John Linton
......and no 'old' views of what happened in the past then it becomes quite interesting to try and work out how you should provide ADSL services in Australia.
The first thing you get to re-acquaint yourself with is that if you're Exetel there is sfa you can do about offering attractive ADSL1 plans because at Exetel's buying levels the costs charged by Telstra Wholesale are so high there is almost nothing that an Exetel can do to provide a service at a sensible price. So you quickly move on to the three versions of ADSL2 - 'Naked', including telephone line rental and telephone line rental with another provider. Of these options, at least for Exetel because of the supplier pricing we have to deal with as a small company the only really attractive service is the ADSL2 'bundled' with a telephone service.
If this view is correct then it does simplify many things for a supplier that takes this approach. One aspect of it is that all the 'savvy' broadband buyers will not want to pay the additional cost of a telephone line because they will all be using VoIP (as indeed even non-savvy users like me do). This is a 'good' thing in many ways because it means that such users (unless they are the dreaded 15 year old males whose parents pay for the connection) will not be interested in connections that include telephone line rental....even when the line rental is half what they would pay normally. Also 'savvy' users tend to download much more than non-savvy users (except those with teen age male children).
So the sort of plan you can come up with for these 'non-savvy' users you can come up with a pretty simple ADSL2 plan that just charges a flat rate per month for the broadband connection of, say $A35.00 for the broadband service and another $A15.00 for the telephone line rental and no charge for data at any time of day but with the proscription that ALL file downloads are restricted 24 x 7 x 366 to dial up speed and are limited to 20 gb per month after which they are 'cut off' for the remainder of the month.
Looking at Exetel's current customers such a plan would suit over 60% of our current users and would, on average, be $6.50 lower cost that is currently being paid and would only be an average of a little over $3.00 more expensive for a little less than 20% of current users. As Exetel, probably, has a higher proportion of 'heavier' downloaders than the market average it appears to me that such a plan would appeal to a much higher proportion of other ISP's users than our current 'added value' plans (which include 100 free VoIP calls as one obvious example).
The other way forward in terms of plans is to offer naked plans (or 'standard ADSL2 with a conventional telephone line charged by another supplier) at a rate of $35.00 per month plus $1.00 per gb of peak usage (8 am to 2 am) and no charge from 2 am to 8am). Again looking at Exetel's "heavier" users this would be lower cost for over 85% of current users with less than 5% of users actually paying more than $10.00 a month more than they do now - which is still far cheaper than any other Australian ISP I can find in an admittedly quick scan of the major suppliers.
So this is simply the results of 30 or so minutes of quick and dirty calculations using a couple of simple data base manipulations to see the effect on the current end users should new users conform to the current user's usage patterns. It needs far more serious work than I am going to find time for while on holiday but it does provide food for thought galvanised by the AAPT announcement of a 12 hour unlimited period which on closer examination isn't as attractive as I first thought - but nevertheless is still very refreshing in the dullness of the meeetoooism of the other Australian ISPs.
Steve continues to progress the discussions with our Australian IP providers on providing bandwidth in new ways and we should be able to at least trial some new processes by early October with the aim of bringing out some versions of "unlimited" ADSL2 plans for November 1st 2009. At the same time it should be possible to provide a range of PAYU ($A1.00 per gb peak/no charge for 6 hours per day) plans for Naked and Other Telephone line provider to completely change the way Exetel offers ADSL in Australia (while leaving all of the current 'old' plans in place for those Exetel users who prefer them).
John Linton
....come from a refreshed mind and strange places/times to think about old issues.
One, of the huge number, of benefits of taking a break once a year is that as the tiredness begins to fall away you remember what it's like to have a mind that can reason clearly again. A benefit of being in a totally different physical and cultural environment is that it helps you regain perspectives you gradually lose throughout yet another brutally punishing mental and physical year. We've been away for 10 days now (11 if you count the flight from Sydney to Heathrow) and instead of the drab North Sydney business area and the even drabber traffic chaos of Military Road we have been immersed in the depths of some of England's most beautiful and spectacular deeply rural landscapes and our only physical contacts have been with people who aren't remotely interested in either Australia or the Australian communications industry. So the contrast between our day time explorations of the Devon and Cornwall moors and woodlands and my brief catch up with my email and then writing this blog becomes ever sharper as each successive day goes by - something I'm sure that every other person who has a demanding 'day job' has experienced for themselves.
Today, because we had idled around too long in the far West country, we needed to do some freeway driving to get closer to London and it was a very unpleasant experience - not because of the freeways themselves but because within 15 minutes of leaving our hotel we found ourselves at a standstill for the best part of an hour (caused by a fatal accident that forced the police to close the A30 near Exeter) which forced us on to a long and very slow B road detour dawdling along behind the heavy traffic in the same boat as ourselves. It had an upside in that we chanced across a beautiful pub on the River Dart with a terrace looking on to a 15th Century Bridge and rapids where we sopped for a fresh trout lunch that we shared with the local ducks who, like Sydney's pigeons and sea gulls, came and snatched food from your hand and wandered around and under the outside tables as if they owned the place. Nice interlude - we found our way on to the M5 only to find 30 or so miles later another tailback due to closing 4 of 8 lanes for maintenance. So a 150 mile motor way/A Road trip ended up taking over five hours instead of a bit over two.
So the humdrum and 'standard' re-intruded in to our lives in no uncertain manner. But being relaxed and revived it didn't produce any effect on me other than one or two muttered comments at the peak of the delays. We eventually reached our selected resting place for the night and a couple of gulped down glasses of something appropriate immediately dis-spelled any remaining ill feeling and allowed me to quickly write down the ideas I had considered while waiting in stalled traffic for so long which revolved around one blindingly obvious situation that perhaps you have to travel halfway round the globe to see clearly. This incredible insight was that there is nothing more Exetel can do to improve the current wire line plans it offers to its current customers other than to slightly reduce the prices over time as/if we get better cost prices from our suppliers.
What we need is to retain our current customer 'types' by maintaining the current plans and offer new plans that would not appeal to current customers but would appeal to different customer types. For over 5 years we have maintained a process of having one main plan type and we have kept improving it to appeal to a wider and wider 'audience'/types of users rather than offer different plans for different types of users. We vaguely realised this some months ago and offered a "no frills" type of plan - but in essence that concept wasn't correct and could never have achieved what we need to do to 'attract' two, maybe three, different types of users. So a few traffic problems (that before I went on holidays would have given me a heart attack) turned out to be a trigger to look at a very old problem in a very different way.
I am hoping the inspiration lasts long enough for me to actually translate the concept into concrete plans.