John Linton ......or just plain stupid?
I had a call earlier this morning from my UK (actually USA but now based in the UK) previous work colleague from antedeluvian times with whom I have been exploring the possibilities of selling HSPA services in the UK and, perhaps, other EU markets. Since I first raised the possibility of starting some sort of joint venture in the UK I have personally, and Exetel has as a company, learned a lot more about what we might and might not be able to do in terms of HSPA - at least in Australia and therefore have some more factual understanding of what may be possible for us to do somewhere else.
The picture painted of the current conditions in the UK during this morning's conversation were not very 'pretty' and, as I said to my friend, not the sort of conditions that I, or anyone else I know, would see as the ideal time to risk money and time in a start up venture. His view was diametrically opposite. He made the point that every type of business in the UK was struggling at the moment and the unemployment rates were rising very quickly putting enormous pressures on domestic spending and resulting in more people than ever looking for ways to reduce their expenditures - even their 'essential' expenditures (particularly in job hunting circumstances) like internet and mobile telephony.
My view that HSPA hardly qualified as "low cost internet" was met with a deluge of data relating to the current actual cost of internet in the UK where almost every "cheap" internet offer is so tied up with other telephony services that the "cheap" price of each service turns out to be not so cheap after all - a concept that I grasp quite well - and his point was that there was a rapidly growing percentage of total users who were finding their 'bundled services' option something they couldn't afford when they were living on their redundancy pay or in fear of having to in the not too distant future.
There was a lot more information/speculation in the same vein and a lot of enthusiasm for the "Five Pound Internet/VoIP" bundle I had initially discussed with him in July. With both his company's sales and those of other HSPA providers 'falling off a cliff' over the past three months he is faced with, as are his carrier suppliers, a lot of contracted capacity that isn't being used and a warehouse full of HSPA hardware (with more on the way) that there are 'no homes for'. I doubt that I was particularly high up on his list of people to call very late on a UK winter's evening where he was still at the office so the possible magnitude of his difficulties was probably greater than I had appreciated.
We ended up discussing various possibilities for some 30 - 40 minutes - which is an extraordinarily long conversation for me (and from what I remember for my friend too) and we left it that I would think about what he had said and call him on the weekend. I will continue to think about it if for no other reason than it makes basic sense and there are obviously going to be few more advantageous times to buy both HSPA minutes and hardware than right now in the UK. The original concept of getting Layer 2 access to an established HSPA network throughout much of the EU is also a 'once in a lifetime' opportunity which, together with the extraordinarily low base 'building block' prices and very generous finance terms make a very tempting scenario. Having said that the financial commitment and the risk remain very large and there is absolutely no 'guarantee' that the concepts that appear so logical now can actually be made to work.
However it is very tempting to consider how much the Australian operation of HSPA would be helped if we could cut the cost of the base 'hardware' by 75% in 2009 and how much better leverage we would have in Australia if we could combine some much larger UK/EU HSPA minute quantities with Australia's much smaller quantities. I'm not either stupid or egotistical enough to think that I can make something work in a completely unknown market in a foreign country that people who are already intimately familiar with both the markets and the methods of approaching the markets haven't done/can't do - which is my only reason for hesitation. Why don't they use the internet to market their services and why don't they more 'creatively' price and deliver VoIP over HSPA? Also why are they so apparently 'wedded' to their two main price points?
The original concept was five - ten pounds a month including something like 50 unlimited VoIP calls, very low mobile call rates and 1 gb of data with prepayment and top ups on line. HSPA sim and USB 'stick for 50 pounds up front (we expected most subscribers to already have HSPA capabilities). There were many permutations of this basic bundle but money could be made and there was no credit risk (everything pre-paid). If the offer could attract the desired numbers of subscribers with no conventional advertising and everything done on line via a web site (with all other support done in Sri Lanka) it could generate very respectable profits without any of the risks (and therefore 'cheating') that was/is an endemic part of most/all of the EU services offering large HSPA downloads at the 29.99 and 19.99 pound price points.
I can think of many reasons why we would be 'crazy' to devote scarce money and even scarcer time to some high risk venture 20,000 kilometers away from 'home' - all of them compelling and inescapably correct.
But then..........
....there are very few "once in a lifetime" opportunities of the magnitude that this appears to be and there is, at least with me, the irrational desire to try something impossible just because.....well....just because it appears impossible. I can probably 'rationalize' away all of the sensible reasons I can develop for not taking this risky opportunity - like most people I'm easily persuadable by myself when I want to be persuaded. However, I do realise these days that its long past the time to act responsibly and conservatively and that I no longer "wear a younger man's clothes" (thank you piano man).
One last throw of the dice?....very tempting.