John Linton's Personal Musings

John Linton

in his predictions of the state of the planet in 1984?

I am getting an eerie feeling that Australia's and the rest of the countries in the world's populations are very much being manipulated by various Ministries Of Truth. In Australia's case this is perhaps more obvious to me as I live here but I was reminded of this possible state of 'mind' over the last few week or so having spent a few days in Sri Lanka where it is blatantly obvious to an outsider that the English language press in that country (I can't read or speak Sinhali) is very much a 'government instrument'.

It seems to me that Krudd and co have suborned the Australian media in the same way, and that since those of you who were stupid enough to vote the current muppets into governing this country, Australia has become more and more to look like Airstrip One where Newspeak and Doublespeak and, increasingly, Goodspeak have become the, pardon the mixed metaphor, the new Lingua Franca of the media and parliament.

The Ministry of Truth now holds sway over every 'public' utterance in this country with, as far as I can see, Krudd's statement du jour replacing all of his previous statements on the same topic as being the "truth" while all of his previous, and contradictory statements on the same topic being erased from the public record, or altered to reflect the 'new reality' and anyone who dares raise them being declared insane and a candidate for "re-education" - or members of the coalition members of parliament.

Why do I say this?

http://online.wsj.com/article/SB124347195274260829.html

jolts you back from the mindless mantra that (All Australians Must Have 100mbps Broad Band) delivered by a new monopoly that is making wild promises (that can never in the 'old speak' be delivered, haven't been costed beyond bus ticket scribbling and aren't vaguely relevant to a country in financial difficulties). The uncanny resemblance to Airstrip One isn't the stupidity of the statements being made about an uncosted broadband provided by a replacement monopoly but haven't you noticed that everything said by Krudd and Whine follows the same incredible process of being based on no facts and with two unfailing claims:

1) Australia's economy is much better off than the rest of the countries of the world (with the clear implication that this is all due to Krudd/Whine's actions over the past 18 months of "power") when the blindingly obvious fact is that any 'status' of "better than other countries" that exists today was courtesy of the previous 12 years of coalition policy and circumstances that had nothing to do with Krudd's/Whine's crazy decisions since.

2) If Krudd's/Whine's crazy uncosted spending hadn't been done - every Australian would be worse off and 150,000 jobs would have been lost.

These two statement types are mindlessly repeated by every crazy person in this country and in every media outlet to the point that the two dumbest, most dishonest and simply outrageously lying muppets ever to hold the two most senior positions in Australian government are allowed to state anything that comes in to their head with no fear of being held to account even five minutes in to the future when they subsequently make remarks that are diametrically different.

As the article cited seems to, clearly, indicate the need for "blindingly fast" broadband is a myth and, speaking totally personally, I am one of the majority of adults who use the internet extensively that has zero need for something other than a service fast enough to provide VoIP and browsing and data base iterrogation. Now I understand that other people may well like to have the ability to stream video or other more bandwidth/speed dependent applications but are they the vast majority that needs an Australia wide capability? I don't know but I doubt it.

The other point of the cited article is simple - cost is a major concern to end users of data and entertainment services and given an ability to reduce costs or increase speeds a decision won't be made by an increasing percentage of users to increase speeds. Given the choice I would reduce costs rather than increase speeds (I have Exetel ADSL2) and if that meant not watching some movie on my PC I would go to a cinema or, heaven forbid, leave my darkened room and talk to my family or friends and acquaintances or maybe participate in some other activity.

Does a residential internet service need to be faster than 1500 kbps down? Telstra used to advance this position and, while I seldom agree with anything that Telstra says or does, I agree that residential internet speeds have no reason to be very fast at all. It seems to me that 'faster' data communications can be justified for education, health, law and order and a lot of business but has zero relevance for residential users at all. Like car enthusiasts some data users only relate to meaningless speeds. While a minute percentage of car buyers base their vehicle purchase on 'performance' almost everyone else bases their decisions on getting the lowest possible price consistent with their budget and essential needs....they, you, me don't ever have the luxury of speed for the sake of it - almost everyone spends as little as possible.

NO NATIONAL GOVERNMENT is serving the interests of the majority of the population of the country they govern by determining that, WITH NO FUTURE OPTION they WILL get a data service based solely on speed WHICH FEW INDIVIDUALS rate as their decision criteria.

And so like every other 'public issue' since November 2007 only doublespeak or newspeak is used in this country today - the facts have become not only omitted from any statement made by Krudd/Whine etc but Australians have, apparently, been brainwashed into not noticing that has happened.

Krudd is defined by this description of him over the past eighteen months"

"He is completely unrestrained in what he thinks he can say and do"

..if you don't understand that then ask yourself what you and your family/friends are doing about Swine Flu and why practically every restaurant around Australia had almost no customers two Sundays ago....or....why you need to pay much higher taxes to deliver "100 mbps" internet to "90% of Australia's population".

...but don't take my jaundiced view try this from the very pro-Labor financial editor of the SMH:

http://business.smh.com.au/business/rudd-fights-his-way-down-the-boulevard-of-broken-dreams-20090531-bro6.html

John Linton

...but this move appears to have gone as well as any I've been involved in.

Annette and I had dinner with Steve on the Monday night after we returned from Sri Lanka and he stopped off in Sydney on his way back to Perth from Interop in Las Vegas. We had all had successful trip results and I was stupid enough to say that everything was going really well with the business which was good to see as we had all been out of the country for a week for the first time since we decided to start the business. Steve said I should be more careful about making such statements  as they always presaged 'disaster'.....and so it proved to be.

About 10.30 the following morning (Tuesday 26th May) our CFO dropped a letter on my desk saying that I had better read it as it was urgent. So I read the tersely written three paragraph letter of demand from our land lord (actually the recently appointed agent of the land lord) giving us 7 days to quit the property or else. "Or else" seemed to include locking us out of the property and sequestering all goods and chattels not removed from the premises by 12 midnight on May 31st 2009.

Now we had given our landlord notice on 24th March 2009 that we would move by either 31st May 2009, if we could, or by June 30th 2009 if anything went wrong (as things tend to when you buy a new property and then do major renovations and refurbishment). We had been on a month by month lease for some months up to now as we waited to complete the purchase and renovation of our newly acquired floor space and not having heard anything from the agent had not really rushed to complete the work as we resigned ourselves to paying 'dead rent' until June 30th if things went wrong with our plans.

Now, being a fairly tough person with a relatively quick mind and some reasonable amount of experience of dealing with total ***holes, I was concerned at the tone and content of the letter but having met the writer on two occasions I responded after a few minutes thought as follows:

"Dear Sir,

We acknowledge receipt of your letter dated 25th May 2009 in which you demand we vacate the premises we currently occupy before June 1st 2009.

We have previously advised you that we will vacate the premises by June 30th 2009 and we have heard nothing from you since we advised you of that situation in writing.

It is not convenient for us to arrange a move at such short notice and we would like you to withdraw your demand; we are at a loss to understand why you would make such an unreasonable and unrealistic demand of a long term and ‘trouble free’ tenant.

Should you be unwilling to do that we will ask our solicitors to seek a court order to prevent you taking such any action as it is completely unreasonable.

J Linton
(for Exetel Pty Ltd)"

My view was that we were being blackmailed by an unethical sleazebag agent and a, presumably, equally morally challenged land lord who figured that we wouldn't be able to move a highly complex $A50 million a year business that had, and was completely reliant upon, complex telephone and data line services installed in the offices with, effectively, three and a half working days notice and he was demanding six months rent (at a much higher rental) if we were still occupying the premises at midnight on May 31st. This was clearly based on his assessment that we also had two or three hundred thousand dollars of equipment and fittings that couldn't be moved without seriously damaging our ability to operate the Exetel business and therefore our fear of them being 'sequestered'..

As can be seen from my 5 minute reply I knew that we could use the court process to get a 'cease and desist' order within 24 hours from the NSW Supreme Court so after my initial surprise I wasn't particularly concerned but I was very, very angry. So after thinking about it for a further 20 minutes or so I walked 'up the road' and had a brief discussion with the project manager of our building renovation program who assured me that he would complete everything on time by late Friday 29th. Over the next few working hours I checked with various people and contacted removalists, cleaners, electricians and our data circuit suppliers and then the decision was made to move the Exetel 'head office', its telephone services that serve 100,000 customers and the major data lines that are essential for our help desk and other support services (both in Australia and Sri Lanka) within 48 hours.

I refuse to talk to the sorts of people who would act in the way that the agent and landlord had acted and referred their reply to my brief "go and get f***ed" email to our solicitors - in their follow up letter the mealy mouthed swine of an agent stated he hoped the matter could be settled "amicably" as he was sure we wouldn't want to damage our business and involve ourselves in legal costs - pretty clear where that piece of sh** thought he was coming from and how difficult/impossible a situation he thought he had put us in.

As of 10.20 pm Friday 29th May we had managed to comply with the totally unethical and completely unreasonable demand but only because we have the good fortune to know very, very competent and resourceful people in the many areas that needed to be actioned in unbelievably short time frames. Just as importantly we have exceptionally gifted and resourceful people within our own organisation. Not only have we moved into and are now operating completely and completely effectively in our brand new premises but we have removed all of the old work stations and the other furniture and fittings we won't need and have safely terminated the electricity and removed the Ethernet cables from the previous offices. The remaining bits and pieces will be removed tomorrow and then the carpets will be steam cleaned on Sunday morning.

In the meantime we relied on our solicitors to meet with the people who had sent the letter and they will deal with the situation of what is required in terms of 'making good' the floor space we have vacated in such a very short time. Hopefully they will reach a mutually sensible "amicable agreement" with the building owner and their "representative" on Monday morning when there is a joint inspection of the completely vacant and cleaned floorspace they ordered us out of three and a half working days before.

The world, or perhaps the business world, seems to have a disproportionate number of very unreasonable people. Fortunately, as Annette sensibly said, reasonable people can usually rely on the other reasonable people they meet in their lives to help them out in times of need - something that unreasonable people will never get to enjoy - as of course they shouldn't.

John Linton

I'm not sure whether this is something to be concerned about or an indication that carrier's can deal with the significant changes in wireless versus land line usage more promptly and effectively:

http://online.wsj.com/article/SB124344227596159029.html

Network congestion has been a problem from time to time across every carrier's and supplier's residential networks that I have been associated with since broadband was first offered in Australia (and that includes Telstra's initial ADSL offering where congestion was horrendous for most of the first 18 months of my usage (and don't talk about the outages that on occasions went on for days). It's no surprise that even one of the world's largest carriers will experience such issues but it's refreshing to see them, at least in this case, dealt with so promptly.

My concerns are obviously related to today in Australia and the heightened expectations end users have concerning what they "should be able to expect" from a broadband service in mid 2009 irrespective of whether it is delivered over wire line or wireless. After several years of generally trouble free broadband over wire line the expectations of wireless, at this stage of its deployment, by a large percentage of people are going to be much higher than the early expectations of broad band over wire lines. A simple expectation along the lines of the difference in expectation now that when you flick a switch your lights come on or when you turn a tap water comes out (not the same expectation as when electricity and water were first provided in the 1880s by the first city 'utilities'.

AT&T and many other major carriers in the USA and in the EU have all gone through the provisioning/saturation/re-provisioning processes with their wireless roll outs as have the mobile carriers in Australia. Of the Australian carriers only Telstra seems to have avoided vociferous 'public' complaint about under provisioning or cell saturation though you only have to look at some of the public fora to realise that the same level of 'over expectation' applies to any supplier of anything in this country - and presumably other countries. Irrespective of what should be the case there will always be issues with expectations not being met and carriers not dealing with congestion quickly enough for some percentage of end users which makes providing any new technology based on expensive infrastructures something that should be avoided by anyone with any sense. Clearly Exetel, or at least the people who run it, or more probably just one person involved in running Exetel never has had any sense.

We have enough experience now with around 3,000 HSPA users (plus our own personal experience) to know that HSPA is a great tool for anyone who can't get wire line ADSL and wants a connection that is far better than dial up and approaches/somewhat exceeds an ADSL 1500/256 connection a large percentage of the time but should never be relied upon to operate at those speeds 24 x 7. My personal experience recently in Benalla and Seymour (two areas that have cautions regarding capacity issues) over two days and two nights was that I got fast enough connection at all times (including alleged peak connection times) to write and receive emails, do this blog and interrogate our business data base without any problems. I don't play games or watch live video or stream radio so I have no idea how that would have worked. Similarly my VoIP mobile worked over the same network (Optus) without a problem calling the UK and Sydney.

However, I have little/no doubt that there will continue to be congestion issues at various times in various places as wireless networks attract more and more customers and, at least some of, the mobile carriers mis-guess, or are careless in planning for, the rate of growth in different areas of their networks. There is NO doubt that is going to happen and there is equally no doubt that the carriers will continually and constantly deny any such problems and the end user will blame Exetel and or Exetel's agents for any problem that occurs and dismiss any attempt at telling them that the problem is with the carrier's provisioning which they will dismiss as "passing the buck".

This is an unpleasant prospective scenario for everyone concerned but because it is very real it has to be planned for very carefully and, if possible, avoided either completely or as close to completely as can be achieved.

Because we realised this situation would exist at a significant level for at least the first two years of our provision of HSPA via Optus we have already put in place as many 'ameliorations' as we could to mitigate the more difficult situations we would encounter and/or the unreasonable expectations of the more unrealistic customers. The major 'protection' was to provide a no contract service option which has been taken up by almost 50% of our HSPA users so, in the event that they find the service unsuitable, they can simply stop using it. Most of those customer types sourced HSPA modems from sources other than Exetel so there was no 'wasted money' issue. For customers who bought modems from Exetel we were prepared to take them back but, over the first six months of providing HSPA services I don't think we have yet done that - I could be wrong but if I am it is a minute number.

To attempt to avoid the situation of having disappointed HSPA customers will need some serious thinking and some clever approaches that will need careful implementation and, probably, break with all the more conventional 'marketing' shibboleths that we are aware of. Certainly Optus Retail, Virgin/Optus, DoDo, Vodafone retail and 3 retail don't agree with anything we are considering and I don't think Telstra does either - based on their marketing of HSPA services which, at least to me, seems just plain crazy and seems to be aimed at creating maximum customer disappointment - but then again I know nothing about marketing or advertising.

It seems to me, based on our last six months or so of test marketing HSPA, that it is essential in avoiding the total waste of time and money that 'disappointed' customers cause, is to avoid having disappointed customers buy your service in the first place as nothing can be done subsequently to avoid all the unpleasantness such customers cause the supplier and the supplier causes for the disappointed customer. We have some five and a half years experience in the some ways of avoiding disappointment in ADSL customers but nothing like that with HSPA customers - but at least we understand the methodologies and processes.

In simple terms to avoid having unhappy/disappointed HSPA customers requires at least three things: no contracts, no hardware supply, a sales filter to prevent the likely 'disappointed' customer from considering signing up with you in the first place. I think that's pretty hard to do but if you eliminate "no hardware" and substitute that with hardware that the end user will need and will discourage 'disappointment likely' customers from signing up it gets much easier. To achieve that may well be more difficult than I think but I know it will be near enough impossible for any other supplier to copy because it would be total anathema to any self respecting "marketeer".

It will be an interesting re-introducton to 'marketing' - to avoid selling to any end user who will be disappointed given the unknown provisioning plans of the carrier and the sheer craziness of the various carrier's retail arm's promises and even more crazy promises of their more undisciplined wholesale customers.

John Linton

......though perhaps that just means I haven't kept up with the speed of VoIP development recently - at least in the corporate sense.

I say this because I am just so impressed with the ease of cutting over to our own in house developed Asterisk PABX system from the 'proprietary hardware' VoIP PABX we have been using for the past three plus years to run our business. Not only did the transition go without a hitch but I have access to statistics and 'views' that I have been unable to get before and that we really need to better run our call centre. I'm aware that VoIP for business users is still a small percentage of Australian usage and as far as small/medium business is concerned it is a very, very low priority; which is a pity.

After three years of Exetel using VoIP I have forgotten about "VoIP quality" issue that I hear as the first thing said by some business decision maker as a defence for paying 5 times more for a telephone PABX and up to ten times more for the call charges. I have also forgotten about "reliability" - not having had any hardware or connectivity problems in the time we've used VoIP. And having forgotten about those 'objections' I had also forgotten about the phenomenal extension of the reporting and data base integration that is possible with VoIP based telephony that is simply unheard of with 'conventional' telephony. From my direct experience (which may well not be representative) most of the 'non-VoIP' telephone users seem to think a business telephone system is for picking up a handset and either taking or making a call and that paying too much for that simple service is "OK - for safety reasons". Fair enough - I wonder whether they drive to and from work in a horse and cart?

Perhaps that is harsh but, if the two 'breakfast seminars' I have been invited to talk at over the past few months are representative of business attitudes to VoIP telephony, it's more likely to be accurate because the views expressed at those 'events' unanimously belonged to 1995 not to 2009 (and I can say that because I have been involved in business VoIP for that time period). Reliability and call quality WAS an issue in 1995, quite possibly it was still an issue in 2004 but from 2005 onwards it has been a total non-issue - as our own 'corporate user' experience has proven. So today, Exetel now has NO conventional telephone lines in our new office nor in our office in Colombo and the five Exetel personnel who work from their homes only have a conventional telephone line because they need ADSL. While Exetel, hopefully, will continue to grow and add personnel in different ares of Australia as well as in Sri Lanka and possibly other countries we have no plans to ever install or use another conventional telephone line.

Our 'old' Mitel VoIP PBX was/is a good box but we always had to use Asterisk to provide the integration to our data base and the, now, many dozens of functions we have integrated into the telephony interfaces between Exetel and our customers:

The ability to use DTMF to log faults direct to the fault logging systems and update the customer data base records

Auto call back confirming fault logging with the ticket number

SMS and email updates on the progress of the fault

Auto messaging with alerts and planned outages

Confirmation of receipt of on line orders

Advise of subsequent provisioning status and developments

Advice of service activation and user passwords

The ability to send all advice by any combination of SMS, email or voice

....and, literally, many dozens of other functions.

One of the annoying factors was our inability to take the reporting from the Mitel and integrate it with our GURUS personnel and function management and reporting system. We could go part way, with a lot of fiddly programming, but we couldn't tightly integrate the phone statistics into our 'second by second' management systems as easily as we needed to do - and we certainly couldn't make changes to the code we wrote very easily.

The new, in house developed and written, system based on Asterisk, has solved all of those problems and we can now see detailed information that was never available to us before as well as providing the interfaces to GURUS to currently and historically report on the various scenarios in which we are vitally interested. As I said - I am very, very impressed. Of course, one day doesn't make a reliably bullet proof corporate telephone system but only time can deliver that 'verdict' - so far so good.

The other good news is that the cost of an Asterisk based system (apart from its vast reporting superiority) is that it costs less than $A10,000 (everything included) and can use any SIP handset (in our case replacing the 50 plus Mitels we currently use would have been an additional $A25,000 which would have been a pointless waste of money. Even the very cost competitive Mitel box capable of doing what we wanted done would have cost us the best part of $A70,000 and a 'similar' NEC, Ericsson box was well over $A100,000.

So, modern Asterisk business VoIP, a tenth of the cost of any proprietary solution plus the ability to seamlessly integrate any company's data base records and provide functionality undreamed of outside many, many hundreds of thousands of dollars (and then huge amounts of money every year for 'licenses' and 'support' and 'maintenance') plus avoiding the need to only buy hand sets at exhorbitant prices from the particular manufacturer selected. Would any sensible business decision maker really choose a service that costs ten times more with a fraction of the usability?

It appears to me that we have/the VoIP industry has moved to a new level where the use of 'conventional' telephone lines and controllers will truly be as bewildering as someone driving down the Pacific highway in a 'carriage and pair'.

John Linton

(the first 'sea change' was starting to hire a sales force to sell Ethernet and SHDSL connections to medium/large businesses which is now in it's third month with a long way to go - we are interviewing to hire another four trainees later this week.).

Since we started offering broad band services in January 2004 to residential users we have never spent one cent on advertising or any other sort of promotion. This 'policy' has not impeded our month on month growth every month for the past 65 months and has allowed us to invest whatever amount of money other start up communications companies may set aside for 'promotion' into switches, routers and bandwidth and other infrastructures. It has been a sensible, albeit very conservative, policy for the whole of that time. It is now something we are going to change.

Why are we going to change? I could write that it is a carefully thought out long term considered strategy. But, that would be untrue. The short answer is that I, as the person responsible for developing our sales revenues (and profits), I haven't got a clue as to how to use our current methodologies to more rapidly make Exetel's name and the Exetel versions of the Optus HSPA service widely enough known in the areas we want to sell HSPA to end users (or any other area for that matter) to meet the ambitious targets we believe could be achievable. So, as Conan Doyle once, almost, said, "once you've removed all other options, advertising no matter how much you dislike and distrust it, becomes your only method of approach".

And so it came to pass - something I never expected to do at Exetel. We accepted a proposal yesterday from the fourth 'agency' we had asked to advise us on promoting HSPA services in rural and regional country areas of Australia and have accepted their recommendation to use television advertising in selected areas from some time in early July 2009 until some time in early December 2009. I'm not a fan of hyperbole or any of the other extravagances of the 'media world' but I had some reasonable empathy with the structure and content of the plan presented to us. I have no idea whether the proposal will actually work but then I had no idea whether Exetel would 'really work' when we went in to the communications business in 2004. While I abhor any type of waste we can 'afford' to 'lose' our planned expenditure on advertising without in any way damaging our business as it will be paid for out of the current financial year's profits which would other wise only be wasted on dividends for the shareholders less payments to the ATO - in itself not a sensible use of hard earned and still small profits.

We had hoped to begin an 'advertising campaign' for HSPA in December 2008 but continual slippages of almost every aspect of getting the service available and then understanding its limitations (and how to overcome some of them) plus the endless delays in getting properly priced Yagis and HSPA modems (let alone the hoped for 'magic box') have all 'conspired' to make any date we picked impossible to meet - and that may well still continue to be the case. With the Yagi's "almost on the proverbial boat" and the lower cost modems "almost there" we have decided, very regretfully, to remove the 'magic box' from the initial offers and fly with what we have....which is still quite a bit better than what I see of the other 'me too' HSPA offers in today's market.

My concerns about the whole project remain the same - does the Optus coverage provide a decent performance or have they over sold and under provisioned their HSPA network as they seem to make a habit of over the past 20 years of deploying new technologies? The other major concern is will some of Optus other wholesale customers make a dog's breakfast of country markets just as they have city markets with their "free!" "free!" "free!" stupidities (a la Dodo) and the strange/poor performance of their own retail and Virgin offerings (which whenever I do a benchmark of an Optus Retail/Virgin HSPA service side by side with an Exetel/Optus HSPA service the Exetel/Optus service is ALWAYS almost twice as fast. However, I am always optimistic about these things although we will carefully select the coverage areas.

There will still remain the concerns about the on time receipt of the antennae and the low cost modems and the finalisation of the plan prices for the country promotion but the first two we can do nothing about and the third is only a matter of being 'brave' enough. There is the small matter of developing the new web site for "Exetel Country" - I guess most people are too young to confuse that new web site name with "Marlborough Country" - though perhaps we could add similar 'Western' music to the front page? It will be interesting to see what sort of job we can do of that in some new and very different ways.

So, using advertising for the first time in over fifteen years is going to be a real challenge for me as I have no knowledge of the logistics that are needed to make such a 'campaign' effective. While I liked the theoretical impact of the ad we were shown (via 'story board'), I was surprised at how completely the selling message was put over, and understood the logic of how the 'contacts' would work I am still unsure of how to implement the detail. Then again that describes most of my life to date so I'm vaguely looking forward to getting the detail right in the limited time that's available rather than being overwhelmed at the thought of cramming another major project (on top of the Sri Lankan ongoing development, building the corporate sales force, the premises move as well as the total re-vamp of our ADSL service offerings and promotion methods) into the next four weeks.

Perhaps I'm being too 'dramatic' and these projects and other tasks are just symptomatic of a slightly busier period which is normal at the end/start of each financial year.

Maybe it's just old age?

John Linton

....or would it be more appropriate to describe it as 'mis-information'?

...I'm referring to some of the statements, ascribed and unascribed, in this:

http://www.theaustralian.news.com.au/business/story/0,28124,25531169-36418,00.html

and this:

http://www.news.com.au/technology/story/0,28348,25540041-5014239,00.html

Whoever felt that they should make the statement that "Broadband costs will halve" needs to stop smoking the heavy stuff while writing for publication - it makes them look ridiculous.

"Pure" IP bandwidth was a significant component of providing an internet service to Australian users since the bad old days of the mid 1990s (when Telecom Australia charged 27 cents per MEGABYTE to the few wholesale ISPs silly enough to pay them for such a service)  and then some $A2,000 per gbps in the late 1990s spiraling downwards below $A1,000 by 2001 and then below $A500.00 by late 2002 and then reducing by around 20% a year since that time to a little over $A100.00 for a "medium sized buy" today (less than a few gbps). Of course, caching and related technologies dilute the per gb delivered to the customer price paid by the ISP to less than $A100 today which, when you look back, is a pretty amazing price drop over the past few years.

Depending on how you look at your usage (and a conservative view would be that you get an actual usage of of around 75% out of your total bandwidth) and a rough/near enough calculation shows that 1 mbps can deliver around 300 gbytes of data in an average month the current wholesale price of IP bandwidth costs an ISP around 40 cents per gigabyte to which cost has to be added the cost of the link between the customer and the ISP which will vary greatly depending on how much of that infrastructure is owned by the ISP - but it will add something - in Exetel's case it adds about another 5 - 10 cents. So, depending on the buying power of the ISP it costs something less than 50 cents per gigabyte in 'raw' cost to ship data to an end user (before amortization of the equipment and the other costs associated with running the ISP's business).

So it can be seen that at an average usage of something around 5 gigabytes per residential customer (up from around 2 gbytes some 4 - 5 years ago) the cost of IP bandwidth isn't very significant in the cost of providing a 'complete' internet service to a residential user - contrary to all the statements and implications in the referenced articles....around $2.50 per user at today's, non-Pipe rates. What is true is that Australian ISPs probably do pay between 5 and 10 times more for IP bandwidth than USA ISPs but that can be understood based on the cost of 10,000 kilometers of deep ocean cable versus 50 meters of in ceiling cross connect fibre in a US data centre co-location facility.....but until someone finds a way of delivering data, at acceptable speeds, without incurring the costs of trans-Pacific cable that is not going to change very much.

Having said all of that, the ongoing problem with operating any commercial business is to ensure that your actual costs of buying the 'building blocks' you need to deliver your services are not going to either send you broke or put you at a commercial disadvantage vis a vis the companies you compete with at the moment or in the future. So whether you pay $3.00 or $2.50 for the average end user's IP data is going to make a difference but.......well.....there are many other parts of the 'building block' equation of delivering internet services that can be much more easily addressed....at least I would have thought so.

In further explanation of how relatively insignificant IP bandwidth costs have become in the whole internet provision equation, this comment probably emphasizes it better than anything I can say:

Mr Malone said: "The company is seeking to hand on the cost savings to consumers in the form of increased download quotas somewhere in the vicinity of 15 per cent."

(I see no mention of "halving the cost of broadband - do you?)

Now I may be cynical but that seems to be a non-offer if in fact iiNet have obtained any sort of savings by taking the risk of basing their ability to supply internet services on a start up cable provider. By providing no plan reduction cost but offering what appears to be 12.5% more bandwidth (which on iiNet's low end ADSL2 plans would be a 'princely' 125 megabytes in peak time) he appears to be trivialising the 'value' iiNet will receive for the risks being taken to totally inconsequential. Offering an additional 12.5% on the low end ADSL2 plan is the financial equivalent of around 5 cents per month - all that can be said about such munificence is - "WOW!!"....but it does emphasize the relative unimportance of IP bandwidth costs in terms of providing actual services to end users. (obviously being a bit cynical when it comes to public statements by media groupies - I wonder when these 15% increases will be put in place? I think it would be laugable to try and make anyone accept a statement that "iiNet is increasing your quota from 1 gbps to 1.125 gbps as part of a major cost saving we have achieved with buying IP from Pipe rather than from Southern Cross".... I could, of course, be quite wrong).

Before I went to Sri Lanka, Steve and I had lunch with the CEO of a very large international carrier that doesn't really provide wholesale services in Australia at the moment but who might increase their presence here in the not too distant future. I almost never attend 'get to know you lunches' but I made an exception on this occasion as I am always interested in possible new sources of key services and we have had sporadic contact with this company over almost ten years but they have never had anything we could sensibly use. They were predictably reticent about their future plans but were interested in "making special arrangements" and providing IP bandwidth to us in the not too distant future (as I'm sure they would be interested in providing IP bandwidth to anyone else who wanted to buy from them). Their views of the viability of the Pipe venture were, given the unfailing nature of their cultural background being overt politeness at all times especially when talking about other suppliers, surprisingly 'candid'. They made thinly veiled references to their views on the Pipe cable which would have concerned me if I had been thinking of using it - as I have never encountered such 'frankness' from such a source about a theoretical 'competitor' before.

Exetel have decided to use Southern Cross (bought through Optus) for our IP needs for the coming 12 months and we will see what happens in the IP marketplace between now and next March when we review our IP contracts. In general terms there isn't much differentiation between the various SX 'wholesalers' and AJC direct - buying AJC/Telstra's own cable is still more expensive than any other IP provider  - at least as far as Exetel is concerned. Where IP pricing will be next year is not even guessable by us but we will continue to use the benchmark of buying 2 x 2.4 gbps circuits direct from SX ourselves as the pricing benchmark for the time being and will stop buying from a wholesaler if our direct buy from SX becomes lower cost than a wholesale price. Also by next year there may be a new carrier providing 'pure' IP which may change the process more than it is being changed at the moment.

So I can only hope that the ISPs supporting Pipe don't get too much of a pricing edge for the risks they are taking - but, in the scheme of things, IP prices dont really affect the provision of cost/effective internet services in Australia too much these days.....if only we could get a 20% reduction on broad band port costs - now that would make a difference.

Pipe delivering a "50% reduction in broadband pricing"?....must qualify as the stupidest statement of the year so far - and there's a lot of competition for that title.

John Linton

.....in the way Exetel constructs broadband plans after five and a half years of pursuing the same path?

It is past time to consider the changes that should be made to Exetel's 'product line up' for the new financial year that is only five or so weeks away - yet anoter year gone in the blink of an eye. While modifying/changin plans is mostly an iterative process, it is going on all the time in an 'evolutionary' sort of way on a month on month basis, we use the end of each financial year to make the 'big decisions' on overall 'direction changes'.

So I drowsed away yesterday afternoon changing channels between two different boring local football matches, a recording of the Bulls/Crusaders game and a selection of other uninteresting FoxTel offerings and re-collating the various projects, customer suggestions, 'competitive' current changes (none that I can see) and some of our own less wild ideas. As I mentioned previously we have solved our "move your downloads to after midnight" too well to the point that the old "peak period" is now almost a gbps less than the stoke of midnight to 12.20 am brief time interval as can be seen here:

http://mrtg.exetel.com.au/combined/total-supplier-bandwidth.html 

This has been a remarkable piece of 'education' (although it has taken the best part of five years) and has turned the old peak/off peak perceptions on their head and leaves us with an interesting view of how we should construct future broadband plans.

I, personally, like our current plan 'construction' and the symmetry of the 12 hours 'free' 7 days a week and believe it is a major achievement in the timorous 'me too' ISP copy cat marketplaces where, effectively, there is virtually no innovation and no real differentiation - although that is partly caused by Telstra's dead hand regarding ADSL1 and general lack of desire to do any thing 'brave' in the case of ADSL2. However the users of the Exetel plans that have liked the post midnight very large downloads have, over time and without me really noticing, created a new set of opportunities.

A spare gbps of "old" peak period (7.30 pm to 11.00 pm) bandwidth that is now 'unused' is something that I never thought I would see and provides the opportunity of adding something like 20,000 users to the Exetel network without having to add any more upstream bandwidth (IP) but we would still neeed to add the customer connect bandwidth. So this means that we can effectively add customers to the current network plus some connection bandwidth but only around 30% as there is also spare capacity on most links. So it means that pursuing a policy of minimal profits (say $5.00 a month) we can introduce a new range of plans (leaving the current ones in place for the people who obviously like them) that are designed to appeal to people who don't want to download large files every day. I think we could 'frighten' a number of people with this sort of financial advantage. It will be an amusing few days.

With the new 30% lower pricing of IP overall kicking in from 1st July there will be the opportunities of seeing just what can be done regarding finalising some sort of pensioner plans. Every way we've looked at this scenario we haven't been able to find anything that 'jumps off the screen' and says something that is so attractive it's a no brain cell decision. I think it's something we need to try and do (and, yes, I have read the extensive arguments why pensioners shouldn't get "even more benefits" but then those arguments apply to attempting to protect endangered species equally well and we don't share those views).

Our major preoccupation in new plan structres, as it has been for some nine months, will be how to significantly grow our HSPA sales and how certain we can be about Optus network upgrade intentions - which is probably more important but unfortunately there is nothing we can do about that. While I'm happy enough that we will get a sensible level of 'pricing support' from Exetel the key issues of antennae, 'USB modems' and magic boxes will need to be addressed by us. I believe we will have a good antenna solution (subject to last minute hiccups) and we appear to be close to getting a much better price for the USB 'sticks' but the magic box is still elusive. Perhaps we'll get some inspiration from the last of the marketing experts we have briefed on our desire to promote HSPA?

One of the most satisfying things about FY2008 has been the steeply increasing usage of VoIP, SMS via email, FAX via email and VoIP over mobile which validates our investments in research and development and programming over the past few years of itself but has given us a real advantage over the vast majority of the "me tooer" ISPs - which is just about all of them. The investments we started to make three years ago are now delivering us really solid software add ons that provide very real benefits to an increasing percentage of our customer base. We have used these add ons as freebies on our current broadband plans (30 free SMS, 10 free faxes and 100 free national/local calls) and that provides a very large financial bonus to those customers who use them. We can use those add ons (which have a very real cost to us) for the percentage of customers who find them of value (and all current plan users) and remove them from future plans. Those cost reductions, together with other savings we have been able to make, will give us some opportunites to re-look at the other plans we may begin to offer.

Then there's.....sufficient to say it will be a busy few weeks deciding what we should, and can, do to improve the "price proposition" for all of our current and future customers by 'playing around with' the new parameters that now exist.

John Linton

...as John Clark famously says when sending up politicians in mock interviews. (the Labor politicians who are now interviewed by the usual left wing running dogs on commercial TV now UNFAILINGLY use this insincere phrase at both the beginning and end of evey such intrview sending themselves up better than John Clark ever could!

We returned to Sydney last night and began to catch up on things of a general Australian nature this cold and blustery Sydney morning. Exetel's Australian business was very strong last week and from what I read while I was away no new depressing news about the economy or the communications industry reared it's head.

As we get closer to establishing a Hobart PoP I was interested in this 'non-news':

http://www.itnews.com.au/News/103835,conroy-reveals-tassie-fibre-network-close-to-launch.aspx

and particularly by this comment:

"Conroy confirmed that some 250,000 Tasmanian homes and businesses would be connected via the FTTH rollout"

Now I realise that Conroy ranks third behind Krudd and the Whiner for making more ludicrous and untrue statements per mouth opening than anyone who has ever been in Federal Politics but I am wonding how he could possibly back down from this one...I don't see how he could. Of course "signing an agreement" is meaningless in terms of time frame for a delivered service and I understand the need for some sort of action before the next election but isn't this statement a little 'cart before the horsish'?

Unless I missed something while I was in Sri Lanka I thought it was still some time away that Labor was going to appoint a NEW 'committee' to investigate how a FTTN should be built (and presumably what it might cost) and that such a 'report' was some six months away - so I'm not sure I understand how a part of a national network can be built before the overall network is designed and costed. However the Kruddster is always long on wild promises and forever short on facts and details so I am guessing the answer to that conundrum is that Tassie will be a massive standalone pork barrel exercise to 'sweep' the five Tassie federal electorates come the end of next year.

So, let's assume that Stupid Stephen signs a deal to give the Tasmanian Government one of 'his' 43 billions to deploy a FTTH to 250,000 Tasmanian homes - because that is headline material and is easily enough done (a billion dollars isn't very much money in these days of the Kruddster's hand outs - the way Labor defines a billion dollars these days it isn't even 'real money'). You'd have to think that this subset of the NBN2 FTTH service can be done fairly quickly in at least Hobart and Launceston using the electricity conduits already in place,

So this becomes interesting. Who gets to define the pricing to the wholesalers who will be providing the end customer service and on what basis will that pricing be set? For Labor to survive politically at the next election they have to have two things:

1) Some sort of example that an NBN2 is actually buildable in some acceptabe time frame

2) The pricing will be acceptable to the end user and give some sort of return to the infrastructure owner

The Macro math (and I know it isn't real) gives you a basis for working out the cost per end user of laying the cable and lighting it up is of the order of $A4,000 per end user and the cost of operating such an infrastructure is somewhere around 12% of the build cost plus, say, another 6% for the interest on the build cost giving a per month 'port' cost (before any profit to the infrastructure owner) of something like $60.00 per month operating cost. As, you would think, the infrastructure owner would want a profit from this investment (Telstra said 18% - Optus said 12%) add something like $A7.00 to reach a wholesale all up cost.

So, let's assume the Tasmanian government sells the TFTTH to selected (I wonder what the selection process will actually be?) ISPs at $A70.00 a month. Pretty expensive huh?...compared with ADSL2 that costs something like $15.00 a month for a naked service. Never mind. A competent ISP's COST of bandwidth (bearing in mind there is still the need to cross Bass Strait and I'm not sure that that cost has been worked out by the Tassie government yet but I doubt it will be too different to the current BassLink pricing) is unlikely to be less than $A1.50 per gb.

So a 10 gb download service on the FTTH is unlikey to sell for less than $A110.00 per month (inc GST)

Now that's a bit better than the $A180.00 a month being bandied about by various parties before I left Australia but it still is unlikely to thrill too many people who might be looking forward to the Kruddster's "Australia will lead the world in communications infrastructure" arrant nonsense. Short answer is such pricing can't possibly 'fly' and Labor's NBN2 may as well be called Dodo if it ever gets built.

Now anyone can nickel and dime me to death on the pricing assumptions I've used - don't bother - the costs will be known in a relatively short time and no speculation will be needed. But if you really think the 'back of a bus ticket costs' I've thrown together above are very far off the mark just work your own figures out based on whatever bases you wish to use.

I would be delighted if through a combination of political expediency and the usual electioning smoke and mirrors Labor decides to make the Tasmanian FTTH an election winner and price it close to (non-Telstra) ADSL2 - and I think that's a possibility - but only to win an election. I don't think "main land" pricing, which they don't have to deliver prior to the next election, will be less than $110.00 a month.

It would be ironical if Tasmania got lower cost internet than the rest of Australia this time around though.

Then again....based on Labor's track record to date it could just be that they've set the Tasmanian Labor governemnt up as the fall guy for any 'non-delivery' in structure, and more importantly pricing, that may occur between now and October of next year.

John Linton

.....we are all better off now than a year ago...

..at least according to Phil Ruthven in this article I read before the plane took off yesterday to return to Australia:

http://business.smh.com.au/business/saying-good-buy-to-the-recession-20090520-bfrr.html

"Phil Ruthven said the average family is $11,000 better off than this time last year, thanks to lower home loans and falling petrol prices. Ruthven said the severity of the downturn had been "grossly exaggerated", and that it was the "most gentle recession".

So there you have it - a solid explanation for why Exetel's business has continued to grow, at a slightly faster rate, and why we have seen no deterioration in payment defaults. I found that very comforting  - for a few seconds - but then I had to wonder why the Kruddster thought it was necessary to mail out over $A20 billion in recession relief hand outs and announced a $A58 billion budget deficit? I also wondered whether those people who lost their jobs at the very large number of companies that have announced retrenchments would agree there was no recession or "adverse financial circumstances" as I hear the Whiner refer to the current situation recently.

I still don't have a clue about what is going to happen in Australia and how Exetel should therefore conduct its business for the remainder of this calendar year so I discarded the newspapers and closed my eyes as the plane took off and we flew out of Colombo yesterday at 1 pm. Because of the time difference we are, as usual, having to 'over night' in Singapore to wait for our connecting flight to Sydney later this morning - one of the annoyances of this particular route.

We had a very productive and very enjoyable 5 days in Columbo reviewing the progress of the Sri Lankan operation and attending to the 'loose ends' that are still fairly loose despite our best efforts - however they are closer to being 'tied off' now than when we arrived. There are now 24 Sri Lankan personnel in the Colombo office (plus one Australian) and we signed an extension on our lease for another two years for the current space plus another 50% more from 1st November 2009 for adjoining space once the current occupant moves out. We will fully use up the current Colombo floor space before then but we will, temprorarily, move away from the one desk/one employee basis until the new space becomes available which, because of the shift staffing, isn't a major inconvenience. From my observations over the last few days it is a very happy office with very happy people - it was really good to see that.

There is a long way to go to upgrade the knowledge levels of all of the SL personnel - which is true for any growing commercial enterprise at any point in time - and over several discussions with the new GM and with the Australian head of operations in Colombo I think we have improved our plans on how to best accomplish this - both for our Colombo personnel and for our customers and prospective customers via major revisions to our web site. Those discussions were very valuable and, again, emphasise the value of different perspectives on issues and the best ways of addressing them.

I felt the same way as Phil Ruthven does about the Australian economy - I think everyone within Exetel and every customer of Exetel is much better off now than we were a year ago. If anyone had suggested to me the results that have been achieved in setting up and operating a support business in another country 12 months ago would result in what I see today I wouldn't have believed it would have been possible. I would have been more than satisfied with 50% of what has actually been achieved. From what I saw over the last few days I think we are on track to complete the second phase of setting up the SL operation by the end of this calendar year to a point where we can consider moving to the last phase at the start of calendar 2010.

The third phase is to provide 'back end' services to companies other than Exetel Australia and to fully utilise the time differences as an operating plus to provide services to UK based companies. As I have mentioned in past 'musings' we have an interest in doing something with HSPA in the UK/EU at the appropriate time and while in Colombo this trip I spoke with the UK contacts I have been discussing the possiblity of doing business with on HSPA services in the UK. They, among many other things, are interested in 'out sourcing' their HSPA provisioning, billing and support services to one of the many, many call centre service providers in India and they have been following our progress in both setting up HSPA service provision in Australia and, with much more interest, our abilities to make all HSPA 'back end' services avaialble in Sri Lanka (they also want to buy our automated 'back end' software and the provisioning and support processes it interfaces to).

Depending on what happens over the next few months we will make a decision on whether we accept a deal for them to provide the infrastructure to us to sell HSPA services in the UK based on us providing them with our HSPA provisioning and support software and systems and also providing personnel and management in Colombo to use those systems to provide provisioning/billing/support telephone and email resolution services.

Before this visit I would have said the Colombo operations ability to providing such support to another company was at least twelve to eighteen months away but I have been so impressed with the progress made since we were here only three months ago I am quite optimistic that we could be ready to do something along the lines being proposed within a few months.

So we get on a flight back to Australia later this morning with more optimisism than when we left last Saturday. Always nice to have a very satisfying week every now and then.

John Linton

...or is that wording just 'spin' for not thinking through the problem carefully enough?

The new ability we put in place to allow a user to select the timing of their peak/off peak period has been implemented with no 'hitches' and has been utilised by a growing number of customers - that has been a very positive reaction to the ability to choose. Exetel has been a 'leader' in providing significant 'free down loads' to our customers since we introduced an initial 'free download period' in March 2004. I see, some 5 years later that AAPT has come up with that "new" idea:

http://www.itwire.com/content/view/25133/127/

though their restriction of 2 am to 8 am is far less generous than Exetel's original offer (unlimited from midnight to 8 am) and nothing like as beneficial as Exetel's current offer of 60 gb usable from 12 midnight to 12 noon. Of course, various other ISPs have various 'off peak' offers that are generally pretty useless.

The basis for offering 'free off peak' downloads is blindingly obvious - at least historically. For as long as I have been associated with the supply of internet services to residential customers the period of peak usage has been between 7.30 pm and 11.30 pm with the zenith being some around 9.30 pm. So almost every ISPs usage graph showed a bell curve with the apex pf the bell being around 9.30 pm. Financial controllers (or in my first exposure to this issue - the CEO) looked at all the white space surrounding the 9.30 pm point on the MRTG report and was appalled at the waste of money that report conveyed to them - that all of that money spent at other times to cope with the peak time was wasted and you MUST DO SOMETHING ABOUT IT!!!!

There was, of course nothing you can do about it in 1995 except to stop buying more bandwidth and therefore watching the top of the bell curve progressively 'flatten' giving the illusion that less money was being wasted and that was true as long as you ignored the choruses (chori?) of complaint from the users whose packets were being dropped to create the illusion that more users were being provided services at the same bandwidth.

And so the first glimmer of the term 'off peak' began to appear some time in the late 1990s where the more imaginative and eninerring competent (and billing competent) ISPs began to tell their customers to use the time between midnight and 8 am to download and they would be charged less......and 'charged less' eventually became charged nothing. Bear in mind this was a dial up world and file downloads were then becoming more 'popular' and, in their way, were becoming as big an issue as P2P in today's broadband world.

However the concept of using the "dead" band width was well and truly learned by the dawn of the current century and the advent of broadband made it an even more important methodology of dealing with file downloading and then P2P made it essential - for a large percentage of ISPs. Obviously the founders of Exetel were well aware of this scenario and were well aware that if we wanted to offer the lowest download per dollar we would need to find a way/ways of utilising our 'dead' bandwidth which while the price of IP had fallen a great deal by early 2004 was still a significant cost. Even today it is a quite significant cost because of the very significant growth in average monthly downloads per user.

So for over 5 years we have done everything possible to encourage our users to use 'off peak' times for their file downloads and I have to say that over that time we have succeeded so well that we have indeed dramatically reduced the peak usage in the 7.30 pm to 11.30 pm period to the point where it is no longer the busiest time of day for usage of our bandwidth. A great result.....pity that 12 midnight to 12.20 am is now the peak usage period and it is actually higher than the old peak usage period used to be! We didn't actually solve the problem we just moved it to a different time.

We are considering modifying the off peak download allowance to reflect the cost to Exetel of the 'unused' bandwidth in the early hours of the morning versus the 12 midnight to 12.30 am period which is now the highest period of usage of the network - far exceeding the 'old' peak usage period of 7.30 pm to 10.30 pm that has held true for as long as I've been associated with internet service provision.

There are no 'firm' plans to make further changes but one possible change would be:

12 midnight to 12 noon - 18 gb

1 am to 1 pm - 36 gb

2 am to 2 pm - 72 gb

or some other arrangement and we will be discussing this with our customers (or at least those that are interested over the next week or so here:

http://forum.exetel.com.au/viewtopic.php?f=4&t=32147

IP bandwidth is about to become some 35% 'cheaper' and the caching we provide together with P2P controls change the cost equation very significantly....and it certainlky has to. By the end of June we will be providing in excess of 4 gbps of IP connectivity to our users at peak times compared with a little over 2 gbps some 15 months ago - a growth of almost 100%. Our broadband user base has only grown around 35% in that time and even the very significant cost savings delivered by caching and lower cost IP haven't kept pace with end user demand.

It appears to me, sometimes, that there is no solution to this issue and all we've managed to do since 1995 is to move the 'white areas' to a different position on the MRTG report.

John Linton

....making a comeback?.....or did it never go away for some companies?

I was sent a link to this article yesterday:

http://online.wsj.com/article/SB124269038041932531.html

which was interesting in a sort of odd ball way but it jogged my mind on another of Google's much read recommendations that is described here:

http://www.msnbc.msn.com/id/10296177/site/newsweek/print/1/displaymode/1098/

which I looked up and re-read and then considered for a minute or two before, yet again, wondering who dreams up this sort of arrant nonsense and then how on Earth does it get published? I would be the first to agree that I am probably long past the age where flexibility of mind is one of my principal capabilities but I would not agree that is the case because of anything other than longer experience and far more knowledge gained over the past ten years rather than the hardening of mental 'arteries'.

It is quintessentially stupid to make such broad brush statements about the infinitely complex and impossible to decipher vagaries of human interaction. Perhpas the writer of that tosh (or based on the underlying principles being pushed), the writers of that tosh was/were using irony as a dissemblance - but I very much doubt it. My views of human resources departments have been expressed many times before but to refressh your memory I think:

The first Human Resources Departments was created to serve a two fold purpose. It's first purpose was to find employment for people within the company that were incapable of actually doing anything productive for the company. The second purpose, and the reason such incompetent people weren't just fired for non-performance, was that they could hide the fact that most if not all line managers within the company hadn't got the slightest idea of how to select new employees and by placing that responsibility in the hands of another department could be absolved from any blame for selecting new employees who didn't work out.

This in turn led to the newly created Human Resources department being forced to invent the 'hiring via committee system" in place of a rational hiring process done by that rare individual who might actually know how to do it. Under the 'committee system' several people were required to interview a potential new employee thus formally splitting the blame for wrong hiring decisions among as many people as possible and further obsuring the fact that if it's hard to find one person with the skills to hire new employees how do you actually improve that by using multiple people who don't possess those skills? A committee system actually ensures you hire the very worst candidate for any position because of the way basic human nature works.

My view is that few people are 'good at hiring' but that adding more people who 'aren't good at hiring' to a hiring process isn't going to improve anything - it can only make it much worse. The only person who should hire new personnel for any company is one of two choices:

1) If there is a person with a demonstrable track record of making good hiring choices then he/she should do the hiring.

2) If there isn't a person like 1) above then the only person who should hire is the manager whose job depends upon the people for whom they are responsible working effetively.

Problem solved.........

.....but of course that doesn't happen in many, if any, 'modern' companies where ever increasingly sophisticated methodologies and processes have been developed over the last 63 years to ensure the maximum amount of money possible is spent on hiring the least suitable people from any applicant list - or that's how it seems to me.

While I seldom get involved in hiring people for Exetel these days (and we definitely don't have an HR department or even person and I am content that we use method 2 above) I did do the hiring of the sales trainees we selected three months ago. Because of the process expected by applicants these days I did actually interview/have a chat with prospective employees and I did try to make that interview time of a respectable length. My view hasn't changed that you can determine from a reasonably informative resume whether the applicant will be hired or not and nothing can be learned in an interview that will change that view (other than some highly unlikely personal characteristics of the applicant).

Nothing has changed. Bright, well educated, self motivated people from a sensible background will do well - others won't. Everything a prospective employer needs to know should be in the resume or should be capable of being found out via two or three questions at the interview. Why is a 'committee' needed? It clearly isn't.

Maybe you have to have 20,000 employees and sell a product that has no material cost to produce to need to do the things referenced in the first article and you have lost touch so completely with what is actually going on in your company that you really do the 10 things cited in the second article.

PS: By the way, did you notice the MAJOR give away in the second article that the author(s) obviously had absolutely no credibility in what they said because of one MASSIVELY incorrect and stupid statement?

John Linton

.....not quite as recession proof as it used to be perhaps.

I read this earlier today:

http://news.yahoo.com/s/nm/20090514/bs_nm/us_bt_results

which effectively reports on the quarterly loss made by British Telecom which used to be the monopoly national carrier in the UK. It isn't the fact that even a recently 'ex' national carrier in a huge market (compared to Australia's) can make a loss in tough times (caused by a valuation write down) but the casual way the article deals with the fact that BT has recently eliminated 15,000 jobs and now plans to eliminate a further 15,000 over the coming twelve months which, if I'm reading the figures correctly is around 15% of its original employee starting point which had previously been 'downsized' over ten percent prior to the latest round of 15% cuts.

So it's obviously possible for a national momopoly to staff itself with 25% more personnel than it needs and still make a gigantic profit. I guess that simply confirms what is always said about monopolies being the most inefficient way of delivering anything to anybody.  However inefficiency in a factor of both monopolies and every 'size/power' level from start up to 'second largest' in any area of endeavour and is not the sole prerogative of monopolies. My, personal, view is that inefficiency and flabby personnel structures exist in every sized organisation except in, perhaps some percentage of those that are owned and operated by someone who funds their own business and is closely enough involved with all areas of it to not allow 'flabbiness' to creep into it.

I could be quite wrong but I have never seen any other explanation of how small companies operate leanly and effectively for some years and then, almost in a blink of an eye, double their personnel without seeing any parallel in business volume growth. I am very conscious of this tendency in small companies as I am heavily involved in one and see all the signs I referred to above. Some consultants refer to this phenomenon by a range of fancy names and describe it as an inevitability in the life of almost every commercial entity that has ever survived beyond a few years. At Exetel, being aware of this inevitability, we have always measured our business by some efficiency factors such as revenue per employee, revenue per salary dollar, number of customers per salary dollar split over sales, support and administration. Measured in those terms we have maintained the Australian company's efficiency for over 5 years - slightly improving it from year to year and now achieving levels that are, as far as I can tell, superior to most measures of 'world's best practice' (which I actually think means 'USA best practice')

Using such efficiency factors allows a sensible manager to detect very early whether, as they grow, efficiency is being lost or, obviously in rare circumstances, being gained. I was always very concerned when we decided to move much of our back office functions to another country with only sparse contact with the 'mother' company that along with an instant loss of knowledge that would, inevitably, be involved, the more important basic 'ethos' of whatever it was that made Exetel successful would be lost and therefore along with the loss of ethos would be the loss of the efficiencies and advantages that had made Exetel Australia whatever it is today.

Now the more cynical (or rational as I'm sure they would prefer to describe themselves) of people might well suggest that small companies such as Exetel delude themselves if they actually believe they are 'special' in any way and that a few years of operations in a start up mode are incapable of producing anything as ephemeral as an ethos or company culture. Such people could well be correct. My view is that Exetel has been built along very unusual lines (which are very rare in commercial enterprises) and the underlying methods of operation have been the reasons we have survived and grown when virtually every other communications company (I actually think EVERY other communications company but my knowledge is not universal) that started up since 2003 now no longer exists at all. So I am of the opinion that there are actually 5 very different things that Exetel does that are very important to our continued survival, let alone growth and those things were missing from the 500 or so communications companies that started up and then disappeared over the past six years. 

I am very conscious of this scenario after only two days in Colombo where our Colombo company has grown from 1 person to 24 people in 10 months (something it took Exetel Australia three and a half years to accomplish). While I see much that is admirable and I have no real complaints or misgivings about virtually any aspect of the Sri Lankan company (and I think the people are exceptionally good at their jobs and are also very nice individuals) I also see very little that is "Exetel" and much more that is what I have never particularly liked about commercial enterprises generally.

Of course that was always going to be the case and I suppose I always knew that it would be the case and I'm not, for one moment, expressing disappointment or any other negative view. What I am finding is that it would be very simple and probably take no time at all for Exetel in Australia to change from the things that, in my opinion, have made it whatever it is today to something quite different and quite likely to become quite unsuccessful over a not very long period of time. So these few days, have already, taught me a great deal about what not to do both here and in Australia when I return next week end.

One of the first things here is that I am going to put in the same 'efficiency' measures in SL that we use in the Australian company.

There, almost certainly, never will be a "Sri Lankan Exetel" - the challenge will be to build something quite different but hopefully as good in it's own different ways as I think Exetel is in Australia. I now have a better understanding of what makes that happen.

PS: The civil war in Sri Lanka was 'offially' declared over today and the following summary may be of interest. Personally, I find it biased, but not as just plain untrue as most comments on this terrible situation:

http://online.wsj.com/article/SB124276225317535897.html

John Linton

It's nice to be back in Colombo for a few days even though the time allowed for each trip always seems too short to be comfortable for the various things that need to be done. However we got through almost everything that was planned for 'day one' and will be in better shape to address the 'day two issues' because of it. One of the issues we need to deal with is the business plan for the SL company for the new financial year and, more specifically the investments we will need to make in Sri Lanka over the coming twelve months. Of course our investments are trivial but, to us, they have to be carefully planned as the financial situations that may develop in Australia over the coming months remain of unknown impact(s) and we must remain cautious - though my every instinct is that this is one of those rare times not to be.

Looking at our trivial sized investments (in both Australia and Sri Lanka) was put in to perspective for me when I read this article on some of the problems confronting one of our two major suppliers in Australia:

http://online.wsj.com/article/SB124229337255318993.html

I, of course, have a very, very limited understanding of Optus Australia's investment programs and what little knowledge I may have over the years is almost always confined to discovering via Exetel customer dissatisfaction problems with 'underprovisioning' of various aspects of the Optus ADSL2 and now the HSPA networks. Having read the article I can better understand the difficulties that Optus/Singtel face and why the problems we continually come across are not likely to be addressed in the short term.

I reach this, personal and based on no knowledge other that what I am citing, conclusion because $US750 million dollars in cash (plus borrowing abilities of unknown but pretty large multiples of the free cash) are still not very large in terms of the investments needed in the communications infrastructures Optus is involved with in Australia that Singtel has to fund (and I have no idea what additional infrastructures that Singtel is involved with around the South East Asian region). It may well sound silly for someone like me who thinks Exetel's investment of $A2 million in buying and fitting out new premises is 'significant' to dismiss a few billion real dollars as being 'trivial' but in the context of the wireless infrastructure that Optus need in Australia - Singtel don't seem to have that much money available to support any significant Australian growth.

I am expressing a purely personal opinion based on practically no facts of course and I have already expressed a view that the notional, plucked out of thin air, $A43 billion stated by Krudd won't actually buy very much in the context of a FTTH network development which is the proper context for a theoretical $A1 billion Optus network investment. What this meant to me was that while Exetel are planning to grow an HSPA business in Australia based on the Optus network we may have missed a vital piece of information - which is does the network we are planning to use actually have the capacity to deliver even the modest demands the upper end of our estimates suggest would be needed?

This is an easier perspective to have when you are in a city where the 14.4 mbps speeds are certainly present but the capacity of the network I am logged into can't sustain them and drops out more often now, in fact much more often, than when I was here only three months ago. My personal use of the Optus HSPA network (for both data and VoIP) since September 2008 in Australia has been an unbroken success but I'm beginning to wonder whether this can be sustained as Optus add more users at a faster rate. It isn't something that I have seriously considered prior to my experience with the SLT service over the past 2 days (and remember I have been using it for over 15 months now - at intervals of three months - and have seen it grow from 3.6 mbps through 7.2 mbps and now to 14.4 mbps with no problems).

SLT  may be a 'mine shaft canary' in indicating that HSPA is easier to roll out and attract customers than it is to continue to find the  capital investment needed in network infrastructure upgrades when the service "takes off" by being accepted by an escalating number of users and that the capacity problems I am experiencing iin Colombo are related to an inability of the major provider to keep adding capacity in 'lock step' with the adding of more users.

All pure speculation but that is what happens when you 'leave home' - you get a different point of view.

John Linton

.....no - it's just a strangely shaped low lying cloud.

Just something that passes through your mind on most landings and take offs at Colombo airport since we have been coming here - and the airport is a favourite target for the LTTE even now the full scale war is virtually at an end. But we landed safely and courtesy of the lack of traffic on a Sunday morning got to our hotel in record time.We were greeted as long lost friends by Adrian, the 'floor manager' and the check in staff and it was nice to be greeted so warmly - professionally charming or not.

My SLT wireless internet still works and is much quicker than my Optus/Exetel service in Australia with the SLT (Sri Lanka Telecom) network now at 14.4 mbps (or higher) in most of Colombo but it has some sort of problem in dropping out at the hotel we are staying in so I am having to use the expensive hotel service to write this. SLT's prices have dropped quite considerably since we were last here with a 14.4 mbps service with 5 gbs of traffic costing the equivalent of half what we charge in Australia though you have to take in to consideration the disparity between average take home pay in the two countries. As a further comparison their unlimited download ADSL1 plans are around $A35.00 per month.

A colleague in Sydney sent me a reference to the latest on LTE:

http://www.betanews.com/article/Verizon-Wireless-LTE-deployment-will-be-ready-in-2H-2010-says-CEO/1242409436

and a brief reference to the status of the VoLGA standards that may be in place before mid-2010 - at least in the EU and, presumably S E Asia. I've been logging in to some of the web casts and I'm trying to find the site for the Berlin symposium starting tomorrow to see just what may be possible in the not too distant future in delivering 'standard telephony over LTE/4G or whatever it will eventually be called. While I realise that Optus may not be able to deliver LTE for some time, if ever, it will certainly be deliverable in other countries, including the UK, and more than likely in Sri Lanka and Indonesia and we have some interest in those countries in the not too distant future perhaps.

It's still very early in Exetels provision of HSPA services in Australia to make any real prediction of how well the Optus HSPA nertwork will develop and just what it can be used for in terms of the various demographics. We 'need' VoIP to work well over HSPA as we think that getting rid of the end user's land line is going to be a key part of the 'selling price equation'. As those people who use or are familiar with Exetel's efforts with VoIP over the past three years would know - we have made a lot of progress in providing VoIP at the lowest prices in Australia (for some user demographic call mixes) via the 100 free wire line calls and the free SMS and free FAX services that are targeted (in the longer term) at the residential user replacing their wire line services, with a wireless service that is able to also offer additional services at lower costs than any other ISP/communications service provider.

I don't use GSM mobile to make calls from my mobile and haven't done for over 6 months and am more than happy with the results I get - basically neither I nor the person I'm calling can notice any difference. That, in itself, is a pretty fair indication of where the technology is going but the things that Verizon, and others, are now talking about are far more far reaching in any number of future scenarios. Irrespective of the 'back of a bus ticket' wild estimates of the cost, the time frame and the sheer logistics of Labor's NBN2 and therefore all the craziness that will inevitably go with it, the real facts of today are that most Australians will neither need nor be able to afford a fibre communications service in my life time.

Whether ADSL2, with all its Telstra generated pricing baggage, can be delivered more cost effectively in the interim is a question that I haven't heard anyone in this industry address in any detail - the few that have talked on the subject wouldn't be out of place at a Labor cabinet meeting given their preference for false logic and rhetoric over demonstrable fact and careful analysis with credible costings and planning horizons. HSPA is at least currently only an ADSL1 type of service in terms of data but with some very interesting telephone capabilities. However, and understanding that any current opinion is now redundant until such time as a credible time frame an actual build plan for an NBN2 is in place (if in fact that ever transpires), any planning that incorporates the future development of HSPA into 4G/LTE in Australia is a waste of time.

The joker in the pack (no pun or other reference intended) is that VoIP over wireless (should that become widely possible) makes all of the current ADSL2 (and ADSL1 for that matter) roll outs/add ons/network widening/whatever highly suspect as all of the companies involved in such roll outs are, one way or another, dependent (either directly or indirectly) on Telstra or a few others receiving wire line rental and wire line call revenues and therefore, pretty much the same Australian carriers are being forced to make decisions, today, on whether they allow their new wireless technologies to deliver voice calls because if they do then they need to scrap the basis on which they have been building out wire line based services.

Interesting scenario for Australian carriers and some few others. Whatever they do with broad band data over fibre/copper/cable poses significant problems for their 'other' service - mobile and wire line voice calls - and of course vice versa. Throw in the new Australian government owned carrier and the whole planning scenario becomes near enough impossible which, as any person who has been around the Australian communications industry for the past twenty to thirty years (or has read about it) knows only leads to one outcome.

Nobody invests a cent in anything.

John Linton

......and it remains a spectacularly efficient place from the precision of the aircraft pulling up at the gate to the fact that your luggage is on the conveyor 8 minutes after you land which is the time it takes you to walk from the aircraft to the exit via an immigration queue of 2 or 3 people....and 20 minutes later you are checked in to CBD hotel and ready to go out to dinner....at a restaurant that is better than any place in Sydney at a much lower cost. So back to the hotel to, by accident, see the last few minutes of the ManU - Arsenal game and to see ManU win their umpteenth Premiership courtesy of the 0 - 0 draw.

The flight on Singapore Airlines was as pleasant as aways, if there is a better airline then I've never travelled on it. As usual I slept/dozed for the majority of the flight and thought about Exetel for the periods I was semi-lucid. Without internet connectivity for an eight hour period you achieve a slightly different perspective of what is going on and what contribution a tiny company like Exetel can make to any aspect of an Australan user's data communications experiences.

Essentially the small group of people that 'is' Exetel can do very little to improve broad band usage in Australia after the few years we have been in business to date. What may be possible is that we can over the coming five years do a little better in reducing the overall cost that an end user who is able/willing to put some thinking in to what they should spend on data services between now and the end of 2015. While that probably won't happen it is a possibility - and to reduce the costs of using basic data and voice services for the 'average' Australian residential user has to be a sensible basis for attempting to remain in business for tiny communications companies.

Strangely, as you drift in and out of sleep on an intercontinental flight, it seems that no-one in the Australian communications business seems to want to reduce the costs to the end users - their universal aspirations (if you can use the word aspiration in terms of universal commercial avarice) seem to be to make as much money for as little effort as possible. Too harsh? Possibly - but what else can you, or anyone else, see in the various pricing and other 'machinations' of the current providers of communication services in Australia? Everything reported by the ACCC, the TIO and ACMA seems to indicate that communications companies do everything possible to mislead their customers and potential customers at every opportunity - the word "free" has become so debased it should be removed from the dictionary.

The ACCC describes the Australian communications industry as the most 'criminal' of all industries they oversee operating in Australia - is that too harsh? Apparently it's the way the ACCC see companies such as Dodo (surely the worst company that has ever existed in the history of Australian commerce), Telstra (remember the recent Federal Court judgement that said that Telstra Wholesale had been passing information about Optus numbers to Telstra Retail for ten years?) and even Optus with its obfuscations about its inadequate provisioning. How can that actually be possible that one industry is singled out by a Commonwealth Authority to be described in such awful terms? It makes someone as insignificant as me feel extremely uneasy to be 'lumped in to' such a grouping. What is the point of spending your declining years being involved in an industry that is described in such damning terms? The simple answer is that there is no point for anyone with any semblance of an ethical understanding of the purpose of life being involved in dealing with a bunch of people/organisations that have no ethical view of any aspect of life at all.

Maybe I've just lost all perspective on what is ethical and what isn't. It wouldn't surprise me - I can't remember the last person in the supply side of Australian communications services I believed had any concept of ethics, let alone morality, at all.

It's a very sobering thought to think, after all these decades, that you are going to end your commercial life feeling ashamed of what you are involved in.

The short flight tomorrow won't allow for sleep so perhaps these depressing thoughts won't make a reappearance.