John Linton
....let alone making today's decsisions.
I think that the only thing worse than being responsible for various aspects of running a small Australian communications company in difficult financial times is running a small Australian communications company in times that are not particularly difficult but might become so. In uncertain times it seems to me that you actually can't make any decision without continually reconsidering (I suppose I really mean worrying) about whether you've done the right thing/made the right decision. As there are always new things that need to be considered/worried about it doesn't take long for what remains of your mind to be fully occupied with decisions that have already been made rather than leaving the requisite time for decisions that have yet to be made and often meaning those decisions don't get made within the required time frames.
...and I'm not referring to routine decisions such as the recent decision on which IP provider will we use or what pricing we will set for our various products and services and the other day to day decisions that can have easily understood criteria applied to the decision making process.
One thing that has been 'under consideration' for almost six months is what, if any, sort of advertising/promotion Exetel should do for the HSPA services which we believe are important to our future. Though as things tend to do in this industry, even the assumption that HSPA is important to Exetel in Australia is increasingly being re-thought - but that makes everything far too complicated so we'll take it that HSPA is important - at least for the time being. We believe that HSPA is important because we can add more value to that service than any other. By adding value I mean that we can source the USB modems at a lower price than our wholesaler is selling them to other wholesale customers and we can source Yagi aerials (for those customers who need them) at much lower prices than are available anywhere else in Australia. One day we will be able to source the 'magic box' at a very low price as well.
So our thinking has been that HSPA in regional/rural Australia is not something that is best sold by Dodo's/Virgins/Optus Retail/Vodafone Retail/BigPonds saturation advertising but really requires a local presence (in our case an Exetel agent) who can sell the 'easy' customers via a shopfront or his/her usual methods but can also make very good profits by selling the hardware (aerials, modems. ATAs) at high margins (courtesy of Exetel's "buying power") but still at end user costs below those offered by anyone else.....and of course they can sell their installation services where those are applicable. Plus - we will pay for their advertising which will promote their business generally. It seemed like a great combination when we 'dreamed it up'.
Now, one issue that has played a major part in the uncertainty has been the likely pricing by the various carriers. It seems that all of the carriers (with the exception of '3') have exhausted their "I can offer more for less than you can" promotional phases - at least for the time being, and are 'content' to sell at their current price points at the moment. While that is of no help to Exetel (all the carriers plans to end users are at lower costs than we can buy at wholesale) it is at least some sort of 'stability' compared to the whole of 2008 and the first 6 weeks of 2009. Perhaps that will not turn out to be true but even if it doesn't we believe that the hardware pluses above plus the free 100 VoIP over HSPA calls plus the free faxes and free SMS will make a very powerful regional/rural offering backed by advertising and 'feet on the ground'....that's the theory.
We originally (back in October 2008) planned on spending some $350,000 over three months to promote HSPA in regional/rural areas of Australia. As we have shlly shallied about what we would exactly do we have realised that we actually don't know how to most effectively spend that money and having talked to a number of "experts" have been advised that we need to spend closer to $A2 million over 6 - 9 months to achieve the aims we believe are the minimum we need to achieve.....to me that is a seriously scary number and if I was ever going to spend $A2 million of my own money it wouldn't be on promoting HSPA (or anything else for that matter) it would be on a small house in the South of France or the Caribbean or something of personal comfort and ongoing value.
It doesn't help that Exetel has never spent any money on promotion/advertising and that no-one in our small company has any experience at all in that sort of activity.
However, we need to do something along the lines of country advertising and promotion and also need to put in place the processes that are required to deal with the results of those activities and, right now, I haven't got a clue how to do this. I will talk to another 'expert' later this morning and then will have to make a decision on what we will do and, far more importantly, the time frame in which it is possible to do it.
We will run a small sample test by putting a quarter page ad in 5 or 6 local newspapers over the next 2 - 3 weeks in conjunction with some of our regional agents and one test advertisement with our own contact number on it to attempt to gauge the level and types of responses - and that's as daring as we have screwed up our courage to become at the moment.
There are three other similarly difficult issues, of a similar financial impact, that we need to address at this time but they also keep getting deferred as we wait for some indication of what is really going to happen in Australia financially and economically.
They look like having to wait an extra six months for go/no go consideration just as the HSPA promotion has.