John Linton ......and one of the few good things is that supplier's metaphorical 'pencils' get sharper because they dont meet their business targets.
It doesn't take much knowledge of elementary business for a sensible person to realise that as business conditions get tougher weaker busineses fail and as weaker businesses fail the suppliers to those businesses take a one off write off of any outstanding debt and then a reduced monthly revenue as the failed customer no longer buys from them. This then puts pressure on their revenue targets and their profit targets.
The only solution, apart from lowering their targets (and suffering all the pain that goes with that), is to look for new business and, much easier to do, look to increase the volume of business that the remaining customers do - pretty obvious. The businesses that remain are dealing with the same 'market slow down' but are 'gifted' less competition by the weaker companies ceasing to exist and their customers having to seek new suppliers. Again - all pretty obvious.
So, Exetel, although a tiny buyer from our suppliers does have one advantage - we pay our bills in full and on time and have dealt with our main suppliers for getting on for five years and in some cases for over five years. While I wouldn't describe our relationships with our suppliers as fantastically friendly (we have had to endure some pretty outrageous slings and arrows over the years) they are generally cordial (with the exception of Telstra) and we do get some good deals every now and then when they particularly need to 'repair' their revenue outlooks.
For some time now, basically since the beginning of the year, we have been receiving more attention from several suppliers which we always assumed would lead to 'better things' over time and that has certainly been the case in some minor ways that has allowed us to, rather than having to increase our prices, be able to pass on reduced costs to our current and new customers in a continuing, small but steady, flow of additional 'content' and in some cases lower prices.
So far this year we have been able to:
Increase the number of free SMS from 20 to 30 on every broad band plan
Add 20 free faxes via broadband to every broadband plan
Increase the value of calls in the mobile capped plans quite substantially while leaving the price the same
Add a small data allowance to all mobile capped plans without increasing the plan costs
Reduce the cost of many overseas calls despite the problems with the dollar
Increase the 12 midnight to 12 noon included downloads fro 48 gb to 54 gb
Maintain the 12 hour 'off peak period' when so any other 'copiers' are decreasing their already less than useful hours
Increased the Pioneer Discount by $A2.50 per person
and now we have been able to slightly increase the 'peak' allowances on some plans while reducing some ADSL2 plan costs by $5.00 and $10.00 per month.
This has been made possible by two things that has characterised the difference between Exetel's way of operating and almost all other 'commercial companies' which are that we are not in business to make as much money as possible, only enough to ensure our suppliers are comfortable with our balance sheet, and so when we receive cost reductions from our suppliers we invariably pass those benefits on to our users rather than increasing our monthly profits.
I don't pay much attention to what other ISPs in Australia do but I haven't been made aware that there is much end user price reducing going on and there isn't a shadow of a doubt that all of the much larger ISPs than Exetel would have been 'given' the same or much larger cost reductions from their wholesale suppliers which are pretty much the same suppliers who supply to Exetel.
So - good news for Exetel customers (perhaps the accusations of being very poor at looking after our customers have some holes in them?) and hopefully the tough times will produce lower communications charges for end users across the board.
I mean - all these other ISPs are SO superior in their service offerings to their customers they would have to pass the current round of cost savings on wouldn't they - I'm told that they treat their customers so much better than Exetel does - of course those statements have some degree of lack of credibility based on the sources.