John Linton
I took some time, in my sleep broken, jetlag adjustment early mornings, to see what had happened since I left Australia a little over three weeks ago. I couldn't see any changes in the offerings of the larger ISPs or in their subsidiary services. Also, as far as I could see, nothing of interest had been reported in the telco oriented media with the same volume of informationless comment being made about the Labor NBN 'tender' as when I left with nothing to base the comments on and with no further progress being made.
It seems that, at least so far, that I was right in making the assumption that while ever there is the 'shadow' of the NBN there will be no innovation or even any quasi-innovation and we are in for at least a hiatus if not a 'full stop' in the improvement in delivery of communications services around the continent. I picked a perfect time to go away and try and re-energise myself as I don't think I could have found anything worthwhile to do in Australia until the end of July when the first month's results were available.
With the second month of the new planning period already two days 'old' there is a lot to do over the coming month to ensure that Exetel actually achieves its objectives this financial year which are far more 'ambitious' than those of the previous two years when we went through the required period of 'consolidation' that is required by all but the very best managed or, in some circumstances, most fortunate, start up companies.
A percentage of the 'hate comments' I get from writing this BLOG harp on how small and ineffective Exetel is compared to [insert name of their favourite ISP]. A typical example is, spelling errors and erratic punctuation and layout have been left unchanged, is reproduced below - the writer is the same TPG employee who uses different writing 'styles' and nicknames to look like different people (my guess, based on 'give aways' in the emails, is that it is one of two people who currently work for TPG in 'senior' positions):
"bloody idiot.
revenue means shit all.
u may as well quit, you have no infrastructure and nbn will take you down, your
getting old and useless
typical
this isnt hate mail, i just feel sorry for you competiting against the likes of TPG.
and WOW, you gain revenue by 20% an annum WOW, TPG does 200% growth and will
continue to expand at this level"
I have never claimed that Exetel is anything but a small and struggling start up company with a great deal to do each day just to survive let alone grow - a point that seems to have been missed by these sad people. However having had an increased 'barrage' of such comments over the past three days (goodness knows what has provoked this latest outpouring of venom) I gave some, very brief, thought as to what Exetel actually has accomplished compared to [insert name of ISP of choice here] over the brief 55 months of its existence.
I came up with this list:
1. Exetel is still in business which is more than 2,000 other start up ISPs which started up and then failed over the past ten years
2. After 55 months Exetel's monthly revenue of $A3,600,000 a month is larger than any other start up ISP over the past ten years (including TPG, iiNEt, InterNode, Netspace etc, etc at the same time of their ISP lives.
3. Exetel makes a month on month profit which is more than Optus, Vodafone, AAPT, iPrimus or RSLCom did in their fifth year of operation in Australia.
4) Exetel has no accumulated losses and zero borrowings having survived on the direct cash and guarantee investments of its shareholder/directors - in stark contrast to EVERY other ISP competitor
5) Exetel provides a range of services at lower costs than every other competitor in Australia which is surprising if they are so much larger and therefore have far better buying economies.
Now, those achievements, to date, may not be very significant and, personally, I have never claimed that they are. The point to those Exetel comparison disparagers is this:
They are significantly better, in every respect, than [name of ISP/Comms Company of your choice] achieved after the same period of time.
So, having got that off my chest - I returned to looking at the ways, in this period of stagnation, that the current Exetel services could be improved in price/performance terms. Having just re-negotiated new contract pricing for most major cost items which have now come in to operation there are limited amounts of things that can be done - one smaller provider has even now come back to us seeking to increase their contracted pricing - a sure sign of the times in one respect.
One of the objectives for this financial year is to improve the price performance, in terms of the charges paid by customers, by between 15% and 30%. This can clearly be achieved by June next year but the 'trick' is to see how it can be done progressively over the four quarters of the year. Lower IP bandwidth costs from March 2009 will be a big help for broad band services and lower telephone call costs, due to reater volumes, will also be progressively possible. However the major costs of broadband ports and back hauls is a very significant challenge.
Depending on how HSPA works out in terms of actual throughput over the 3G coverage areas it may be possible to begin to use different service 'combinations' to deliver greater value for some parts of the marketplace but I'm not sure of the extent of 'good coverage' at the moment nor do I have firm details of when higher speeds will actually be delivered and how wide that higher speed coverage will be.
Over the next week we should know more information on a number of 'under discussion' issues and it will become much clearer then. In the mean time our key challenge, and key opportunity, is to ensure the 'NBN Dark Cloud' is a minimal influence on Exetel's ability (small and insignificant as it may be) to deliver on the planned price/performance reductions to all Exetel customers.