John Linton
.....though, to date, Exetel hasn't conformed to that pattern........however others linger on with various, sometimes creative, methods to prolong their survival.
We started Exetel in January 2004 a few months after a company called Unwired raised money to use new technology from a US company called Navini to roll out an 'Australia Wide wireless network' based on that brand new technology. At the time we were interested in a wireless broadband service but in January 2004 they were some months away from any end user offering and were uncertain as to whether they wanted to use a wholesale distribution model.So we waited a few months for them to decide what they were going to do before eventually helping them design their wholesale contract.
I read this item an hour or so ago with a mixture of feelings:
http://www.australianit.news.com.au/story/0,24897,26016942-15306,00.html
I'm not sure whether Exetel was the first wholesale customer to actually deliver an Unwired wireless service but if we weren't we were very close to the first back in August 2004 and we certainly quickly became the 'biggest' over the succeeding months and, even today, we still have many hundreds of customers using the Unwired network even though we stopped offering the service to new customers well over two years ago. If my memory is correct, which it may very well not be, at our 'peak' we paid Unwired something like $A120,000 a month and had around 3,000 customers in Sydney - I noticed our latest bill from Unwired was for about $12,000 - so very sad to see in many different ways.
In the mean time "Unwired" ran out of money several times after using up the not quite considerable capital that it raised to initially start up the service. From what I read in this article Seven has abandoned the concept of revamping the old Unwired service via a WiMax roll out and therefore, presumably, is going to write off the whole of its investment in the Unwired Navini based network and start again using 4G in Perth - an odd place to start up a new network especially when you say you have 60 - 70,000 customers on your 'old' network in Sydney and Melbourne.
There is little doubt that Seven have made the correct decision in abandoning a WiMax roll out in a 4G world but the real pity is that the concept Unwired's founders had six years ago was so correct but they fluffed around with trying to make retail work on a service that should have been wholesaled - (it needed far too much technical support for retail to have ever worked) that they well and truly lost their very real 'window of opportunity'. I'm not sure how much money has been run through over the past six years in trying to establish a viable wireless service but it an awful lot - hundreds of millions if I remember correctly. It just confirms the views that start up companies have almost no chance of getting to five years 'corporate life' - even when they get new capital injections along the way.
Speaking of which I got my annual 'belly laugh' from reading the EFTel annual report - those guys really must think the public really do have the, mythical, memory span of a goldfish. I can't quote verbatim from their previous annual reports but they always announce some sort of 'surprise' loss immediately followed by the statement to the effect that "next year will see huge profit from all our house keeping activities of the past year". So sure enough, the latest report announces another huge loss (over $A5 million) on annual revenue that has barely increased and an increased deficit between current assets and current liabilities. I'm on holiday and am too lazy to try and analyse reality from the bs in the presentation but you can find it here:
http://www.asx.com.au/asx/statistics/announcements.do?by=asxCode&asxCode=eft&timeframe=D&period=W
Looking at the money this company has burned through over the period of its 'corporate life' and the lack of results to show for that money makes a rational human being wonder what the point of the venture is? Obviously not to make the shareholders a return on their investments - there never has been any. As they keep claiming they are the "number X" in this or that invented category of business you would assume there would have to be some reason for wasting so much money - but nothing is apparent.
One thing that really amused me (Slide 15) was their self delusion and/or total lack of understanding of current ADSL2 port costs in pointing out that they had a "cost advantages" over competitors was this:
"ADSL2+ BroadbandNext average port cost $A13.00 (plus $A5.00 Depreciation) per month"
Now, Exetel is a tiny company, (though larger than EFTel) and we have no "advantages of the 6th largest owned network" (what a complete crock) but we, as a wholesale customer of no serious sales volumes, don't pay that much for an ADSL2 port from our wholesale suppliers - and we get no 'preferential' treatment I can assure you. I would have put the cost of an 'owned' ADSL2 port (based on our own investigations of investing in a DSLAM2 roll out) as around $A8.50 per port per month - but perhaps Exetel has much better credentials in terms of
supplier knowledge and far better access to money at the lowest possible
rates. For the EFTel people to publish such a figure means they really are insane if they think anyone with the slightest knowledge of how this industry operates would think it was a "cost advantage".
So Exetel, unlike companies like Unwired or EFTel, for all the problems it has faced over the 5+ years of its existence continues to out perform the conventional wisdom of start up companies in that we have never lost money since the first month of our existence, we have always paid an annual dividend, our business increases each year faster than our competitors, we don't borrow any money from anyone and we have never had to ask our shareholders (or any other company) to bail us out.
Then again, we also don't publish total nonsense in the guise of an annual report on our progress. I've always wondered if the 'EFT' in 'EFTel' is actually an acronym for Ehrenfeld Family Trough?
John Linton .......much lower cost than last year and considerably faster.
We landed at Heathrow at 5.30 am UK time today after an uneventful flight and picked up our hire car and drove West along the M4 with no real plans for the next ten days. We stopped off for an 'English' breakfast in a pretty market town off the motor way and using memory found a remembered place and once again discovered the difference between English straight from the farm food and everything else. We used the time over breakfast to select a hotel and then booked it and persuaded the nice person who answered the telephone to allow us to check in early (it was only 8.00 am at the time) and anyone who has travelled knows that check in time is usually after 2 pm as well as giving us a hefty discount on the advertised room rate which, once again, any semi-experienced traveller knows is always possible.
Our hotel was on the fringe of the old Roman town of Bath and after a shower and a change of clothes we walked in to the centre of the city and re-acquainted ourselves with the amazing remains of the Roman bath complex and its associated temple and then wandered around some of other attractions of the city. We also stopped to buy an HSPA service for me and an international mobile sim for Annette -the rates on the international sim were 10 Australian cents per minute to Australian land lines which is much lower than Exetel buys the same rate for our own international roaming mobile services.
I was interested to see how far HSPA modem prices had fallen since we were here a year ago. Last year I paid 100 pounds for a Huawei 169 - this year I paid 35 pounds for the current version of the Huawei 169 and that included 1 gb of data. If you take the 1 gb's value at 15 pounds then the HSPA modem price has fallen 80% in a little over 12 months. It is just the earliest possible indication of just how expensive Australian HSPA pricing is compared to the EU. The modem I got for my 35 pounds was a 14.4 version which I was eager to try out when we eventually returned to the hotel.
I plugged it in and I selected it as the service for my note book and ran some simple tests from our hotel room. I could get over 6 mbps down on a simple speed test and the general 'feel' of browsing remotes sites around the world was much better than the hotel's wifi connection using an ADSL2 landline service. Very early days and not much of a test as Bath is a city and close to Bristol, a much larger city, but I'm looking forward to using the service as we proceed through Devon and Cornwall where the towns are much smaller and our plans are to stay in remote moorland and coastal/island locations.
One thing that surprised me was that Vodafone don't seem to offer 're-charge' services via the web with the very competent sales girl telling me I could get a recharge in over 100,000 supermarkets and other retail chains around the UK. I need to look in to that as it seems really odd to me that an internet service can't be 'topped up' on line. The other thing is the price of 15 pounds per gb on the prepaid plans I was looking at. However it's very early days and I haven't looked at it in any detail.