John Linton
Back in Australia to a cold, damp and (at 6 am in the morning) a dark day. Sometimes it's a nice feeling to come home but today wasn't one of those days - it felt sad to be ending a great holiday on the trip from the airport to our house in the early morning traffic. Anyway....all good things must end and it's past time to get back to work after the jet lag fades.
I read the Australian papers in detail for the first time in almost a month (having skimmed the on line versions while I was away) and found nothing dramatically new or relevant to our business in the financial press - if anything they were slightly more pessimistic than they were before I went on holiday with the exception that interest rates are predicted to be cut by 1.5% over the next 9 months which I suppose means something. - if only that "the inflation genie", contrary to Wayne Swan's hysteria at budget time, is either not "out of the bottle" or is back in the bottle or whatever nonsensical statement that was meant to mean. However those cuts will come too late for the people who have lost their houses via mortgagee sales which, according to the same papers, are up 40% over the same period a year ago.
Exetel had another record ADSL application day on Monday of this week which is good to get the new month away to an optimistic start so perhaps lower cost ADSL services are being 'positively affected' by declines in disposable incomes due to the higher grocery prices which seemed to dominate much of the three papers I read. and also the early morning TV 'news' program I turned on while catching up on the general 'mood' in Australia.
There were some bits and pieces in the tech sections that were of some interest.
The Channel 7 annual report contained no usable (to me) information on what their intentions are on using/developing the Unwired network they finished purchasing in December last year. We have a little less than one year to run on the initial five year wholesale contract term we signed in 2004 and we still have around 1,000 users on the Unwired network in Sydney although we haven't been actively seling the service for over two and a half years due to the actions of the then 'National Sales Manager'. If I had to guess, I'd say that Channel 7 wouldn't be interested in renewing any of their Unwired wholesale arrangements (assuming they still have any other than with Exetel) so we have less than a year to find an alternative service for our Unwired users. How a company (Unwired) in it's sixth year of operation can lose $A15.7 million on a turnover of $A22 million is a mystery to me - maybe the annual write downs on the spectrum licences make it impossible for such a service to ever make money.
When the current jet lag 'fog' lifts from my tired mind we will begin the final decisions on the HSPA plans to be offered in September 2008 and while a large percentage of the Unwired users, who download less than 2 gb a month, will have a 'natural' migration path should they wish to move to HSPA the other, higher download users, will not find HSPA suitable at this period of its introduction. I don't see any other WiMax type solutions becoming available (I see Commander has had no interest in it's attempt to, yet again, sell off its iBurst acquisition) so it's not likely that Exetel will find a migration path to another wireless service that could deliver larger downloads at a sensible end user price. I read the BigAir and Clever Comunications latest financial statements which were very positive but they have no residential solutions. A difficult problem wth no immediately obvious solution.
In terms of HSPA - we need to determine whether it can be, at this stage, a true current ADSL 'replacement' or 'competitor' rather than a useful mobile broadband service for business users. I see that '3' is pushing this concept with its new 7 gb offering but, based on myUK experience, I'm not sure this will turn out to be possible - at least right now. We will do some more extensive testing this month to see just what performace is deliverable (and where) and particularly resolve the latency vs games performance questions that were raised by the UK experience of 80 ms first hop traces.
I see that EFTel's share price fell to an historic low (4.7 cents) which means the company is effectively worthless and that TPG's share price remains below 20 cents while other comms share prices haven't changed much over the past month - Telstra's is at a 12 month high. At the current 18.5 cents the TPG PE (price to earnings) ratio is an amazing 2! (compared to Telstra's which is 16!). Hard to see why people aren't rushing to buy TPG shares at such a PE.
It's taken me more than three times as long as usual to write this rambling so I'll quit and wait for my mind and body to adjust to EST when hopefully I will be able to write and think more coherently.