away' path and will progressively bundle land line and mobile service give aways to attempt to maintain their market share growth. Prediction: Will grow ADSL customer base and heavily promote 3G broadband. iPrimus A sort of 'Optus Lite' in terms of market place impact and ideas (just identical copies of Optus). Their lack of a broadband over 3/4G service will be a major obstacle to overcome which is being compounded by their 'just too late' decision to build out a DSLAM network. The squeeze on falling land line rental and land line call revenues will make life difficult for them for the foreseeable future. Prediction: Will slowly lose market share and relevance in the Australian market place AAPT A sort of 'Slim Line Telstra' in terms of market place impact and ideas (just identical copies of Telstra BigPond). Like iPrimus they will be affected by the loss of land line and land line call revenue. What they do with their stake in iiNet will be interesting and it would be likely that they will be lot harder to deal with than Powertel were - in terms of their 'rights' under the wholesale agreement on the iiNet DSLAMs. Prediction: Will give iiNet a hard time and sell their stake to Amcom who will take over iiNet while AAPT continues to fade away until Telecom NZ finds a buyer for it. iiNet Having tottered on the brink of financial disaster they now claim to be 'debt free' (courtesy of selling off half the company to Amcom and AAPT) to raise money to bail them out. No problem - the share price is back in positive territory and the annoying Irishman based ads continued to spoil a visit to the movies late into 2007 which would indicate that they still have a major objective of growing as quickly as possible. Their problem will be that they are locked in to a DSLAM deployment strategy that has some significant doubts in terms of the longevity of DSLAM provided broadband being the preferred internet delivery option. However they have no option but to grow and their latest Telstra 'windfall' will provide enough money to make whatever impact such money can make in today's marketplace. Prediction: will be bought out by Amcom/AAPT TPG I'm never sure just how TPG is funded and where the money came from to buy Chariot so it's difficult to see what the actual TPG strategy has ever been or might be. If the few million dollars needed to buy Chariot came from retained earnings then the strategy is clear - TPG is a 'golden goose' that despite what anyone else may think delivers a handsome return to its owners and that is its reason for existence. If not - well I don't have the sort of mind that can be bothered to build hypotheses on zero facts so have absolutely no ideas. Like iiNet, it appears that TPG is locked into its DSLAM deployment and is vulnerable to any significant technology change to wireless type services. Over the past 3 - 4 months almost 40% of all customers that leave Exetel go to TPG so whatever they are doing is working in terms of customer acquisition. Prediction: TPG was a pioneer in the ISP industry and continues to survive, grow and, as far as can be determined, continues to make a lot of money. If it hasn't over extended itself on its DSLAM implementation 2008 should see more of the same. InterNode Continual statements of growth in customer numbers and employees and new premises all indicate a company growing rapidly and profitably. Prediction: Will need a 3/4G service to remain that way. NetSpace I never hear anything either positive or negative about NetSpace - to the point where I hear nothing at all. It's been around for a long time so presumably it will be around for a bit longer. Prediction: No idea. DoDo I can't believe, irrespective of their size (whatever that may be) that this company can stay in the ISP business. Prediction: Bought out by Crazy Johns or some such operator. Westnet It was obvious from the, pretty dramatic, price increases put in place by Westnet in 2007 that things were not all 'beer and skittles' within that company. It's addiction to 'providing the best service' (in itself a sensible 'go to market') via an ever increasing over hiring of personnel to provide what they define as 'service' will remain a mill stone round the 'corporate neck' that will eventually drown them. Prediction: Major personnel down sizing before June 2008 - bought out by iinet/fade to irrelevance. From my limited knowledge those are the only companies larger than Exetel that, in any way, could affect Exetel's plans for 2008. I think Exetel, as the smallest of the 'serious' broadband providers will have its work cut out to deliver on its plans in 2008 but, one advantage of being small, is that we are very quick to adapt to 'surprises'. |
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