John Linton Business is winding down as it does at this time every year and the first of the Exetel personnel said their goodbyes yesterday afternoon as they left on their long or short vacations. We had our 'Australian' Exetel Christmas party last Friday and the Sri Lankan Christmas party was held last night though "Christmas' wasn't the theme in that largely Buddhist country.The traffic on Military Road is much thinner and most people you meet around North Sydney are visibly more relaxed - despite the very tough times affecting so many aspects of Australian life. Most of all I can tell it's coming towards the end of another year as both my body and my mind feel completely exhausted.
Yesterday was a very good business day for Exetel in terms of orders received - the highest December Friday in our 'life to date' and 30% higher than the equivalent day last year and high end business orders keep coming in well after they had well and truly dried up to a trickle in previous years. We will have a record December irrespective of what happens in the few remaining business days and also a record month so, at least so far, the toughening business conditions have not affected Exetel - at least as yet.
This doesn't seem to be the case for several communications companies who operate in similar markets to Exetel. I seldom/never listen to the constant stream of 'vicious gossip' that permeates the communications industry but I do try and make sense of what I read in the media and see happening on the various other 'views' in to this industry. Of course much of what is written in the comunications media, as with the media generally, is rubbish dreamed up with no or flawed research by 'reporters' with little or no experience or knowledge and less ethics - so I seldom take too much notice of things that are written without solid references and ascriptions.
I do detect just a scintilla of panic in several of the actions recently taken by several ISPs which, added to by some statements made by a major credit card company (admittedly towards the end of a highly 'convivial' event) and two suppliers (in the cold, hard early morning with no trace of conviviality), indicate that things for those companies are not going as well as they had anticipated. I could of course be quite wrong in drawing any conclusions from such ephemera and I certainly wouldn't go any further than to say that it apears to me to be very unlikely that at least three ISPs who, based on ther own assertions, are among the largest in Australia are not enjoying the same strong order intakes that Exetel has benefitted from over the past few weeks (in comparison to their previous months).
Whle it is largely irrelevant to Exetel how other companies are progressing, or not progressing, in the short term - I always try and look ahead to what may be occurring in the communications marketplaces generally to try and understand what changes we may need to make to any aspect of what we are doing and how we price and present our different services to the different market sectors we address. I think we have been correct in increasing our prices and reducing our capital expenditures and I'm also delighted, and more than a little bewildered, that the price rises only had a very short 'dampening' effect on order intake - and it is this strange phenomena that has caused me to take more notice of the 'whiff of panic' I alluded to.
Although we are a very small company our volumes are almost sufficient to give some sort of indication of how the 'ADSL market' is developing. We have only a tiny market share - something over 1%. However, if the ABS sourced figures are correct then over the past 12 month reporting period we accounted for around 3% of net new ADSL wire line services - more than double what we theoretically accounted for in the previous reporting period - a very unusual and quite inexplicable change; especially in a period where we significantly increased our prices. I realise the base figures provided by the ABS are 'rubbery' but they are relevant in terms of trend if not in exact quantum.
Maybe it's just the demise of PeopleTelecom quickly followed by the 'punch in the nose' to Telstra by their exclusion (permanent or temporary) from the NBN 'tender' and the deluge of "we're all right" "press releases" from so many different communications companies plus the stream of underlying comment from people who might well know what they are talking about that is giving these indications? It seems that one ISP will struggle to meet its December payroll and at least one other will have very unpleasant discussions with its 'financiers'.
Well it is the "silly season" and there are probably rational, and opposite, explanations of what I think I'm detecting. Then again, though I am often wrong, I have been known to be right on more than one occasion over the past decades.