Wednesday, April 15. 2009ADSL1 Just Doesn't "Go Away"John Linton I watched throughout February and the first half of March ADSL1 new/churn orders continuing their slow decline which I thought was the inevitable result of Telstra's ADSL2 offerings in more and more exchanges together with the efforts of those ISPs who had signed up to re-sell the Telstra ADSL2 service - plus the fact that I wouldn't expect anyone on an exchange where they could get ADSL2 to sign up for ADSL1 (not because of any speed difference but because of the lower price of an ADSL2 service.Our overall 'plans' are currently based on ADSL1 services continuing to decline as a percentage of total services to around 30% of ADSL services by the end of calendar 2009 and to less than 10% at the end of calendar 2010. Over the past two years these predictions have been pretty much in line with what has been seen on our own customer base and in line with the general comments by other people in the industry I talk with now and again. So it's been a little puzzling to me, a person who is often puzzled by events in Australian communications, to see the trend of well over two years 'reverse itself' in around mid March and by early April see new/churn ADSL1 orders getting close to total new/churn ADSL2 orders and yesterday (a record 2009 order day - partly due to being the first working day after the Easter long weekend) actually exceed the number of ADSL2 orders received for most of the day. When this began to happen I put it down to a slight aberration that is always likely to happen in any statistical examination of rough trends that 'suffer' from multiple stimuli but as it continued i have begun to wonder whether it is something more serious. As we are preparing to again offer ADSL1 services in Tasmania this 'trend' is welcome as we don't, at least as yet, have an ADSL2 solution for Tasmanian users though we are getting much closer to making that decision. I have tried to understand what has happened, and I realise that Exetel's tiny volumes aren't sufficient to believe there may be a general trend, and to guess at what we are now seeing will continue in to at least the medium term future. Personally I can see no reason for it at all especially when I do a rough analysis of the exchange codes the new order volumes come from and see no discernible pattern such as "mostly from non-ADSL2 exchanges" as logic would suggest. In fact the largest 'ingress' of ADSL1 orders are from three exchanges that have multiple ISP's ADSL2 DSLAMs. It certainly isn't because we have put in place more attractive ADSL1 plans - they haven't changed in basics for several months though the schedule of small changes and added benefits have been the same as for the ADSL2 plans over the first quarter of 2009. It also isn't because ADSL1 orders are 'cannibalising' ADSL2 orders which are steadily growing month on month. So there is nothing that I can determine other than the increase in the percentage of 'churn' versus 'new' ADSL1 orders - though I can ascribe no meaning to that other than the usual two main sources of churns to Exetel continue to increase their percentage of total churns. We were going to discontinue offering the 512/128 services to new customers by the end of April but we may need to re-think that now as there is a 'surge' in that speed as a percentage of total ADSL1 orders received where before there was a noticeable decline (we stopped offering 256/64 speeds almost a year ago and it crossed my mind that it might be interesting to re-offer that speed for a time to see if there actually is any current interest). Perhaps being a small company we feel the small 'bumps' in the road more easily than much larger companies with obviously much, much lager daily order inflows and this strange situation will return to 'normal' over the next week or so. One, too small to really call a trend yet but now quite evident, piece of data is the number of 'new' ADSL1 customers that are 'transferring' from other ISP's ADSL2 services back to ADSL1 with Exetel (and I can only assume that is happening to other ISPs). Now that is a circumstance for which I can't think of any explanation at all (price/download allowances/bundled telephone). This 'almost a trend' is happening on some exchanges where Exetel has ADSL2 so it isn't a question of these customers becoming disillusioned with their current ADSL2 ISP and being forced to move back to ADSL1 because there is no choice. Those situations truly defy understanding. I can't think of any situation where a customer would prefer a slower AND a more expensive service when presented with such a choice. So a bit of a puzzle. ADSL2 is now around 40% of total ADSL users and has been growing as a percentage of total ADSL users at a rate of around 1% a month - but that won't happen this month. What, if anything, it means for the near or medium term future is completely beyond me to work out but we obviously need to do some much better analysis. However, my view is that, even if we actually invested the time in doing such a detailed analysis we would get a set of figures but would still have no idea of why those customers made such decisions which is what we reallly need to know. In the mean time any plans we had for running down our ADSL1 business have been thwarted by 'market forces'. Tuesday, April 14. 2009Is It Just Me...Or Is There No Such Thing As Unemployment?John Linton It's nice to see that Goldman Sachs has had a very profitable March quarter and is making plans to begin to repay the US government its "bail out money". Similarly the other big US banks are reporting returns to profitability and upbeat forecasts so perhaps the "GFC" never did exist? Pity on the same page the WSJ reported that the US government was saying that GM should be allowed to enter Chapter 11 as it could see no way of providing the amount of money required to keep it operating in its current form. http://online.wsj.com/public/page/news-business-us.html So, for me and I imagine most other 'lay' people, the daily economic news remains as incomprehensible as it always has with a deluge of apparently either contradictory or meaningless information with no 'directional guidance' as far as our individual circumstances detectable. Is there in fact any 'down turn' at all in Australia? Sure the unemployment figures have risen but is that because so many jobs have disappeared or is it because the financial news has been so depressing for so long that a large percentage of companies have quietly begun to get rid of their excess employees that basically every commercial enterprise builds up during protracted periods of good times' like the last decade plus in Australia? My observations of working in this country for more than the past 40 years is that every company I have ever worked for and every company I acquired any knowledge of could, at any point in time, have operated just as well with between 10% and 20% less employees and quite probably far more (this particularly applied to upper and middle management personnel). So the current 5.7% unemployment level is neither here not there in determining whether Australia's economic outlook is actually any different to what it was ten years, five years or one year ago or even 3 months ago. Australia, as far as I have ever seen (and taking into account my lack of fundamental knowledge of how economies and commercial enterprises actually 'work') has comprised of commercial businesses (and of course federal, state and local government departments) that have an excess of personnel who do no meaningful/productive work by which I mean work that actually contributes to the efficient achievement of the organisation's end objectives. In even the most efficient companies I have worked in (and I include IBM in the 1970s in that list) I would estimate that no-one worked for more than around 50% of the time allocated to "working hours" with the rest of the time filled with meaningless (in the context of meeting corporate objectives) tasks and just plain 'waiting around' activities. In fact most, if not all, companies I have worked for actually fulfilled more of a Social Services role of providing unemployable, or at least people unsuitable for the jobs they were employed to do, with semi-meaningful ways of spending the alleged working hours and days of the week. I would find it impossible to think of an employer (including my very first job with Coles at Randwick who employed me to sweep floors, clean windows and move boxes) who didn't have far too many people for even the most mundane of 'job specifications'. In the 'old days' these obvious, even to a 17 year old, over-staffing practices were usually blamed on union interference (when I commented as a very young man/boy that their appeared to be too many counter 'sales' people and that for most of the day none of them had anything to do) I was told that as a BB (or whatever) grade store the number of people in each job category was set by the relevant union. However those days have long gone and in any event my subsequent jobs in the technology industry (or what passed for a technology industry in those days) certainly had no union involvement that I was aware of....but all of those companies had far too many people for the results they were obtaining. My observations were at the time, and they have never changed over the succeeding decades, that Australians didn't, generally, work very hard nor did the companies that employed them expect them to - which suited me fine - it was certainly part of Australia's relaxed attitudes to practically everything that very much appealed to me then and now. It also meant that people like me who got bored easily and therefore didn't want to work as much as wanted to do something with their time more meaningful than spinning out any task's completion for as long as possible did more than other people in the same position and therefore tended to 'move on' faster than more Australian 'culture' influenced people. I don't think anything much has changed except that every so often there is an 'economic slow down' that punishes employees of slackly managed public and private enterprises by depriving them of their jobs and therefore inflicting on those individuals, and the people dependent upon them, all of the extreme 'pain' of living without an income for some unknown period of time. No-one seems to learn from this cycle and the same companies that have laid off their 'excess personnel' will, as soon as circumstances permit, simply hire above their basic needs again until they repeat the process when the next 'down turn' occurs - or as it seems to me at the moment - the next down turn is said to be occurring although it isn't noticeable in many of the places that are acting as if it is. I have to wonder what would happen if so many companies didn't hire so far above their needs and therefore automatically creating positions within their organisations that are 'dispensible' and also preventing a proportion of the people they hire from ever becoming indispensible? Or, perhaps putting it a better way, abandoning 'over hiring' practices that automatically prevent people from truly progressing their knowledge and skills with another employer who has provided a 'real' position so that the organisation they work for itself becomes protected against 'economic downturns'. I don't seem to be able to phrase what I mean very clearly - but it seems to me that if every employee of an organisation was generating a share of the company's revenue and profit via their own activities then there would never be a scenario that made them 'dispensable'. Perhaps it's just that I don't understand the first thing about how economies or commercial organisations work - it would be the most likely explanation. Monday, April 13. 2009Yet Another Set Of Circumstances I Don't UnderstandJohn Linton We have received a number of requests lately to provide ADSL services to a number of small ISPs including three very small but reasonably well established (5+ years/5,000+ customers) providers. It would never have occurred to me that Exetel would be considered as some sort of wholesale provider (although we do provide services to several small communications companies who want to provide a complete range of services under their own 'band/name' and buy ADSL from us to complement their other services). Up to now, we have always turned such requests down with an immediate "we are too small to provide such services" one line reply but I haven't done that over this weekend for reasons I can't quite pin down. I'm aware of the various disasters (Veridas, TWG, M2) which in the past tried to build viable businesses by providing ISP services to tiny start ups which, for whatever misguided reasons, thought there was some point in providing ISP services in their particuar location at incredibly small volumes. The completely predictable end results simply reflecting one more triumph of hope over experience. Similarly the Telstra Wholesale 'ISP in a box' concept had a rocky 2 or so year ride before Telstra withdrew that concept and those customers tried to find new 'homes'. So, it's not exactly a concept where the financial risks are compellingly favourable nor are either the support logistics or the general operational issues. So ....... why the hesitation? I think it's the attraction, if that's the right word, of adding 15 or so thousand ADSL customers that is intriguing but the financial risks remain overwhelmingly daunting and, of course, there is very little profit to offset taking the financial risks....and then there are the real reasons why, 'suddenly', these sort of opportunities have 'surfaced' over the past week or so. I provided a price per circuit and a cost per mbps of dedicated connectivity and a separate price for dedicated IP which, to my surprise, was received very favourably along the lines of "that's better than they get now". As I had added a small, but not negligible, margin to Exetel's current buy prices that reaction is difficult to understand as I know how much 'profit' we make at our buy prices and we couldn't possibly make a profit at the costs I quoted to the broker. The situation is impossible to understand.While I obviously have no direct knowledge of what any carrier may charge any wholesale customer I am not so stupid as to believe that Exetel buys any better than anyone else and in almost every case, due to our small size, buys a lot worse than everybody else. In terms of ADSL1 from Telstra I would put very real money on the fact that we buy worse than every other ISP ecept the very, very small wholesale customers - assuming there are still TW customers smaller than Exetel. The 'broker' handling these opportunities is "not able at this EOI stage prepared to say who the companies are" nor who their current suppliers are so it's unlikely that we will respond in any way but negatively later today. What interests me is what sort of company could get to a stage of having what appears to be a viable business but then needs the services of a broker to find a replacement supplier of base services and would have such a restricted opportunity that they needed a broker to approach a company as small as Exetel as a possible supplier? I actually asked that question and was told that the 'ISP brokerage' business was at an all time high based on enquiry levels and he expected that it would be quite an interesting few months in terms of completed transactions. I found that surprising. Perhaps the more interesting question is under what circumstances are more than one very small ISP being 'forced' in to trying to find alternate 'up stream' providers and why would 'brokers' be considering companies as small as Exetel as being worth approaching? It makes absolutely no sense to me and, having briefly thought about it, I can't begin to think of plausible answers to either question. In fact I think it is so bizarre that I have to think that there had to be some other completely different rationale behind the approach(es). However I have no idea of what, if anything, might be a substitute for the "apparent" reasons for the approaches and I can't be bothered to think about it any longer. I'm sure its long past time for the owners/operators of small ISPs to pack up and move on to other more logical and profitable uses of their time - and by "small" I probably include companies the size of Exetel and perhaps larger - Easter Monday has never been a day filled with optimism for me....I don't know why. When you think about it ,the days, should there have ever been any, of small companies making sensible contributions to the needs of residential communications users in Australia are truly a thing of the past. I see little in the published offerings of the dozen or so more prominently 'thrust forward' communications offerings that differ from each other in any way at all - even slightly. It reminds me of the 'old days' choice bwhen flying in Australia between Ansett (before it disappeared) and TAA/Qantas - identical price per seat, identical flying time, identical take off and landing time and often identical aircraft. Where was the choice? Perhaps it's just one more 'landmark' day marking the passing of time that hasn't produced any really positive progress? Sunday, April 12. 2009Decisions Are Much More Difficult When Price Is Not A Factor.....John Linton ....and I'm surprised to have to admit that 'emotional' factors are influencing, at least my thinking, in making this particular decision. One of the decisions we have to make next week is which carrier(s) we use for IP connectivity over the 12 month period commencing June 1st 2009. We would normally have made that decision before now and are dangerously delaying it (in terms of getting new infrastructure in place if that is made necessary by the decision) for several reasons not related to the IP bandwidth itself but for the different 'other products and services' we buy from some of the carriers we are considering and also the issues involved in buying all of our bandwidth from the one carrier. While I, personally, have been dithering with my input in to this decision I have been interested to read the 'alleged' pricing that has been put forward by various commentators on the Krudd myth of a national FTTH network in which various costs of current back haul and IP connectivity are cited. I am under no illusions that Exetel's small size ensures we never buy as well as our much larger competitors so I was surprised to see some of the 'estimates' being bandied about by apparently well informed employees of two largish ISPs. Of course they weren't specific but their "estimates" were some 40 - 50% higher than Exetel pay today (not the immediate future) which, even allowing for 'generous rounding up' seemed excessively conservative. Perhaps they were both such inherently dishonest people they were lying for purposes that were completely unclear to me? Determining the end user price of internet services is mainly constrained, these days, by the basic rental cost of the connection from the end user to the local exchange. In the case of Exetel's ADSL1 services these costs are determined by Telstra and in the case of ADSL2 services are determined by Optus and AAPT. For Exetel's most used plans these port costs account for over 90% of the total cost of providing an ADSL1 service and over 80% of providing an ADSL2 service (in round figures). So the actual price of IP, which used to figure so prominently in setting end user ADSL pricing is becoming progressively irrelevant - at least up to a point. The other two main cost components are the back haul from the local exchange via the carrier's network to the Exetel switch and then the cost of IP (either 'pure' or 'cached'). The cost of IP traffic used to be much higher than the cost of customer back haul but with the contribution of Akamai, Pipe and PeerApp caching as well as the recent lower costs of IP the two costs are pretty much the same. Again, it's not easy to reduce the carrier's back haul costs as they have a 'monopoly' which is a stupid way of saying that they price an ADSL port based on various elements of cost which, of course, are soley involved with their service provisioning. The other key consideration, affecting the bandwith costs per user, is the average amount of customer downloads and, just as importantly, the peak download times. The average amount of downloads per customer has gradually increased year on year for the past 7 years and the 'curve' continues to gradually 'steepen'. In general terms the total customer IP band width requirements have increased almost proportionately to the reduction in bandwidth costs (at least across Exetel's customer base) so the progressively lower costs of IP bandwidth have only been sufficient to keep the total supply costs at around the same percentage as in previous years. The 'added value' provided by Exetel on its broad band plans is now becoming a more significant component of the total cost equation as we have moved to add real value that has real costs such as the SMS/FAX/VoIP call components. It is these added value components (and the ones planned for the future) that are making the decision on IP so much more difficult. While it's true we could buy these various components from different carriers and essentially their pricing is independent of the IP pricing it's my view that this is becoming less the case today (as our volumes, small as they are at the moment, continue to grow).In my opinion, based on nothing other than my own observations, the 'whole of business spend' has become the over riding 'mantra' for our larger suppliers. Right now - there is exactly $A1.00 per mbps between the four quotes we are considering for IP bandwidth - which makes price an irrelevant aspect of this particular decision. We could, literally, flip a coin to make the decision without the result affecting our ability to provide services at the lowest possible costs in any way - perhaps that's what we will do. But.....I am now seriously annoyed at the difference in trading terms apparently being provided to Exetel's larger competitors by at least two of our current suppliers - not because of my obvious inability to negotiate effectively (though there's probably an element of that) but that in providing such terms these suppliers are delivering a huge competitive advantage in terms of funding their promotional activities to our significant detriment. We certainly don't want better trading terms - I would regard that as almost criminally reprehensible for a small company as well as being very, very dangerous. However if our major suppliers are going to 'advantage' our competitors by subsidizing their pricing and promotional activities then why should we support the suppliers who are assisting our competitors drive us out of business? ...and yes, I can see the stupidities in that view......and yes, I understand there are many, many factors in setting a price for a wholesale customer and size of business is very much a component of that.......I did say that this simple decision making process was now affected by 'emotional' issues. It 'rankles' and I can't seem to get rid of that absolutely non-commercial view. Life used to be much easier than this. Saturday, April 11. 2009The Answer May Well Be "Blowin' In The Wind"......John Linton .......but not, at least as far as I can see, the winds that blow over Hunter Bay where I do most of my thinking. The first signs of 'trouble' in the very low end of the Australian communications market have become evident over the last two weeks although Exetel for the same reasons has had the best start to a month since we commenced in business in terms of new and churn orders received. That is because two different types of communications companies have either gone out of business or their "up stream" reseller has gone out of business and they have begun to switch their SHDSL and a small number of ADSL customers to Exetel - pleasing for our figures but worrying that it should be happening before there is any sign of Australia being affected in any way that I can detrmine. There has also been a new 'stream of enquiries' from 'brokers' and two very small ISPs asking for our interest in 'acquiring' other companies and ADSL1 and ADSL2 "user bases" - 4 in the four woring days of last week and three in the week before plus two emails today. We have also been approached by a 'broker' "on behalf of a major communications provider" on our interest in selling Exetel for a commercially sensible price. There was also a 'general approach' by one of our larger providers offering a 'third party's' services if any of their wholesale customers wished to discretelylook for a potential buyer of their company or if they wished to buy another wholesale customer of this particular carrier. Again, there was another large supplier to Exetel making discrete enquiries of whether I had heard any 'industry rumours' about one of their customers who had now gone pas their 'normal' 90 days payment patterns. 90 Days??!!! I have serious problems envisaging major carriers that allow trading on those terms which are pretty obviously 100% indications of insolvency. I don't regard any of these 'straws in the wind' as indicating any real problems in the overall Australian communications industry - the large carriers all remain very profitable (and charging the prices they do why would that ever change?) and the medium sized providers all give every indication that they might not be doing as wel as they once were but have no financial issues. So these small to minute companies would be unknown to anyone but their customers and their creditors and, perhaps, their bank contacts who bounce their cheques....certainly I had never heard of the two small companies who asked Exetel to take over providing to their customers and I have a reasonable knowledge of this industry. Perhaps because I have not been very well lately it did cause me to reflect on the stupidity of attempting to start up and then keep operating a small/tiny/minute communications company in Australia and just how incredibly difficult it has been for us to keep Exetel 'alive' in what were in reflection much easier times than exist today. This was made indelibly clear to me yesterday when I was told that another wholesale buyer of one of our largest providers sells 20 times more ADSL2 connections a day than Exetel does....with the humiliating follow up line "why doesn't Exetel become more like them and do what they do?" I will consider the implications of those two remarks (which I have to admit 'jolted' me severely) in the context of the other recent 'straws in the wind' over the balance of this long week end. Is there really, in fact, any point in operating a small communications company in Australia? The conventional answer is of course - no. The only reason you operate a small company is that it is just a step on the way to becoming much bigger and then even bigger and then......so is there any point in continuing to operate a company that has no plans to meet that criterion? I, personally, have had absolutely no interest in growing Exetel to any particular size (certainly to nothing that could ever be described as other than small) with my only interest in growth per se being to buy at better volumes (so we can sell at lower end user prices) and to ensure that each aspect of the business did not incur a loss by having too few customers/profits to cover the minimum capital investment and monthly operating costs of any particular location/product type. As I do much of the financial planning I have never put any figures down that didn't reflect month on month growth but that growth was and is always gradual and takes in to consideration the implications of larger customer bases and larger infrastructure costs as well as th whole raft of major problems of acquiring the management skills and capabilities needed for a larger company (of which I have been forcefully reminded over the past day or so). I was alway of the opinion that Exetel would need, eventually, to reach a size of around $A10 million revenue (with the revenue split over at leat 4 - 5 different 'streams' for the sake of 'prudence' - who is a very demanding female in business) a month to be able to make any real progress and that level of operation is still in the far distant future future and perhaps is in the too far distant future. We had hoped/planned to make signficant progress this calendar year and, while that still may eventuate, it is looking more difficult. If the price of becoming a "good sized customer" is becoming like (and therefore acting like) the example recently cited I don't think I'm 'up to the job' but then perhaps that's really Exetel's problem - I am not the right person to play a role in operating a communications company in Australia in 2009. While not becoming a "good sized customer" of ANY supplier has ever played any part in ANY planning or thinking I've ever done I do see that being even smaller than Exetel has certainly disadvantaged the small communications companies I referenced at the startof these meandering thoughts and Exetel's current small size definitiely disadvantages us (and therefore our customers) in our abilities to deal with at least some of our suppliers - it obviously also prevents us from getting 90 day payment terms which in turn obviously restricts us from doing what such fortunate wholesale customers are able to spend - they use their wholesale supplier's money rather than their own! I guess that's why so many of them go broke? So much food for thought....not very tasty food - it certainly has a bitter taste....but food never the less. Friday, April 10. 2009An Australia Wide Bikie Gang's Crystal Meth Factory....John Linton ....would do a millionth of the damage to Australian Society that the proposed "NBN Mk2" would do. (Actually I think I'll refer to the latest even bigger lie by Krudd as "SNBN" - being an acronym for 'Still No Broadband Now'.Then again perhaps it should be "YABBI" - 'Yet Another Broad Band Investigation'? I haven't seen any comments on the ABS internet industry figures in the technical/communications press or in any of the more general press which I thought may have picked them up given the semi-hysteria surrounding the recent non-announcement of "NBN Mk2". I suppose that irrelevancies like some semi-factual information has no place in today's Australia and opinion passing in the media. So I won't cite the actual figures as it seems that facts aren't of any use in commenting on the one source of 'independent' analysis of what the trends are in Australian's use of communications technologies. I say 'independent' because the ABS collects its statistics via sending out survey forms that are filled in by 100 "ISPS" and collated to show trends in usage of the different delivery service types and, in the case of broadband, the different speeds. Personally, and forgive the 40 plus years on interacting with the human race that has produced this result, I doubt that more than a handful of respondents to this survey answer the various questions truthfully - some because lying about anything is their natural method of dealing with issues and questions and others because their internal systems would make it difficult to easily obtain the information asked for. This means that the ABS statistics are unlikey to be really accurate but that they may well indicate trends more accurately than any other source in Australia. So the general trends the latest figures showed appeared to be would be what you would expect to see: 1) Dial Up user base falling towards below one million users 2) Increasing rate of wireless (HSPA) users 3) Growing but slowing take up of broadband 4) Faster take up of ADSL2 versus ADSL1 than previously 5) Faster migration of ADSL1 users to ADSL2 than previously So.....hmmm.....well, that's all very interesting.....but - who actually needs "fast broadband when you really think about it? Does anyone know any section of the Australian community that actually NEEDs an internet service at a speed of greater than a meg or so? I can't think of anyone who "needs" intenet connection at greater than a meg or so and I am a person who utterly depends on the internet for every aspect of the real things in my life and depends on supplying internet to tens of thousands of residential users and thousands of business users to keep my 'financial head above water'. I'm not going to debunk the childish list of applications that make "high speed broad band" essential to medicine, education and life itself" - if you cannot for yourself see why such statements are the purest nonsense then my few words aren't going to change your mind. Personally my view is that high speed, low cost internet should be dealt with in the same ways that bikie gang's drug factories and distribution methods should be dealt with - and for exactly the same reasons.....both addictions are destroying the youth and future of Australia as a society. Internet is a fantastic research and education resource and quite simply the ONLY way to run any sort of commercial and government enterprise - but that is not its main, or even a major use in this or in any other country - at least it isn't by residential users. Residential users use the internet for two main purposes: 1) Legally - to remove themselves from Australian society and what is important to Australian, or any other, society by allowing the weak minded and unconfident younger Australians to live in the fantasy worlds of WoW and shoot em up games or the even more dangerous demi-mondes of chat rooms and their new even more dangerous counterparts. 2) Illegally - to steal other people's property whether its credit card and bank account details or copy right material or anything else. These two uses account for most residential user's "need" for internet. The damage to Australia's society done by Crystal Meth is almost infinitisimal compared to the damage done by a home internet connection fast enough to allow a 12 year old to play WoW et alia or download pirate mateial or associate with "Avatars". Think it through - you will find NO reason for a government to fund an "NBN" and thousands of reasons not to do so. However can you think of a huge (more than the majority) secton of Australia's population that does need a major infrastructure project that will not only IMMEDIATELY lift the spirits of All Australians but is ABSOLUTELY necessary for the actual survival of us as a nation? As a reader of this blog commented a day or so ago - the ONLY massive infrastructure investment that should be made in this country today or any other day is the diversion of the super abundance of seasonal rainfall in the Northern parts of Australia to the water starved South of the continent. For 100 years the 'drying' of Australia has been talked about and various, some wildly improbable, schemes proposed to use the wasted and wasteful seasonal down pours to revive the failing water sources in the South. $43 billion might not be enough but it doesn't matter - whatever it costs would be money infinitely better spent than destroying even more of Australia's youth than is currently being done so Krudd doesn't have to admit to his lying, totally insane, election 'promise'. ...of course there's one other major draw back.......it won't win you re-election by lying to the electorate - the preferred process espoused by the current prime minister and so many before him. Whitlam, Hawke, Keating, Krudd Every single one a dud. PS: ...and it's not just me who thinks Krudd is even worse than Whitlam: http://www.theaustralian.news.com.au/business/story/0,28124,25317958-14743,00.html http://www.news.com.au/heraldsun/story/0,21985,25321014-5000117,00.html Thursday, April 9. 2009Tasmania...No Longer An Isle Too Far?John Linton Amidst all the huffing and puffing of 'NBN Mk2' (which I confidently predict will never be built, but that will wait for another day) we are slowly finalising our "return to Tasmania". Now, we don't have a lot of customers in Tasmania and because we have had to suspend providing new services in Tasmania for almost a year now we have got very little 'presence' there and have, of course, lost some of our customers over time as they have moved residences and we haven't been able to provide them with ADSL in their new locations. So, prima face, there is not a good business case for us to spend the money equipping a new PoP and paying the premium pricing required to connect the Tasmanian PoP to Exetel's main land network. In fact there is no business case at all based on the immediate future income/expenditure considerations. However that isn't why Exetel is in business and the future could look very different. We have only ever offered ADSL1 in Tasmania as neither Optus nor Powertel/AAPT offered ADSL2 (again for the same Telstra back haul cost reason). We will need to provide ADSL2 if we are to have any chance of making a break even on residential services. We have looked at doing this in a number of ways and have pretty much concluded that only doing it ourselves would make any sense but we will determine whether or not the imminent change of management within Telstra makes re-selling Telstra ADSL2 remotely feasible (I would guess not but it is something that needs to be determined). Even if Telstra became commercially realistic about wholesale ADSL2 costs to small wholesale customers the cost to Exetel is almost certainly going to be more than double what we could do it for ourselves and we would need to be able to offer the same ADSL2 pricing in Tasmania as we do anywhere else. Reducing our exchange to PoP cost to less than we currently pay Optus or Powertel for 'main land' ADSL2 services would allow us to absorb the much higher costs of terminating the customers data on Exetel's main land network and therefore we could achieve the same or better pricing. "Politically" speaking (in Tasmania) it may well be a significant 'plus" to be able to offer ADSL2 services in Tasmania at prices that are LOWER than are offered in other States - albeit only to people in the larger Tasmanian population areas. I think it would certainly get us some 'free press' to kick start our return to providing services in Tasmania! The latest gigantic lie by Krudd does affect this decision (not because it affects my view that NBN Mk2" will never be built) but because he has really painted himself in to a corner in trying to tie up the five Tasmanian federal electorates with more pig ever fitted in to a bigger wooden container than at any time in Australia's political history. By promising to bank roll a FTTH service to Tasmania's 400,000 or so citizens "to be started by mid-2009" he has created a problem for Telstra and everyone else who has currently put ADSL2 infra-structure into Tasmania (and there is not much of it). An electricity company such as Aurora does have the relatively easy means of quickly connecting all of Tasmania's residences and businesses to FTTH and federal money makes the cost problems that have prohibited this in the past simply "go away". Even the cost to the end user problem is going to be at least partially solved by Krudd needing to demonstrate that a FTTH service will be "affordable" though that, as they say, "is going to be the real trick". His creative accounting minions will be able to manipulate the numbers and that will certainly provide short term benefits to Tasmanian end users before the Auditor General gets around to looking at what he did. So, assuming that Krudd is forced to actually make good on his promise to fund the Tasmanian State government's Aurora roll out and that some end users begin to get switched on in the not too distant future there would appear to be an opportunity to become an Aurora/Tassie Govt/Krudd/Whoever wholesale buyer of services competing on a "level playing field" (and if you believe that you will believe anything). What should be true (oh dear - am I always going to be this naive?) is that a small company like Exetel would be able to use its better than anyone else's low cost operation to compete with Telstra et alia better than we have been able to do anywhere else in Australia by offering the lowest cost data services to Tasmanian residential and small business users. However that's all in a pretty unclear and totally undetermined future so back to reality. One reason for proceeding with our own ADSL2 services in Tasmania (should we end up deciding to do that) is based on the acknowledgment that re-selling Telstra's ADSL1 services is not exactly either financially viable or even appropriate to Tasmanian end users in mid 2009 and reselling the super high priced Telstra ADSL2 is not something that we have become cynical enough to do (unless the "new Telstra" suddenly prices its services correctly).So we have to find other services to provide to make the investment even marginally sensible - ADSL1 alone is simply not going to be sufficient. The other reason is that we would base a future Tasmanian business plan on business and government services for which we need our own DSLAMs in at least Hobart and Launceston (which currently are possible) and possibly Devonport and Burnie (which may not be possible). We would deploy standard ADSL2 ports in those locations for residential users but more importantly would deploy 10 - 40 mbps/40 mbps ports for business and government users. Well, that's the theory and it is a long way down the path to becoming 'reality' - the only issue now is taking a guess at if/when an FTTH in at least parts of Tasmania becomes a reality and what the likely wholesale cost to a small company like Exetel will be. Krudd's demonstrated record of telling the big lie and then moving on makes that more difficult than it should be but in this instance he has very little option but to be seen to deliver now he has been so publicly humiliated. If he doesn't deliver, then those massively pig containered 5 electorates may well 'swing the other way'. PS: I'm indebted to P J O'Rourke for so perfectly summing up Krudd's words and actions over the past 18 months: "Giving money and power to government is like giving whiskey and car keys to teenage boys." Wednesday, April 8. 2009
Krudd Try's A Mega Bluff To Save Face... Posted by John Linton
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Comments (14) Trackbacks (0) Krudd Try's A Mega Bluff To Save Face...John Linton ...for the failure of his first bluff to deliver on his sound bite election vote winner of an "NBN" ($A4.7 billion to 98% of the Australian population within 5 years becomes $A43 billion to 90% of the population in 8 years - after f***ing around for 18 months pretending they were almost ready to begin). Just remember I was the the person who "unkindly" said that the acronym "NBN" was Krudd-speak for "No Broadband Now". Krudd clearly is a devotee of the 19th century US political process of "when your first lie fails simply tell a bigger lie". Why do I say this? What would your estimate be of when Krudd and co commissioned this bit of fluff to be written (bearing in mind it was 'published co-incidentally with El Presidente's announcement that his BS about an 'NBN' tender had been found out to be a farce and had to be scrapped via his humiliating back down yesterday?). But not to worry the Australian electorate are so f***ing stupid they will fall for the new enormous bluff and there's only 18 months to the next election to maintain the bluff. While I have no real idea of how long it takes a technically illiterate bunch of public servants to select the appropriate 'consultants' to write the techo jargon and then hire another bunch of consultants to pretty up the presentation and then get the appropriate sign offs I'm guessing it was not in 2009. Which raises the question of how much of the NBN tenderer's time has been wasted going through the charade of making a bid under the original tender 'guidelines'? Like everything Krudd promises and then attempts to do, it's all smoke and mirrors using random quotes for support and glossing over any factual content. It follows precisely the methodology of every one of his other lies - no detail on time frame/no detail on costing - just wide blue sky generalisation. Anyone remember his first three 'promises'?: 1) The Ideas Summit (never heard from again) 2) The Kyoto Protocol (signed with immense self promotion and then abandoned without a second thought) 3) Saying "sorry" to some indeterminate group of people on behalf of another indeterminate group of people (street theatre with Krudd as the only participant and then 'back to business as usual) Froth and bubble in between self aggrandising overseas trips. Now, nine months after the NBN was meant to be already underway we have the squirming worm trying to make an abject back down look like some sort of personal triumph - totally sickening. ...and I actually agree that the structural separation of Telstra is one of the only solutions for Australian communications and that if money is going to be p***ed away by this jerk then it would be better spent on building infrastructure that employs Australians rather than being stuck in to poker machines and wasted by buying cheap imported liquor in bottle shops or making bikie gangs wealthier. But 'winging' completely un-costed (in any senses of those words) numbers like $A43 billion and "27,000 new jobs" is just charlatanism at its most barefaced. Krudd's increasing belief that he can get away with saying anything: "The "hand out of over $A10 billion to low income Australians will create 75,000 new jobs" springs to mind - is a terrible indictment of the Australian electorate's stupidity coupled with a mind blowing level of credulity. How does spending $A10 billion to create 75,000 jobs compare with spending $A43 billion to create 27,000 jobs? Krudd's ability to believe that he can say whatever he likes seems to have allowed him to 'depreciate' what the tax payer dollar now buys in terms of "new jobs" by an order of magnitude in one short sentence. No-one, and I mean no-one, could believe that either of Krudd's head line numbers in his back down speech yesterday could even reflect a scintilla of actual hard number crunching - even if they were taken from the bids of those dummies that have p***ed away their time and money helping "the expert panel" understand the magnitude of the task. So what to make of it all? Nothing has changed - Krudd's Labor party is clinging grimly to their tactics to obtain a second term in "power" by spending two generations of Australian's future income and lying outrageously about the time frames so that they can get close to the 'wire' before it becomes obvious to the Labor electorate that they have been conned. This will, partly, be at the cost of a total freeze on any innovation or investment in any sort of communications infrastructure by anyone in Australia except Telstra. (strange about that). No 'spade' will hit the ground in mainland Australia before pretty close to the next election, if it does at all, and the lawyers will get even richer with the various challenges that Telstra will make (though there is a more than reasonable conspiracy theory that says that Telstra 'did a deal' to get the NBN canned and in exchange for an agreed cash payment and ownership guarantees in the new "authority" it would submit a non-conforming bid to get the whole process abandoned meanwhile announcing the way forward by a mix of terrestrial and wireless technologies). In the mean time Tasmania will get some funding so that it can appear a start has been made and to sow up the 5 federal Tasmanian electorates at the next election which is sort of fine because Tasmania has been shafted by Telstra for 18 years and if Krudd can throw away billions on one small selection of Australians he may as well shovel some money to another selected group. (though, note the overt political cynicism in shoveling money at Tasmania where there are five federal electorates all of which have a propensity to 'swing' in federal elections whereas, a presumably similar bid for the ACT, which has an equal number of people and always votes Labor in a federal election didn't get the go ahead). Pig in a cask time starts before the beginning? In summary: Krudd's 'NBN' bluff was called and he had to back down in the most humiliating way possible.....make NO mistake...he had to admit that everything he promised was a hopeless lie and that everything that had been said by him and his cat's paw, Stupid Stephen, was pure BS from the first utterance - there is no other way of looking at it. Krudd lacked any form of 'gracefulness or self accountability' in his back down acknowledgment and simply substituted a much bigger bluff with time frames that mean he can get to the next election without having an even greater humiliation - on this topic at least. ...but then I may be completely wrong in my interpretation of the FACTs that have attended the last 18 months (including yesterday's) of this travesty of a government. PS: Although my lightening fast mind sees these things more quickly than financial journalists - eventually they reach the same conclusions: http://www.theaustralian.news.com.au/business/story/0,28124,25317958-14743,00.html Just what this country needs - another government telecommunications monopoly. Where did I put my retirement home application form? PS: Krudd makes Whitlam look like a fiscal conservative.....and look where that moron ended us up. Tuesday, April 7. 2009Will The Ill Wind Of The 'NBN' Blow Anyone Any Good?......John Linton ...apart from people who dig trenches? Well, on that basis (and realising that it really didn't matter who was going to manage the project) I bought some Leighton's shares over the last few days and have made a handsome profit as I figured that many people would pick Leighton as one of the beneficiaries of billions of dollars worth of trench digging round Australia and in any event their shares were pretty low and their past dividend policies pretty solid so it wasn't much of a risk. I also figured that with a realistic sized network already they would be a hot favourite to expand it to provide part of the backbone for the proposed network (rather than starting to build yet another set of trenches). Scattering around $A20 billion dollars over the coming few years can't do any harm to the people who get some of it though most of those will be multinational equipment manufacturers and 'consultants'. Companies like Leightons will get a fair bit of "construction work" and a fair bit of that will be in regional and rural areas so the old FDR 'work for welfare' concepts will get another run after 75 years - though the concept of out of work and unemployable merchant bankers trying to wield a pick and shovel in the blazing sun of an out back summer before returning to their mug of soup and their bed roll under a Coolibah tree is a bit hard to get your head around. And then, of course, there's Telstra.....what will become of Telstra if some entity builds a brand new national data network? I guess they'll still have telephone calls and copper lines to make them over. New CEO due within three months and, hopefully, a new chairman and a major board shake up together with some 'policy reversals' will make for an interesting month or so mid-year. Telstra has been brought to the brink of a true turning point in communications delivery in Australia by the American carpetbaggers who plunged this country in to communications hell based on their personal greed and woeful knowledge of the Telecommunications ACT and Australian politics - at least they've all gone back home now (or almost) with their ill gotten gains leaving Australia both financially and service delivery poorer. So the 'brave new world' remains a shimmering mirage but after a year long delay Stupid Stephen gets to become the scapegoat for whatever now happens - I was wrong - I didn't think he would last past September 2008; now who will Krudd appoint as ambassador to the Holy See? Can anyone really see him controlling a national infrastructure build? Maybe he is off to Rome after the announcement of whatever it is? I was going to take some time away from residential communications based on the hiatus that would ensue once the 'NBN' was given to some entity to make happen as I figure that very little will happen anywhere in communications Australia until the 'final selection' has some time to announce its implementation schedule and whatever legal issues arise from that are dealt with in the various courts - my guess was nothing much would happen for 12 to 18 months and I could do other more useful things while that reached some form of conclusion. That still seems to me the best thing to do and much of the work that we have done in residential plan re-positioning over the first three months of this calendar year has been based on those premises. We still have to resolve what we do in Tasmania - but that's almost done as long as the Government gets the money to build its own network as part of the NBN and get rid of Telstra completely - and we will continue to build out the Australian network based on whatever growth (or non-growth) occurs over the remainder of 2009, The main thing is the build out of the VoIP capabilities and the ongoing development of SMS and FAX and, of course, our continuing attempts at finding a way/ways of more rapidly growing HSPA and mobile. Personally, I need some time to devote to other things after spending virtually every waking second of the past five years thinking about how to keep Exetel alive and then continually growing in the various residential marketplaces we address. I have never been particularly comfortable outside the larger business marketplaces and I'm pretty sure I have no more to add to 'residential strategies'.....at least not until I recover some 'freshness' in thinking and also some interest in understanding how/if a small Australian communications company has any place in the "new Australian communications marketplaces of Krudd's grand plans" (perhaps that should be Krudd's grand back of the proverbial bus ticket scribblings). Perhaps Telstra will now become more reasonable to deal with - yes, I know.....and pigs might fly...but maybe the prospect of being 'broken up' will cause some re-thinking along the lines of "what if we had a wholesale operation and no-one came"? I realise that it is well beyond the boundaries of current fantasy but in these "Krudd's New Deal" reincarnation days it might just be possible. Who knows - perhaps there will be a sensible wholesale/retail communications market in Australia where variety and innovation replaces mediocrity and "me tooism"? What was that pink thing that just briefly obscured my window? Monday, April 6. 2009Why Does Australia Elect Pygmy Minded Vandals.....John Linton with the intellectual capabilities of pond scum and the ethics of a Mugabe body guard.... .........to address situations that require the education, experience, intellectual breadth and comprehensive understanding of the human condition with the requisite knowledge and experience to sensibly address the various issues that need such attributes? Why is Australia, alone among Western Democracies of the last 100 years, always cursed with intellectually bereft and ill educated mental midgets like Krudds and Whines whenever key decisions based on true understanding need to be made? Which one of the poorly educated, 'hubristic' goofballs currently masquerading as the federal government of Australia could sum up the current situation and the events leading to it as elegantly and as comprehensively as a casual visitor to Australia (who was not addressing political issues) who I, and many other people, had the vast pleasure of hearing make this address in Sydney in the later 1990s: http://www.ispa.org/ideas/obrien.html (I would put money on the fact that if a reporter asked Krudd who Horace was he would answer "Horace? ...Horace who?). ...and so Krudd returns, briefly, to Australia from the London Charade of G20 'r' Us where his soporific and puerile contributions at the furthest flung fringes of that waste of time and money, delivered in his now world famous public speaking style copied from the UK's "speaking clock" method of public articulation, were completely ignored to gee up the party faithful, and those members of the electorate who were stupid enough to vote for such a cypher, with his "NBN" announcement before he finishes emptying the piggy bank (better known as the consolidated national revenue) in the latest of his mindless p***ing away of Australian tax payers contributions to fund the pointless self puffery of his constant grandiloquent world tours. (Did he stamp his foot at a flight attendant this time because his slightest whim wasn't delivered within a split second?). As this is, at least theoretically, a blog dealing with Australian communications events, issues and strange happenings I have always assumed that the few people who might stumble across it would have some knowledge of the general topic of communications in this country. Therefore a reader would be able to use his or her knowledge of communications to be able to judge the competence of Krudd and his minions (Stupid Stephen, Whine and the Screech Owl et alia) on the two issues that currently relate to Australian communications - the proposed 'internet filter' and the about to be announced 'national broadband network'. (I'm omitting, for the moment, a group of people who decided that someone who didn't finish high school should be in charge of the highest spending of all government departments in securing the overall safety of Australia and selecting an ex-pop singer to protect the environment for future generations, the amazingly dumb about to be put out to grass TV show hostie - Chalk M'Cue together with.....but fill in the rest for yourself). By now it would be obvious, to anyone with anything not far below a few snags short of a barbie in the old thinking processes, that the Labor party's combined intellectual and experiential competencies bring to sensible government what a kindergarten class could offer to address bringing a lasting successful political and humanitarian solution to Zimbabwe. While I realise its theoretically impossible, it seems to me the combined IQ of the current federal cabinet is actually a minus figure. So....what will the decisions be on filtering the internet and a government funded network? About the same as the implementations from Krudd's first prized piece of idiocy - "The Ideas Summit"? - hey, isn't that going to be implemented by now?? It really doesn't matter now because the processes have been so screwed up by the morons that thought them up in the first place that no decision will do the slightest thing to improve communications in Australia and the likely decisions are going to put back any progress that has been made since 2002. And, for those following this line of thinking, this is the level of thoughtful analysis being used for every other aspect of federal government decision making in this country at the moment - primarily addressing the current financial issues that may occur later this year. Work it out, it would only take the blink of an eye, what sort of total stupidity will be employed by Whine, Krudd et alia on those issues?...and you really think Penny Wrong is helping the water conservation decision making with her latest "aw shucks little girl" mindless screw up? So well done, you (you = the people who voted for the current bunch of muppets). I wonder how many people actually read right through the article I referenced at the beginning of this peroration? Yes, I know it was very long but then anything of any importance can't be contained in a Labor sound bite.... "No child will live in poverty by..." "98% of all Australians will have broadband by....." "No Australian child will be exposed to......" How truly pathetic....not the morons who made these statements, they were always beyond any hope of redemption....the people who then voted for them. I surely hope you remember this shambles next time a polling booth crosses your path. O'Brien....why weren't you born in Australia? Sunday, April 5. 2009Does Exetel Need Any More Customers?John Linton Annette raised this point over dinner last night. She has been doing the periodic personnel reviews which combine disussing with employees both their immediate and longer term future career direction preferences as well as their views on their current positions and jobs and various other aspects of the company, work environment, information dissemination etc and had collated the information she had gathered so far. I had, and have, never really thought about it and when asked last night had no answer. I suppose I had always assumed that Exetel would increase in terms of number of customers for as long as we provided effective and cost advantageous services. Apart from how it relates to macro financial planning for future periods Exetel has never had any view or even estmates on how many customers we might provide service to from time to time. We certainly have never had any specific aims to be "big"/"Top N"/"$N million in annual revenue" or any other metric associated with dollars or customer numbers. Annette's question was - did we actually need any more residential customers than we currently have and wouldn't it be far easier and far pleasanter for every one concerned to base any future growth on additional business customers while simply adding residential customers as current customers left us for whatever reason. Her more colourful way of putting it was to suggest that we closed the residential application pages with a message to the effect that: "applications are closed at the moment - should you wish to be advised when we could accept your application in the future please fill in your contact details below and we will notify you when a vacancy occurs". Pretty silly concept in any meaningful commercial sense but.....but......what is actually wrong with limiting the 'size' of any part of a commercial undertaking to some sort of discrete size? What actual advantage is there in growing a commercial business, or in this instance, part of a commercial business, simply because it's possible to do that? I actually couldn't think of one assuming that, as with Exetel, the objective wasn't to make any large amount of money in the first place. I suppose some of your suppliers won't 'love' you as much as you won't continue to regularly increase the amount of business you do with them beyond the current levels but then Exetel is only a tiny customer of virtually all of our suppliers so, in our case, such a situation is almost irrelevant. It's probably more problematic that 'no growth' in certain areas means that it will be more difficult to maintain the lowest possible component 'buying prices' but that would, presumably, be offset against lower operating costs as each aspect of current processes and procedures becomes ever more precisely (and therefore better) executed and each person employed becomes increasingly more knowledgeable and skilled in what they know and do. Career growth is still maintainable as the business customer base grows and more complex products and services are delivered. Personnel loss is addressed by hiring in either Australia or Sri Lanka as the circumstances dictate.....so nothing really changes other than the difficulty of maintaining residential customers at some pre-determined level. So an interesting few minutes over a pleasant dinner but of no real consequence and certainly no intention of considering it further. We moved on to talk about more interesting and personally relevant things as people who have known each other for a very long time tend to do as the level in the wine bottle continues it's inevitable plunge. So we drove home and thought no more about it. But then, in the cold light of an early Sydney Autumn morning (even earlier than I at first thought as I had forgotten to put the clocks back) I again thought about what we had discussed. There is little doubt that dealing with new 'business' customers is far, far easier than dealing with new residential customers of communicataions services. There is also no doubt, at least in my mind, that it is far easier for a small company to compete in business market places than it is in residential market places. In fact, when I think back about it I can see how really hard it has been for Exetel to offer communications services to residential users and how so much easier it has been to offer services to business users. So I thought about it a bit more and all the things that came in to my head were how there are so many problems providing services to residential users and virtually all of our resources (and certainly all of my time) is spent on dealing with issues and scenarios that generate very little satisfaction and absolutely no either personal or professional pleasure - simply because 0.25% of many, many tens of thousands of users are able to ruin (probably too harsh a description - maybe "introduce negativity completely disproportionate to their importance in the scheme of things") most days. On the other hand new business users require very little tiime and almost no effort and make life, for the most part, very pleasant and they are a pleasure to associate with. It would be interesting, and I thought, mutually rewarding to work with a 'fixed' number of customers to get every last detail of a wide range of services absolutley perfect rather than wasting so many people's time dealing with the same utterly mundane and pointless 'issues' such as "how do I set my email", "why is my ticket closed" and "I'm getting loads of drop outs"and endlessly on and on, from people who just won't lift a finger to read the copious documentation. It simply isn't a way that either customers or support personel should spend their days. So by the time I had finished the first cup of coffee of the day I actually couldn't think of a single real reason not to more thoroughly investigate Annette's light hearted suggestion but I coud think of a whole lot of reasons why it would be a really good thing to do. Then the caffeine kicked in and I realised I am getting far too old for this sh**. I need a new direction at least and more probably a new life - and I need to aim at achieving more realistic objectives like ....... Saturday, April 4. 2009
The Beginning Of The End; The End Of ... Posted by John Linton
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Comments (13) Trackbacks (0) The Beginning Of The End; The End Of The Beginning.......John Linton or just one more inexplicable peak on the roller coaster charts of the DOW?....and will it lead to the total ban on P2P file sharing - at least by Exetel? I was cheered to read this earlier today: http://online.wsj.com/article/SB123875422560786291.html as there is seldom anything even vaguely optimistic in the financial media around the world. (I do realise that for 5.1 million Americans a stock market chart is irrelevant to their personal circumstances.) Exetel has yet to notice any 'slow down' in its order intakes across various segments though we have been the 'beneficiary' of 'emergency' orders from two separate small communications providers ceasing business leaving a number of business customers with no SHDSL services. Despite the statements emanating from the current 'Federal Government' - which tend to swing wildly from "nothing to worry about" to "we'll all be rooned" - depending on which financial advice comic book (sorry, graphic novel) they last read - business is better than it's ever been for Exetel pretty much 'across the board' as far as the first three months of this calendar year are concerned. So despite having to pony up the payment for the new floor space we are buying in North Sydney later this month and additional equipment for the Melbourne PoP and the set up of the Hobart PoP we are inclined to view the financial future (at least as it relates to Exetel's tiny part of it) more sanguinely than we have for over a year. One of the suggestions we received a week or so ago (via the suggestion box) was for a free (to the customer) Astraweb premium newsfeed. Now, similar suggestions have been made in the past and we have rejected them for all the reasons set out by Steve in his blog here: http://steve.blogs.exetel.com.au/index.php?/archives/182-No-News-is-Good-News.html#comments which are, basically, a long list of reasons why such a service is not financially viable. However I asked Steve to open a discussion on this topic because there may be reasons why we might like to do this despite the many sound reasons that have existed in the past that has made it financially, as well as operationally, impossible for us to do. Please, should you have technical comments, suggestions or advice on the benefits of offering a premium newsfeed then please share them with Steve via that particular blog entry....I simply don't have the technical competence to either understand the details or be able to reply to questions about a possible news feed. My rationale for believing that there may now be a sensible case for providing a news service is based on, partly the dog's breakfast iiNet is currently making of its defence of the AFACT law suit (and therefore the possible consequences) and partly based on the dramatic fall in US IP bandwidth transit costs and the costs of EMC raid arrays. Exetel, since Mach 2004, has been slowly building an off peak (and by that I mean a true off peak period of 12 hours of every day of every week with major IP capacity) capability that as of April 2009 is currently at 60 gb per month. It has taken us five years and more than a few problems along the way but we have been able to sustain it for five years and we have plans to increase the current 60 gb allowance further as time goes by. I have read various comments over the years about how unnecessary such a large amount of "off peak" allowance is. I have never believed that is the case, as the Exetel period extends to 12 noon each day a fair bit of Exetel's customer's "off peak" is what other ISPs deem to be "peak" and that in itself represents a major additional benefit to every Exetel user allowing them to use a lower cost plan with Exetel because their pre-12 noon usage doesn't need to be included in their plan and therefore they can use a lower cost plan. Exetel also was the object of a great deal of vituperation in various areas of the communications marketplaces for publicly stating that it was going to use hardware and software to control P2P usage on its network - (other comms providers were already doing that but simply denied doing it). However they weren't our main reasons for embarking on this long and quite often difficult course of action - which still has some way to go. We took a view that, at some time, the main P2P usage would financially damage the recording, movie and software industries so badly that they would find a way of putting a stop to it. While not having any real idea of when or if there would be a major problem with P2P usage in legal or regulatory terms 5 years ago we were very aware of the dangers that may have happened and, 5 years later, pretty much have now happened - or at least have begun to happen. The other thing that has happened, and was always going to happen so no 'points' for making that prediction, was that IP bandwidth and caching hardware prices would continue to fall. So let's speculate that AFACT wins the current law suit against iiNet and that subsequntly a federal Australian government enshrines that decison in some clear cut legislation that has severe repercussions on an ISP whose users infringe copyright. What to do in such circmstances? Well, of course, one thing to do is to prohibit all P2P traffic on your network because you have the means to do that and several years experience of being able to do it with 'pin point accuracy'. Effective to keep your ISP completely free from any legal problems and not going to concern the vast majority of your adult users (the ones who pay the bills for their children who are the main offenders in terms of copyright breach). Unfortunately your adult users who do base their intenet use around copyright breaches aren't going to be very happy with any ISP that took that action and will leave to go to an ISP that doesn't take such notice of the laws of Australia. What percentage of any ISP's customer base would that be? Impossible for me to know but I'm sure other ISPs would have a better idea than I do. If it's more than 20% I would be surprised but not shocked but, as I said, I really have no idea. Would Exetel survive if it lost 20% of its ADSL customers 'overnight'? Yes - and would quite possibly become a more profitable company (not that is an aim of ours). However that returns us to the point of this meandering exposition on how the falling price of IP and RAID together with a more optimistic financial outlook melds with a customer's suggestion for 'free' newsfeeds. We could, as an example only, comply with any Federal legislaton affecting P2P by prohibiting it's use on our network (we know how to do that). We could, now it is more financially feasible, provide for a small charge, an Astraweb premium feed service that could only be used in the 12 midnight to 12 noon daily period. I think there's a pretty reasonable chance that P2P will remain in use but will be signature based for 'legal' content (such as Microsoft's Opsys etc) with the illegal material being identified as breaching copyright and thus capable of being "terminated" by any ISP that decided to do that. I actually think there's more than a 'pretty reasonable chance' of that happening. Any suggestions you can make to Steve to improve his 'case' for a free Astraweb service from Exetel would be appreciated: http://steve.blogs.exetel.com.au/index.php?/archives/182-No-News-is-Good-News.html#comments Friday, April 3. 2009The Creativity Cup Is Down to The Last DropsJohn Linton We will finish the changes to the ADSL plans over the weekend and the results so far have been very positive with new and churn applications up on average around a little over 12%. There is little doubt that the free hundred VoIP calls has made an impact just as the $15.00 telephone line rental did and the combination of the two is, we hope, going to increase the acceleration of new and churn orders as the offering becomes more widely known.I think this is the 'last shot in the locker' in terms of improving our ADSL offerings for some time as there is really virtually nothing left to cut the costs of delivering the services. The last remaining task is to see what can be done about improving our sales of mobiles either as stand alone or as part of a 'bundle'. We have done some preliminary work on revising the 'bundled' offerings but, as throughout previous years when we have attempted to put together some sensible permutations, the costs of the basic service components at our small size simply don't allow us to offer anything particularly attractive or even 'competitive'. I have never been very good at developing sensible mobile combinations as I have never really believed in the concepts - which makes the task just about impossible. Our issues are that the concept of hundreds of minutes for a few dollars is simply beyond our abilities as we are conservative (sensible?) enough not to make extravagant promises to our suppliers to get better deals. My other issue is that I've been using VoIP on my mobile for approaching 6 months now and I really can't see how any mobile based rates can really approach HSPA mobile phone/VoIP cost effectiveness at 10 cents per un-timed call to wire line destinations and something like 10 cents a minute for calls to mobiles. So - it will come down to gambling with a very few variables and I have very great reservations about gambling and that reticence is greatly increased in the uncertain times we now find ourselves in and the ongoing situations that may come about. We need to put together an offer of 100 mobile calls for $A15.00 or thereabouts (inc GST) on a bundled ADSL offering but it is proving beyond any wild stretch of my 'bravery' to find a way of constructing any realistic method of doing that. 15 cent untimed mobile calls, at our buy levels just aren't possible but, from everything I've looked at, that is about where a mobile offer needs to be. Having now effectively 'bundled' VoIP with every Exetel broadband service offering at no additional charge has made a mobile 'bundle' even more difficult. The best suggestion we have currently come u with is to include a sim (at no charge to the customer) with every ADSL service with a special set of low cost rates if the customer chooses to activate it. That at least has the advantage of simplicity and also makes 'distribution' of the sim relatively straight forward......but it's not really 'compelling'. The alternative was to include a number of pre-paid calls with the sim so that parents could give it to their children (who more often only have pre-paid plans of some type) as a 'bonus' and hopefully those plans get re-charged once the initial credit runs out. Again not exactly a brilliant conception nor very 'compelling'.The other issue with these initiatives is to find a way of getting the on line billing meters at a real time basis which has proven to be impossible in the past nad only a vague possibility at the moment. Obviously without this facility it isn't possible to offer pre-paid services or to be in any way creative with a fixed number of calls up to a threshold. Perhaps I'm running out of lateral thinking after so many years of trying to make communications offerings attractive in residential markets where we have no real ability to compete. I am, more often these days, inclined to believe that is the case and then it actually surprises me sometimes that Exetel has got as far as it has in the various market places that produce our small, but continually growing, revenues and I get re-encouraged to believe that small companies do serve some sort of purposes in residential markets dominated by the large carriers. The situation is far easier with business services as there are higher volumes and a greater willingness, and ability, to recognise true commercial realities that see 'free' handsets and huge 'caps' for what they are and it's much easier to design truly cost effective commercial plans for businesses. This applies across the range of communications services not just for mobiles and fortunately the large carriers and medium sized communications providers have such expensive 'sales and marketing' structures they have to charge very high prices which allows small companies like Exetel to compete much more easily. It looks like being a tough and fruitless weekend. Thursday, April 2. 2009Is The Lunatic Fringe Getting Longer?John Linton I wasn't sure whether to laugh or cry when I received this 'suggestion' from the User Facility Suggestion Box earlier this morning: I realise that I'm absolutely not the right person to reply to this sort of nonsense but as it came via the user suggestion process (rather than the complaints or billing resolution process) I read it as I do all suggestions. The suggestion box has been a major success in its first month of operation and we have made over 100 changes to various aspects of our processes already based on user suggestions. - but what on Earth do you do with communications such as this? "Dear Exetel Support, I\'m really ANNOYED, here\'s why: Last month, due to no fault of my own, I had the unfortunate experience of having to cancel my credit card. While my other accounts associated with the credit card (insurance, web hosting ...) all accepted the new credit card details. Exetel did not! I finally got online again using my mother in-laws mastercard and after spending an extra $30.00 in failed transaction payments. I decided it must be a problem with my credit card, and called the bank. The bank said their transaction records indicate that the wrong (visa) verification number (3 digit on back) was used for both my card and my wife\'s. Obviously we didn\'t make a mistake typing the three digit verification number. Rather Exetel\'s payment page has some fundamental error/bug processing visa cards (The page has spelling errors also). Because of Exetel\'s problem/bug processing visa cards, I\'m now down $40 (including the most recent failure fee). If I don\'t receive a full refund of my $40 and re-connection to the internet. I WILL take my business elsewhere, never recommend Exetel to my friends again, blog about this issue on Whirlpool, Twitter, blogger, and any other online blog I can find. Please contact me on 0415nnnnnn to resolve this issue." If I was to accept the claim that Exetel's key financial processing systems have random bugs in them then we are in serious trouble in continuing to operate the company. Can a system that has processed hundreds of thousands of transactions (apparently accurately as we have never received such a complaint before) suddenly have developed a strange inconsistency on a single occasion? I would have thought that unlikely to the point of dismissing it completely after a few seconds thought (bearing in mind we use the software supplied by the bank to their multitude of customers - we don't write it ourselves) as to how it could have happened. - which is what I did. How do you deal with a person who is so irrational as to make such a claim - and why on Earth would they do it? Is it actually possible that they believe such a thing is possible rather than the much more obvious explanation? If the last paragraph had been omitted (the silly threats) then I would have replied differently to the way I actually did. I have an absolute inability, developed when I was in my very early teens, to deal with someone who threatens me in any way other than to act as as unreasonably and as inappropriately as they do - I should have grown out of that with the onset of adult maturity but clearly I have still not reached that stage - yet. I do wonder why an increasing number of people I observe (not only in Exetel's business dealings but in restaurants, shops, service stations and, of course, driving on so many roads around Sydney) behave so irrationally aggressively and so completely stupidly. In this instance how could this person actually believe that a financial processing system (written by a major bank) is more likely to make four successive random errors at different times than his own fingers? Even if he (and it was a he) could believe that why would his first communication be phrased so ridiculously confrontationally? What sort of reply did he expect to receive? Without the stupid threats I would have replied that while I believed a key Exetel financial process (written by a major Australian bank) could not have randomly mis-recorded a key stroke four times in succession from one customer but not from any other customer over a period of almost 5 years we would waive the failed debit charges. However, his sheer stupidity coupled with his silly 'threats' caused me to reply differently: "Dear Sir, While it is easy to understand your annoyance you are directing it towards the wrong entity. Your, silly, claim that "obviously we didn't make a mistake typing the three digit verification number" should have read "obviously WE MADE A MISTAKE..." Because: If "Exetel's payment page has some fundamental error/bug...." it would seem to need some explanation as to why only you have encountered this ridiculous situation whereas over 100,000 other people who have entered their credit card details over the past years have not. Lastly your silly statements about the actions you will take if we don't agree with your ridiculous assertion are not going to find any sympathy with a supplier who realizes that you have made a careless error and to save face with your wife are asserting that our very carefully constructed and audited financial processing systems contain such a ridiculous flaw as you are stating. But that begs the question you raise about how dangerous it is for you to do business with an organization that operates seriously flawed financial systems. What would happen in future months if other flaws in our systems disadvantage you even further? You can't possibly allow that to happen and therefore you should immediately move your ADSL service to another provider and, good citizen that you are, you should invest even more of your time warning as many people as possible of Exetel's criminally negligent and dishonest financial systems. Be careful what you assert in writing because your comments in your email are, prima face, total nonsense and to repeat them in public is a very serious denigration of a commercial entity - and I would think that any other person who reads your comments will form the same view that I have. As Exetel is clearly not a suitable company for you to deal with, this email is to advise you that you should move your Exetel ADSL1 service to another provider before mid night on April 30th 2009 after which time Exetel will cancel your connection. Although the fault of entering incorrect information is, without doubt, entirely yours Exetel will not charge any failed debit fees. Exetel will not impose any early contract cancellation fees. We wish you more success with the financial processing systems of your next service provider and hope that they are not as seriously flawed as you accuse Exetel's of being." It seems to me that there are more loonies around than there used to be. PS: (7.20 am April 3rd) I have been advised that this customer claims on another forum that he is being mis-represented because "I have chosen not to show his earlier correspondence". Like his other comments that is simply untrue. There was "an earlier" email (by approximately 5 minutes) to the suggestion box but the only difference was that it used the words "pissed off" instead of "angry" in the first sentence and was replied to (by me) with the comment that we don't deal with inappropriately worded correspondence". A minute or so later the version refenced in this post was sent. If any correspondence exists beyond that then no-one at Exetel has ever seen it. Wednesday, April 1. 2009The Next Three MonthsJohn Linton We have done a lot of work over the past few weeks to try and improve our ability to continue to not just survive but to grow in line with our slightly revised (December last year) business plan. Being a company that operates on very low margins (so that we can deliver on our basic reason of being in business of offering the lowest end user pricing in Australia) makes it extremely hard to offer even lower pricing than we currently do as the vast majority of our service costs are determined by our major suppliers and we make the slimmest possible profit margins on our end user prices. Sure, we will get a financial operating cost benefit in mid year from reduced IP costs and we have also obtained some other cost reductions on mobile minute costs but these, divided by the current number of users, are around $2.70 per user - not exactly breath taking (or even noticeable) reductions for a customer. However, as you may have seen, we have added some significant value to all of our current residential broadband plans over the last day or so by including 100 free (in the actual meaning of that word) VoIP calls and also some increased download allowances in the 12 hour period to noon each day. We had hoped to have in place a really competitively priced ATA and 'magic box' by the time of these announcements but we have, currently, failed to do that. We believe that the current plan improvements together with the other changes we will make over the balance of this week will maintain the very strong growth in these services that we have experienced over the first three months of 2009 while continuing to deliver even better value to many of our current customers. One of the successes of our 'new' directions is the 115% growth in high end business activations achieved in March with the low cost Ethernet services leading that growth and the new sales personnel making an impressive start to their communications sales careers. This has been encouraging and has turned out pretty much at the high end of our expectations. We will continue to make some serious attempts to quadruple our monthly sales to small/medium and medium sized businesses around Australia and will base these efforts on developing a significantly sized outbound sales force and a series of new and improved services at even more aggressive pricing than we currently have in place. We have increased the included download allowances on many of our business plans to 200 gb and have also included options of 'unlimited' downloads for some business users. The new GM of our Sri Lankan company takes up his duties today and, assuming that everything goes to plan, we will slightly accelerate the transfer of the remaining back end processes from the Austraian to the Colombo office as well as increasing the speed of knowledge transfer. While we still have a very long way to go to complete this transition it continues to make progress along the lines we had originally expected. Once we complete the knowledge transfer we will look more seriously at selling services in Sri Lanka in addition to providing services to Exetel in Australia.We will also pursue the opportunity of selling back end support and administration services to ISPs in New Zealand if the current progress continues to be made. Hopefully we will be able to resume offering new ADSL1 services in Tasmania before the end of June and we will attempt to finalise our efforts to also offer ADSL2 services shortly after that. We have been considering how to move forward with ADSL2 services for well over two years but with the ongoing uncertainties that affect almost every aspect of that decision we had all but abandoned doing anything serious about it. The opportunity of the new BassLink pricing, while nothing to get really excited about (except that it it is so much lower than Telstra's previous pricing), does change all previous thinking about services in Tasmania and, we will make some real effort to finalise the business case for offering our own ADSL2 services in at least the four larger population areas as well as to the State Government agencies. We would expect to activate our pre-paid wireless data services before the end of this week as part of a range of initiatives we will be taking to quadruple our wireless data sales over the coming three month. I was told last night that the samples of the low cost Yagi aerials have finally been delivered by the manufacturer and are being air freighted to us today. If those units prove to be suitable they will assist our country agents offer HSPA in more locations and at a lower cost than is possible today - especially if we can finally find the 'magic box'. We have also begun to make improvements to our mobile offerings and will come up with more attractive mobile plans as well as more attractive 'bundles' than we have previously been able to offer based on some better pricing we have been 'offered'. Our mobile business has never developed as we had originally hoped it would have but it has continued to grow slowly since we sold our first service. One day we will find a way of making it a more compelling offering and we will make much more effort to do that now. So, new quarter - new enthusiasm for making the most of the opportunities that bad times throw up along with the more noticeable 'challenges' and 'disasters'. |
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