John Linton
I had an interesting 'chat' with a 'chain store' earlier this morning regarding selling our HSPA service through their Australia wide outlets. It's an interesting concept but only a few minutes of conversation were enough to establish that it would not be possible to put in to operation. The reasons were their 'standard' requirements in terms of exclusivity, 'merchandising', product packaging, stock holdings, discount from list and payment terms. It was an amicable conversation and I learned a great deal in a very short space of time so it wasn't a waste of time - at least for me - and the person I was speaking to seemed to be grateful for the 'knowledge' I was able to provide on some aspects of HSPA based on my very limited experience of the services we have been providing over the past few weeks.
One very interesting comment he made was that he had bought our HSPA service on the first day we accepted applications and his experience so far was that it performed better at his home and his office and in various places in between than the 3G service his organisations was currently selling and the other three services he had tried out over the past six months. He went on to say that after we migrated the services from the Optus Layer 3 to our own Layer 2 service last Thursday night there was a noticable speed improvement and there were an increased number of occasions when he reached sustained speeds of 2.8 mbps down - something he had never achieved on the 3, Vodafone, Virgin or Optus HSPA/3G services his company had trialled over the last few months and almost never achieved on the Telstra 'high speed' service.
Several of our other HSPA customers (plus Steve) have said the same thing.
He was curious to hear why we thought that might be the case, other than coincidence (with Optus upgrades to the locations he mainly uses or school holidays or whatever) but I had nothing to tell him as we have no ideas why it should be the case except things we have no way of really determining. We left it at that and I said I would get back to him if the situation changed or if he could change the commercial terms he was adamant about - not a likely scenario on either part I would think. It made me think though.
We will break a long held view on not using advertising at the end of this month when we put a full page ad into the October 30th edition of BRW. It's a very simple ad and a version is being used on our web site here:
http://www.exetel.com.au/special-hspa.php
We will run this ad in a number of other 'business' magazines between now and late November as part of a different approach to 'addressing' the business marketplace in Sydney and some regional areas of NSW and Queensland. Our decision to actually spend some money wasn't generated by this morning's conversation (obviously) but the more I consider some of the things that came up during that short 'chat' the more I think that HSPA might benefit from a completely different 'marketing' approach(es) to the one we have taken since January 2004. I think that HSPA will be something that will completely change Exetel over the coming 15 months if it becomes even half as 'successful' as I think it might.
In my long career in 'technology' selling there has only been one other time/product/opportunity of having a single product that was good enough in it own right to do well but was actually 'destined' to do spectacularly well because of the combination of a short time when the 'manufacturers' of the product were open to any views on how the product should be sold and there was not only no competition but the competition that existed was 'prevented' from actually competing. That was in 1978 - a very long time ago and a scenario that probably only I can remember - most other people in the industry then having now died, and the ones in it today would not have been born then or would be at some phase of their school education. If they were 'adults' in 1978 they would almost certainly not have been involved in the technology industry in any meaningful way.
Strangely, or perhaps not so strangely, it's going to be the 'pressures' that organisations like Telstra exert on small companies like Exetel that will accelerate the growth of HSPA and to a degree that wouldn't exist without such pressures 'backfiring' on the 'bullies'. An example is the haste with which we will now have to move to attempt to move our low end ADSL1 users away from Telstra onto an HSPA service - something we had not planned to attempt until mid 2009 we will have to now see how it can be done "next week". However that will be constrained by the pricing we can obtain for a suitable HSPA modem.
The 'foot print' of HSPA is much larger than that of Optus ADSL2 and therefore the number of current Exetel low end ADSL1 users who could benefit from an HSPA service is almost 100% compared to less than 50% for a, more expensive, ADSL2 service. This means, for the first time, we can genuinely offer a broadband service that uses no part of the Telstra infrastructure and therefore cannot be negatively affected by Telstra's high prices and constraining business practices. It's obviously something that has many 'challenges' but then so does anything worth doing. As it seems unlikely that Exetel will be alone in reaching this very obvious conclusion the 'pressure' that Telstra may try to exert will almost certainly not produce the results they anticipate.
However Telstra will not be the only influence that will accelerate the transfer of low end ADSL1 users to an HSPA or similar solution. I think a major driver will be the mobile carrier's policies that will try and prevent the use of VoIP over their networks and the pressure they put on the mobile hand set manufacturers will also 'back fire' in ways they haven't anticipated.
So a once or twice in a lifetime opportunity if we have the skills, courage and money to make it happen.