John Linton I spent some time looking at the options available to Exetel in terms of continuing to provide ADSL1 services outside QLD, NSW and VIC yesterday. It seems to me that whenever I have settled on a clear direction for Exetel, or take some satisfaction in the belief that we have, again, safely navigated our small company through some tricky circumstances and can now have a slightly easier working life yet another very difficult problem presents itself. However, having overcome that pathetic and fortunately mercifully short, bout of self pity I did look at our various options.
The problem is a simple one - we have paid a pretty hefty price to Optus to back haul ADSL1 traffic from the ACT and the Northern Territories, Tasmania, South Australia and Western Australia to our Sydney PoPs to avoid the costs of settig up PoPs in those areas of Australia. Economically it wasn't very atractive to do this but it suited us at the time (April/May 2005) and, in terms of Queensland and Victoria, it did enable us to build up a financially viable customer base to open activate our own PoPs some two years later - in mid 2007 for the customers in those two States.
If Optus were to cease providing these ADSL1 services to Exetel over the next 6 - 9 months we wouldn't, at current rates of customer growth in those areas, have enough ADSL1 customers to do anything but lose money by activating additional PoPs in Darwin, Hobart, Adelaide, Canberra and we'd barely break even in Perth (because we have a growing SHDSL business user base in that city). The sensible financial decision would be to withdraw from offering ADSL1 services from those areas when/if Optus cease offering the back haul services.
In fact that could be averred by any reasonably financially competent person to be the ONLY decision that can be made. So that would be a 20 second decision making process instead of the three plus hours I spent on it yesterday.
I didn't achieve much in my hours of considerations but, courtesy of one reader's suggestion, and the usual range of the more obvious "triumph of hope over experience" ideas there seeme to be some reasonable things to work on. I worked out that, optimistically, we needed 2,500 ADSL1 customers in each location to operate at a profit – the only issue therefore was how to get an additional 1,600 ADSL1 customers in each loaction over the next 12 months.
Very simple really – despite only getting half that number over the previous two and half years and ignoring the fact that mobile data plans and ADSL2 have reduced the marketplace for ADSL1 already and will continue to do that.
All it needs is some 180 degree thinking and a lot of luck. So my current short list of actions to be undertaken starting within the next week are:
1) Put in place a much increased referral bonus for al current Exetel customers in those areas to recommend Exetel ADSL1 to friends, colleagues and family members.
2) Increase the commission to agents and add a sign up bonus of $50.00 a customer.
3) Find more agents in those areas.
4) Provide additional services in those areas that would increase per customer revenue.
5) Look for VISP opportunities.
6) Talk to Optus about ‘buying’ their ADSL1 customers in those areas.
7) Pursue the discussions with another ISP who approached Exetel about buying its customer base
8. Talk with Aurora about possible use of their new network in Tasmania
9) Talk with the Tas, NT and ACT governments about an ultra low cost public service and schools ‘package’.
10) Produce a new ‘killer’ business plan for small and medium business.
I think that with a lot more thought we will be able to come up with a lot more ideas than this brief effort produced and, in many ways, it will help all other aspects of our business to become much more ‘aggressive ‘ in promoting our services in all parts of Australia.
It wasn’t as hard as I thought it would be once you begin to dissect the problem and produce some month by month targets.
Like every thing else in life I suppose.