John Linton
One of the current issues with the Exetel HSPA offering for computer users is the need for the customer to buy an HSPA modem to connect to the service (there isn't the same issue for people connecting via a mobile handset of course). The cost, to Exetel, of an E169 is around $150.00 because we buy in such small quantities and because our supplier is still locked (understandably) in to the 'mobile hardware' mind set of using free hardware to lock customers in to long usage contracts - fair enough - it's a practice used by mobile carriers almost from 'Day One'.
It's a bit of a nuisance and certainly detrimental to some potential buyers and an issue that Exetel is working on in a number of ways - none of which has produced an answer as yet. If we begin to be as successful as we hope to be in generating the volumes of HSPA sales at the upper end of our estimates then we will 'take a deep breath' and order the 5 -10,000 units that will deliver a sensible price to our future customers. That decision, should we ever make it won't be until 2009. Until then the only way we can offer 'free' hardware is via the tired old concept of 24 month contacts.
While I was in the UK in July I was told that the laptop manufacturers were being 'encouraged' by the large EU mobile network owners (and subsequently the major US mobile carriers) to include HSPA/3G connectivity in to all of their new products either as an addition or by doing away with the current 'standard' dial up modem chip set (and therefore cost of manufacture). I read recently that this has progressed and that we will see the first laptops with HSPA/3G connectivity in the stores before Christmas with all new laptops including the feature as 'standard' by April/May 2009.
Perhaps the decision to include an HSPA connectivity capability rather than an ADSL capability is a further indication that ADSL is not seen as the major internet infrastructure now and that HSPA and fibre are the future of residential internet - then again, maybe its just a cost consideration. On balance I tend to think that its one more sign of a shift away from ADSL to other technologies and a consolidation of the move away from wire line telephony to mobile telephony and, logically, to VoIP over 3G. It could be that copper line telephony is in the late sunset phase of its 150 year life and copper internet isn't far behind in its much shorter life.
Doubtless the significant 'marketing opportunity' of HSPA enabled lap tops being sold in Australia in the 100s of 1,000s will be seized on by the 'local' carriers and they will be offering 'in store' promotions of their HSPA services to lap top buyers at some "unbelievable deal" price structure. But will they be able to do such a thing given their current 'marketing strategies' and there inability to actually support the service at a sensible level to the end users (based on all four carriers current support performance of HSPA - and if you don't believe me try calling any of the support numbers for HSPA services). Doubtless they will be working on this concept right now (assuming they realise that the lap top manufacturers are actually doing this which, I suppose, is by no means certain).
I have been considering approaching the major retail chains to offer an HSPA service as an 'add on' to any HSPA enabled lap top purchase as it would seem to me that it would be a logical thing to buy if you were buying a new lap top. However, as I know absolutely nothing about this type of selling and Exetel is unlikely to have the 'margins' to allow us to do it I haven't given it much thought since returning to Australia. However the recent media reports reminded me that it would be a sensible thing for some capable organisation to do and as I mulled over how difficult it would be I realised that it would be even more difficult for the carriers to do or their Layer 3 resellers - given that they are already selling their 'computer' versions of HSPA at what must be tiny or negative margins and are incapable of supporting the current volume of users they have attracted and consequently disappointed - only my surmise based on not too much information.
I was going to bring this up with one or more of the mobile carriers but on the two occasions that may have been appropriate, extraneous and non-business babbling got in the way of raising the subject, so I didn't try and discuss it - I must be getting old as I didn't do what I would have done in the past when such things occurred.
As we would need a lot of 'assistance' from a carrier to actually to turn this opportunity into a reality in the time available between now and Christmas and then ongoing I'm not sure that I can spare the time and go through the frustrations of putting all the required pieces in place and I know we don't have anyone else in the company who has the required experience and abilities to do it - so maybe a lost opportunity - at least for Exetel.
It makes you wonder though - with something like 5 million lap tops in use around Australia at the moment, just how many of those users will buy an HSPA service over the coming year? Almost all of them? 50%? Even 10% is 500,000 new HSPA users.
I need to re-think how to address this marketplace in a way that can't be duplicated by the usual suspects.