John Linton
.....and uniquely so and only in Australia.
I have been struggling to find some way of making ADSL1 services more appealing to customers as the inexorable increase in the percentage of ADSL2 to ADSL1 applications continues to reduce the number of new/churn ADSL1 applications we receive each day and the HSPA applications are moving in a similar direction. We have tried many different things to 'promote' new and churn ADSL1 business but have, largely, been unsuccessful in doing that. We have a cross over situation where we would very much like to grow our ADSL1 user base in those exchanges that are not already equipped with ADSL2 capabilities to ensure that our smaller PoPs have enough usage to allow us to increase the capabilities faster than we can by just adding ADSL2 users.
When we first made ADSL2 available (July 2006) there was not much movement in the relative percentages of the two services ordered each day - around 10% in the first 2 months moving to 15% by December that year. Over 2007 the percentage increased to around 25% and then through 2008 it progressively climbed to around 40%+. Two months into 2009 the percentage of ADSL1 applications has dropped to less than 40% of all broadband applications and will obviously continue to fall. While the 'net' application intake is not falling - it is continuing to slowly grow (excluding the HSPA contributions) - the falling 'contribution' from ADSL1 is something we would like to see slowed.
Part of that decline is, of course, because of Telstra's ADSL2 offerings on so many more exchanges and also their aggressive, a person less kind than me might say predatory, "special offer" campaigns on all their older ADSL2 exchanges. With El Sol's resignation yesterday there is, I suppose, some hope that his replacement will not regard wholesale customers in the same way (parasites) but any change in that attitude, assuming it happened, will not see any change for at lest twelve months in which time Telstra will continue to 'plunder' other ISP's ADSL1 user bases. Part would be the wider general acceptance of ADSL2 and the obvious
advantage of 'independent' ADSL2 pricing over Telstra's ADSL1 pricing.
And that's the major problem.
Even a tiny company like Exetel can buy wholesale an ADSL2 service at 50% of the cost of a Telstra 1500/256 service and at less than 30% of a Telstra 8192/384 ADSL1 service. Obviously companies larger than Exetel, or with their own ADSL2 networks, can 'buy' ADSL2 services at much lower costs than Exetel. This makes a mockery of setting sensible pricing for ADSL1 and ADSL2 services for Exetel because the slower service costs more for us to buy than the faster service. Something that I think must be unique in the history of commerce.
This is further complicated by HSPA which, as it becomes generally faster and generally cheaper, provides another faster service at lower cost than ADSL1. Because of current costs it isn't a sensible replacement for all ADSL1 users but it is both faster and lower cost for current 256/64 and 512/128 ADSL1 users and over the coming 12 months will present a very real alternative.
I have been looking at how to make more sense of the Exetel ADSL1 plans/prices for some time and especially over the past two days since I returned to Australia. No matter what I try and manipulate the basic stumbling block remains that the Telstra Wholesale prices for the base monthly connection are so much higher than an ADSL2 service there is no solution that I can see. Exetel definitely is not going to abandon its current ADSL1 users by making no further efforts to improve the ADSL1 service offerings and plans but the Telstra Wholesale pricing is impossible to get past.
With the use of hind sight it is obvious that Exetel should never have offered an ADSL1 service in the first place - but that isn't very helpful to anybody now - at the time it seemed to be the right thing to do. Until HSPA becomes a viable ADSL1 replacement we need to make our ADSL1 plans more attractive than they currently are. For most/almost all customers this means lower prices. It has defied any mental efforts that i have put in to thinking through this issue and I still can't see how ADSL1 can be made more attractive than it is. As far as I can see Exetel offers the lowest ADSL1 prices from any realistic provider and also offers more 'add ons' than any other supplier.
So if anyone has any 'break through' ideas on how to make ADSL1 more attractive I would welcome the input - I've reached the mental equivalent of a 5 meter thick brick wall that is a 1,000 meters high.