John Linton
.....and I'm not sure why that is or what to do about it.
With the latest US catastrophe (Bear Stearns, fifth largest investment bank going broke) forcing US interest rates down to 2.25% (don't you just wish) and the Australian stock market down 20% so far this year I'd have expected to have seen that magnitude of bad news reflected in most of the new orders/retention rates in at least some of the services and products offered by Exetel by now.
Not the case.
Heading in to the Easter long weekend and the various holidays associated with this time of year, I would have expected to see the usual slight downturn in order in takes negatively affected by the financial bad news that has been omnipresent since November 2007. However, a record January was followed by a record February and March (allowing for Easter) is looking pretty much the same - across all services and products. Taking in to consideration our own decision to stop selling the AAPT/iiNet based ADSL2 services (around 10% of our total new ADSL order intake) the orders remain strong and, within three days, the loss of the AAPT/iiNet ADSL2 orders has almost been fully recovered by a 10% increase in the other ADSL orders - despite the fact that this time of year generally sees a slight decline in orders received.
I know that there is nothing we have done to 'improve' our offerings in any remarkable way and I still see the targeting of our ADSL1 customers by Telstra and the appeal of TPG's 150 gb off peak downloads dividing up the churns away from Exetel at the same rate - but not increasing any more. Puzzlingly, I'm now seeing an increase in churns to Exetel to the highest daily rates for over 12 months.
What is going on?
Perhaps the 'resources boom' continues to provide so much money to so many people that the bad news just isn't registering?
Perhaps, in reality, there is no bad news other than media hype?
I'm beginning to think that we've been over cautious over the past three months and a down turn in the Australian economy isn't going to happen after all and we'll somehow be magically protected from the problems in the USA - despite the Australian share market falls. In the mean time it makes planning for anything more difficult as all planning has to be based on some underlying marketplace 'health' assumptions.
I see that 'luxury' new car sales in Australia are at new record levels which, apart from anything else, seems to indicate that some large section of people see no reason not to spend their money on non-essentials.
The restaurants I go to seem to be even more crowded than usual and the staff/owners with whom I have some acquaintance all say that their business is good - so spending on another non-essential doesn't seem to be affected. (I couldn't get a table at Sydney's top restaurant for my birthday on the Tuesday after Easter - always a very slow night - which means something).
Maybe business will remain good for the rest of this financial year at least?
So what does it all mean? I absolutely have no idea and I also have no idea of where or how to look to try and get some understanding of what it all means in terms of the types of businesses we are in.
Perhaps it would be better just to have an extra long weekend and forget about the whole thing? Seems to work for some people I know.