Tuesday, September 15. 2009ADSL - Has Reached It's Apogee......John Linton ...and according to the latest ABS six monthly report actually marginally declined in total number of users in the period 1/1/09 to 30/6/09. Every time I regret not being 'brave enough' to invest in an ADSL2 DSLAM network the ABS reminds me that all the original thinking of three years ago that ADSL was already reaching its 'sun set' phase was 100% right. Whereas HSPA, effectively non-existent 3 years ago, passed the 2,000,000 user mark earlier this year - the most rapid uptake of any communications technology ever in Australian communications history - at least I think it is - far more rapid than ADSL, incredibly more rapid than dial up internet and even much more rapid the mobile telephony. The ABS bi-annual report shows that ADSL didn't grow at all over the past six months (something I earlier commented on when the various communications companies released their FY2009 annual reports). It makes for an interesting consideration of how iinet, among others, will address their ADSL growth figures in their FY2010 half and full year reports based on their claimed 'annual growth' for 2009 on which they predicted their 2010 growth - as I pointed out Telstra, Optus, iinet reports all showed zero growth in the second half of FY2009 - despite their respective spin spivs dressing it up differently. Now the ABS figures show no growth at all in ADSL it will be interesting to see what happens to all those DSLAMs that have been installed? Some very big cuts in ADSL2 end user pricing as the various ADSL2 'owners' fight with each other for the 'natural growth' that could well not be available. Not that Exetel has gained even a 'toe nail hold' in the HSPA market but it does mean we don't have to worry about our 'investment' in about to rust iron in various Telstra exchanges around the country nor worry about the debt we incurred in taking out a vendor lease to finance that 'investment' - nor do we have to worry about 'cannibalising' our own ADSL2 customer base in seeking to grow an HSPA market share. So three things we don't have to worry about as we attempt to establish a way of making HSPA from Exetel more attractive than HSPA from any other provider - something we have totally failed to do to date. The lack of growth in ADSL will just make it even harder in the HSPA market with the more public statement conscious ADSL2 network 'roller outers' having to put in place an HSPA offering and then play catch up with Telstra, Optus et alia to make their 'new' HSPA offering more appealing than those of the well established vendors. So now Exetel is faced with having failed to benefit from its own decision not to tie its future to its 'own' ADSL2 network but to put its efforts in to understanding and promoting HSPA. Though, to be fair, I believe we do better understand HSPA than we did two years ago and we do understand how to 'market' it better than we did two years ago and we certainly have a lot of the required processes and procedures in place and fully tested in a National customer base environment. We just don't have any compelling differentiators nor do our attempts at generating those differentiators seem to be bearing any serious fruit. I have no ideas (new or old) but I also haven't given it any thought over the past two weeks of holidaying and concerning myself with much more important things. It's clear that we will have to come up with something over the coming few weeks but the current constraints as a wholesale buyer makes it a truly difficult challenge. When you think about what the ABS figures mean in terms of what the larger suppliers will do, you get an unnerving impression that they have never had to deal with a marketplace that just isn't not going to grow but may well start to decline in absolute customer numbers. Only Telstra has had to deal with such a situation recently - the decline in people using telephone line to make telephone calls. Some ISPs have had to face the decline in a residential dial up base but that was a completely different magnitude of problem because that was effectively a one for one swap from a cheaper dial up service to a more expensive ADSL service. Now all of these companies that proudly reported their 15% ADSL growths in FY2009 have to deal with the real possibility that they might have a shrinking number of customers or, even if they manage to aggressively promote their services, thy will have a shrinking revenue as the only way such conditions get dealt with is a vendor 'price war'. Interesting time NOT to have shares in an ISP.
Sunday, September 13. 2009Highwaymen In Rural England......John Linton are NOT a thing of the past! Annette and I have continued our bucolic holiday in rural England but have now returned from the far West Country to the wealthier and more manicured habitat of the nouveaux riche in West Berkshire which among other extravagances, is the home of the English race horse training major establishments which means that the combined value of the horses in this valley are far in excess of the value of the johnny come latelys who have bought up the magnificent residences in this valley. To start our day we drove out to see the Uffington White Horse: http://en.wikipedia.org/wiki/Uffington_White_Horse and spent a pleasant hour or so climbing the hills and looking at it from the various recommended viewing angles before returning to our car to drive on to our planned destination for the day......but we were subjected to an highly unpleasant and, in its way, quite frightening incident from which we were lucky/cautious enough to emerge unscathed. Anyone who has driven on English rural B roads would know that they are very narrow - often only wide enough for one car with recesses every so often to allow two vehicles traveling in opposite directions to pass each other by one vehicle pulling off the road and stopping. Shortly after we left the White Horse site we turned a corner and were confronted some 30 meters away with a tall, emaciated and very pale male with his arms and legs wide spread lurching, zombie like, towards us. It was impossible to pass him and it was only just possible to stop before actually colliding with him...so I jammed on the brakes....and, obviously brought the car to a halt. As the figure in front of us leaned his arms on the car bonnet and we were able to see in detail his wide eyed appearance, dilated pupils and the multiple piercings to his lips and nose it instantly became apparent that this was a big, big mistake. For a few moments nothing happened. Then he shouted at us to "call the police"....still blocking any movement forward of the car by leaning on the bonnet. Annette opened her passenger side window 2 or 3 centimeters and asked him what was wrong while I felt my pulse racing as I realised this was not some unfortunate victim of some sort of accident. He again yelled to call the police and started to move towards Annette's side of the car as if he was trying to make himself heard better and began waving his arms around. The car was still in gear and I had my foot on the accelerator and determined to gun the engine the moment that he was clear of the bonnet. With amazing speed he suddenly moved and grabbed the door handle on Annette's side as I, just too late, accelerated the car which being a diesel takes a second or so to actually respond to a flattened accelerator which gave the apparition time to try and open the door handle and realising it was locked (courtesy of the auto door lock feature standard with this model of an A4) began to rapidly smash his fist into the passenger side window which (courtesy of German glass manufacturing standards) didn't break. Annette had the reflexes and presence of mind to have closed the window before he could reach it. By now the car was doing well over 20 kms an hour and now rapidly accelerating as its 2.7 litre turbo kicked in and the assailant was still clinging to the door handle and the wing mirror screaming incoherent words as he was dragged along by his grip on the passenger side door handle. Finally he let go and, fortunately, fell clear of the cars rear wheels and Annette said that he quickly got up as if completely uninjured as we sped away round the next corner. Annette called the police and described the incident and the assailant and they said they would send a car to investigate and we sped as fast as we could away from the incident without caring where we were heading. Now this happened at 11.30 am near a well visited 'monument' and on a road that carried, comparatively, a lot of traffic. There is little doubt in our minds (at least) that the person intended us real harm and but for auto lock and toughened glass may well have done unknown damage to us. Thinking about it later it was also pretty obvious that he had done this before as his actions were too smooth and 'practised to be happenstance. And, at the risk of repeating myself, this didn't happen in a back alley in the sordid end of a major run down city late at night but on a well travelled road in the middle of the day in a rural area. We eventually found a nice pub and had a traditional English Roast within the comfort and good fellowship that can only be found in an English country pub at Sunday lunch time and tried to forget about the whole thing. I have travelled to many strange places during my lifetime and have, in the carelessness of youth, exposed myself to dangers that I wouldn't dream of doing today. In all those years I have never come closer to a real problem than earlier today.
Saturday, September 12. 2009If You Start With A Blank Sheet Of Paper.....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). Saturday, September 12. 2009New Perspectives - New Directions...........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. Friday, September 11. 2009HSPA In The UK - Part 3..........John Linton
.......and what it may mean for Exetel in Australia. I am still in deeply rural areas of the SW UK (mostly in Dartmoor and Exmoor over the past few days and both my Vodafone and TMobile service are able to keep me connected to the Exetel Databases and my email as well as allowing me to write this blog often from quite surprising places (like the top of Hound Tor where we were greeted with the sound of a mobile phone ringing which belonged to someone who had reached the peak just before we did). So it is pretty easy to use HSPA in an increasing number of out of the way places in the absolute middle of nowhere. (I regretted not having my notebook with me so I could have got Annette to take a picture of me using the internet on the top of the ragged rocks of Hound Tor with the emptiness to the horizon of anything but windswept moor land and put it on the Exetel Country Broadband web site to see if Telstra would complain it was an impossible place to use the internet!).
As far as I can see it is possible to use HSPA for my purposes - connecting to the Australian databases, sending and receiving emails, general browsing and watching streaming video pretty much anywhere there is a small town or a reasonable road that isn't in a heavily wooded valley - even in the middle of a moor on top of a pile of rocks with nothing in sight from horizon to horizon other than bracken and heather and the occasional sheep or cow or wild pony. I received some market information that 25% of the people in the UK who have a wire line broadband service now also have an HSPA service and that 2/3 of all mobile plans now sold in the UK have data capability. Altogether there are an estimated 18 million HSPA services being used in the UK today which bill over 5 pounds per month. One of the reasons I am disappointed about the opportunity for opening an HSPA operation in the UK is that it removes one major opportunity for buying HSPA modems at a reasonable price rather that the extraordinarily high price Optus charges us for them. The high cost of the modem in Australia is, in my opinion, holding back the sale of HSPA services. I haven't seen the latest ABS broad band survey figures but there seems little doubt that HSPA will have grown substantially overall, and in comparison to wire line broad band, over the past 6 and 12 months. Perhaps, however fast growth of HSPA in Australia turns out to be it would have been even faster if the impediments that exist in Australia had been eliminated. For instance the latest UK ad from '3' shows these details: http://threestore.three.co.uk/broadband/modem.aspx?tariffid=1260 that the sale price for a 3.6 mbps HSPA USB modem is now $A20.00 retail purchase compared with the around $A150.00 in Australia (sure you can get a 'free' modem on a 24 month or so contract but that is not a really good idea). Also you would notice that the cost of a 5gb plan is now $A30.00 from '3' compared to around $A40.00 in Australia with this low cost modem offer and there is NO contract period other than the initial month. Both hardware prices and per gb prices in the UK are far better than anyone currently offers in Australia and I can see why the take up is far more rapid than in Australia. Also the utilisation of the data capabilities on 'pure' mobile services is increasing rapidly and is predicted to account for a higher percentage of mobile telephone revenue than voice calls by mid 2010. Our progress in developing a sensible HSPA approach in Australia is still not developing as quickly as we need it to be and I was getting frustrated with our inabilities to make more rapid progress just before I left Australia. I am more relaxed after ten days of holiday in one of the most beautiful places I have ever seen but each time I look at the figures when I wake up in the morning I get annoyed that things aren't moving faster. We obviously need some better ideas and some lower cost hardware. We still have made no progress on finding a 'magic box' at a realistic price but have at least identified that such a box is now being commercially made but at far too high a price for it to be 'mass marketed' - it's still a 'specialist's' device. I will use my contacts to see if we can source 5 - 10,000 low cost Huawei sticks when I go to London which might help a bit but it isn't the real answer. So - we need a breakthrough - and we need it before the end of October so we can make the most of the Christmas 'present' season in some sort of meaningful way. I have no idea how to bring this about but as I get more and more 'relaxed' my creative abilities seem to be gradually replenishing themselves from their state of exhaustion and a few more idyllic days may restore enough energy to get to grips with the issue in a sensible way. There has to be a realistic way of promoting the use of an HSPA service to replace a dial up or satellite service that doesn't require chicanery - or so I would have thought. Thursday, September 10. 2009The Big Changes In IP Pricing......John Linton ........finally seem to be filtering through to end users other than Exetel's. At least that seems to be the case according to this announcement from AAPT: http://www.itwire.com/content/view/27581/53/ 12 hours unlimited use from 8 pm to 8 am is certainly a really useful innovation in the boring "meeee toooo" Australian ISP marketplace - something that Exetel has been trying to put in place over the past 5 plus years - but has failed to do. I also thought the 8 am to 8 pm period was a real first and it appears to me that AAPT are trying really hard to do something really different - and that may be the case - but as I couldn't find this new offer on their web site I'm not sure about some of the details and the 'base price' of $A89.95 (plus a $A30.00 telephone line rental? plus some bundled call costs?) does seem to be very, very high for a 'family' user. Also 5 gb of 'peak' usage allowance seems out of 'kilter' with a user paying so much for internet usage. Irrespective of how all of those details pan out it is very definitely an innovation in a marketplace not known for anything but slavish copying. Doubtless their parent company's ownership of 50% of Southern Cross has heavily influenced this 'brave' decision but, from what I read, it seems Telecom NZ is using heavy traffic management and a lot of proxying to make their unlimited offers in NZ (including 24 hour unlimited). It's unfortunate that I'm on holidays because Exetel have been looking at new plans that both restore the 12 hour free download period and move it to a different time frame - coincidentally the same as AAPT is now offering - 8 to 8. Our proposed version was 12 hours unlimited BUT no P2P/Rapidshare/Etc from 8 pm to 2 am with heavy P2P constraints in that period but no constraints on P2P in the 2 am to 8 am period.....or something like that. These sorts of considerations have become possible as the price of IP bandwidth continues to fall and the innovations in splitting bandwidth pricing continue to permeate the more conservative of carriers who offer IP services. AAPT seem to be stressing that this is a 'family' oriented plan structure and that makes a lot of sense, except for the price, as if it were to be used by the sort of users who seem to have taken up the earlier version of this type of AAPT plan then it might be some sort of problem, if not for AAPT with their 50% of SX bandwidth, then certainly for companies like Exetel. I would think that a 'family' plan would need to be around $A60.00 a month (plus some cost for a telephone line) with 'unlimited' downloads 24 x 7 - with P2P etc "banned" except for the period 2 am to 8 am each day. I am enthusiastic about providing such plans to 'real' users and see that it is one of the sensible approaches to getting rid of the false premises that have been in place since 2002 due to Telstra's methods of first offering 'broadband'. Since those early days every subsequent ISP who entered the market for providing ADSL services (even now many ISPs use their own back hauls and their own DSLAMs) still slavishly adhere to a charge for the basic service and a separate charge for data downloaded, and in the really sad ISP cases, data uploaded. The only barrier we have seen, and we have seen it consistently for getting on for 6 years, is the growing number of "15 year olds" who use their parent's ADSL to download ludicrous amounts of data. Doubtless these dummies represent less than 5% (probably far less than 5%) of all broad band users in Australia but they are the bane of the industry generally (not just Exetel) and play a large part in offers such as the new AAPT plan in fact having may usage constraints. So while my heart is much closer to thinking in terms of 'unlimited' internet my head remains focussed of the d***head factor that makes such offers very dangerous. I was heartened by AAPT's bravery though as they undoubtedly, via their parent and their previous iteration of 'unlimited plans' have become comfortable that they can control, perhaps even eliminate, the d***head factor in trying to provide a good internet product, simply and at a really good price (well, they haven't done the really good price bit yet but it's only a matter of time). I will be interested in finding ut all of the other details as they become available and also what companies such as TPG do in response over the rest of September and hope that by the time Exetel get around to releasing our version(s) of "unlimited" plans there is some space left for us to 'innovate'. Wednesday, September 9. 2009Easy Come - Easy Go.......John Linton
One of the reasons for coming to the UK later than in previous years (apart from trying to avoid the UK holiday traffic issues) was to see what, if anything, could be done about setting up an HSPA business in the UK in conjunction with an opportunity that had come the way of a couple of old acquaintances. I was scheduled to meet up with them next Monday but I received an email from them a little while ago apologising for the fact that things had taken a dramatic change and the opportunity almost certainly wasn't there any more and I could read about why in today's papers but they were attaching the official press release. Pity in many ways but that's the way business goes - a stream of opportunities that you need to take advantage of as they present themselves because timing is always of the essence and delaying decisions is always, as in this case fatal. On the up side it gives us two free days in London or wherever as there is no need to go to London now. On the other hand we will also now not have the opportunity of seeing live LTE in a real community operation as we will not have the contacts required to look at that - unless things change over the next 2 or 3 days. In a way I'm glad I don't have to make a decision on a UK operation at this particular point in time because for all of the up side I was not looking forward to aadding the work loads of a very small group of people who are already dealing with multitudinous issues that take all of their working days already. In particular - I am glad I won't have to involve myself in the complexities that would have been involved - so a good 'cowards way out' in one sense. While the Australian business is far more solid that it has ever been and shows every sign of remaining that way it would have been difficult to remove the amount of management time and decision making that would be involved in starting another major 'international' aspect of Exetel's business so soon after establishing the Sri Lankan company. There remains a lot of work to be done to finish both the set up of the SL business and then set it on its way for Phase II of that business opportunity. We also have the usual huge work load to push Exetel past its start up phase in to the different business it needs to become to survive the possible upheavals of the next 36 or so months. It can't help occurring to anyone who visits rural England (as I do whenever I get the opportunity) that some proportion of the people have lived in this civilised and, in many ways, highly developed, country for a couple of millenia pretty much doing things today the same way they did the same things 2,000 years ago. They live longer lives today and have the advantages of modern machinery and all that electricity, running water and telephone lines and air waves bring them but, fundamentally, they are sowing and reaping crops and carrying out animal husbandry (excluding modern veterinary science) in exactly the same ways as previous generations have done throughout the centuries. They are wealthy or poor depending on their and their predecessors capabilities and luck over the generations and, by virtue of their working lives, far healthier than their city counterparts and from casual tourist to local conversations in pubs and shops and queues generally (an inevitable part of UK life) more than happy with their lives and the lives their children have in front of them. It seems to be, if not idyllic, at least a much better way of spending a life time than the ways available from commercial careers that, in essence, only have something as pointless as 'money' as a 'reward' for a lifetime of effort. Or so it seems to me after a long day marvelling at the beauty, organisation and 'oldness' of ways of living that I can only half conceive as being possible. Then again - maybe it's the second Scotch in front of an early Autumn fire while I spend time tapping a keyboard instead of doing something more practical. Tuesday, September 8. 2009Two Way Communication With Customers.......John Linton .....a very old, and quite possibly old fashioned, part of being in business. I read this an hour or so ago: and thought it a bit strange - not that Telstra would close down an attempt at using the internet in one of the ways in which it is most powerful but what a total mess they made of the concept of using it in that way. The internet, which obviously Telstra uses as much as most communications companies to 'do business' is providing more new ways of dealing with customers and potential customers than the early Phoenicians could ever have dreamed of - or come to think of it - most hot shot "marketing gurus" as recently as ten years ago. Selling a product has, since the Phoenicians (or whoever you credit with being the first major understanders of commercial principles) always involved using customer feedback to drive every aspect of your 'manufacturing', distribution, buying experience and after sale support processes. I first learned "how to sell products via a web site", coincidentally in the UK, in the early 2000's and I began to learn about the value of 'bulletin boards' or 'fora' as early as the mid 1990s. Undoubtedly my knowledge of these incredibly powerful tools is quite rudimentary compared to some people I talk with on these subjects but it is more than enough to have ensured we built these processes into almost every aspect of the way that Exetel does business today. Today 95%+ of the 'sales' that Exetel makes are made via our web site with no previous contact between the customer and an Exetel employee. Similarly over 80% of all technical, administration or billing problems are resolved by web based automated processes. These are the immediately obvious benefits the internet has brought to commerce but, incredibly valuable as they are, all the value of these processes put together is a tiny fraction of the value that the attempted web function that Telstra has just closed brings to Exetel and all of the other commercial organisations that use their web sites to allow their customers to interact with the decison making processes and people within a commercial enterprise. Huge 'slices' of Exetel's current processes have been implemented based on direct customer suggestions including over 90% of our very comprehensive User Facilities, much of our FAQs, almost all of our web pages have been heavily influenced by customer suggestions and well over 50% of our billing and administrative processes have been developed based on customer suggestions. Almost all of our agent processes and facilities have been put in place based on ideas and suggestions (and in more than one instance) by actual code submitted by an agent or a customer. Both our Customer Forum and our Agent Forum were set up (the customer forum before we took our first order) to provide customers and Exetel personnel to exchange ideas and to eliminate problems and have been instrumental in generating a steady stream of ideas for improvements in every aspect of our business. Those fora also give Exetel's management and directors a place to discuss their own ideas for Exetel's future and to, very seriously, listen to counter opinions and views on aspects of our business we are thinking of changing. In many ways our 'latest' two way communication process, the 'suggestion box' (replacing 'suggestion threads' on the two forums) has been the most valuable 'channel' of all in producing over 1,000 implemented suggestions in less than 9 months of operation - a rate of change that we have never achieved before. It seems impossible to me that Telstra couldn't make such simple to understand concepts deliver the incredible diversity of ideas and true value that they have done for every company that has implemented them. My knowledge of this aspect of business is by no means comprehensive but I have never heard of any serious attempt at setting up a two way communication system with customers (and others) that has been closed down. Ive seen many evolve rapidly over time, including ours, but never seen such an endeavour actually shut down. I have never bothered to check on what other communications companies do in Australia - my contacts are all in the USA - so I don't know how much of the 'two way' net facilities are used by other ISPs and comms companies but I haven't heard of any of them shutting down such processes. Perhaps large companies have so many talented and innovative people they don't need to encourage their customers to provide them with feedback on their current and future services and processes? Monday, September 7. 2009The Internet Is Free To Access.......John Linton ........it just costs money for some commercial entity to put all of the infrastructure in place for you to receive the information you select. I haven't given much/any thought to the ramifications of buying bandwidth in different ways to those available in the past over the almost 7 days we have been away but this topic surfaced yesterday in an obscure column in one of the UK Sunday papers - I can't remember which one as I've grown unused to having several Sunday papers to browse through over breakfast on a Sunday.....I never read the Sydney Sundays papers. Anyway, the column was about the inequities of UK ISPs and their pricing of downloads and was railing against the fact that the internet should be free. I thought only the twelve year olds on the various on line fora made such childish statements but apparently the pseudo journalists in mainstream UK papers do too. The internet can never be 'free' as long as some sort of infrastructure is required to deliver it to any end user. In Australia this means that some sort of telephone line is required and some sort of switching centre is required as well as some sort of connection to the various sources of data that any customer will wish to access - OK - everyone knows this so why does anyone, including some sort of UK journalist rabbit on about access to the internet being provided 'free'? Because they had trouble writing their column this week and resorted to dashing off some splenetic piffle to assuage the editor's wrath is the only reason I can think of. Over the last month or so there have been some quite dramatic changes downwards in the pricing of 'international' IP bandwidth where the pricing is now approaching the cost per mbps of the customer connection bandwidth. This in turn means that the cost to an ISP of delivering 1 gbps of data to the end user has fallen to something below 60 cents in peak time and something under 30 cents in off peak time (the description of off peak varies very widely from carrier to carrier.Ignoring the P2P addicts who believe an internet connection is only useful if it allows them to download infinitely large amounts of data each month, and for whom no ISP will ever be able to provide a service at a price they deem reasonable, it appears to me that the time is coming where an ADSL2 service can, and should, be offered on the basis of a single connection charge of, say, $25.00 per month with a few mbps of download included and the a pay for use of something like $1.00 per peak gb downloaded and 50 cents per off peak gb downloaded.
It will be an interesting concept to turn new ways of buying into workable and attractive new ways of selling.
Sunday, September 6. 2009Email - Can't Live Without It........John Linton .......but it would be good if you could. We have now been in the UK for five days and I feel very relaxed and actually, for the first time I can remember for a very long time, have actually slept through the past two nights which has become a rare occurrence. It is obviously good to get away from the daily demands of being a part of running Exetel and do useful things like spending a few hours at an Owl sanctuary talking to the falconer in the depths of rural Cornwall and just leisurely moving from place to place as the mood takes you without doing any sort of planning. This blissful feeling lasts most of the day with the only exception being when you finally plug your notebook in over the first Scotch of the day, usually in some beautiful hotel lounge overlooking something that is usually appealing and more often than not - quite beautiful. A nice person brings you a crystal glass with a generous measure of your selection of the day and a small jug of water and all is right with the world.... ...until you look at your email..... ...and then you are jerked back to the reality of being part of a business where an infinitely tiny minority of your residential customer base can make 200 years of distilling experience produce something that tastes like battery acid. I don't ever want to change the fact that any Exetel customer can contact Exetel's directors if they genuinely believe that the rest of the Exetel personnel have failed to resolve some problem or other they are experiencing with their service. However I am sorely tempted to revise that attitude based on two emails I received today. When I was part of creating Exetel and a part of setting the objectives for the new company I never expected to to have to deal with people who were so, hard to find the right word so I'll settle on, just plain horrible to have to deal with and for whom I, personally, felt so unwilling to lift a finger for. However, I'll just add that to being one more thing I completely mis-guessed along with the other zillion disappointments I've encountered along the way. Over the past 5 plus years I've responded to, literally, thousands of emails from customers on every topic anyone could ever think of that even vaguely relates to a business association between two parties. Overwhelmingly I've seen this task as both the duty of a small business manager and in most cases as a highly beneficial interlocution. But not today. One email was from the functionally illiterate product of the Australian High School drop out system who not only can't spell or construct a meaningful sentence but uses some sort of horrible word (often misspelled) every five or six words or so.This particular person was upset that his service was being terminated because he had racked up 17 copyright infringement notices in 4 weeks as part of his service usage and, with the best will in the world, it was impossible to believe that all of those allegations were errors. He had also abused two different Exetel personnel in the same language he addressed to me which is a major 'no no' in any conduct of any support operation. I deleted his email. Unfortunately a similarly inappropriate to anyone's state of well being missive appeared five emails later. This one was from someone who took more than 9 paragraphs to describe just how grotesquely awful every aspect of Exetel was and then another five paragraphs of advice on how Exetel should re-organise itself to meet the basic needs of undemanding customers such as the writer. His service had also been terminated because of his abuse of Exetel personnel. I also deleted that email without replying.
I have come to the conclusion that, in both those cases, it was the easy availability of email that allows people to write so inappropriately where on a 'face to face' basis they would NEVER dare use the approaches and languages such communications often take. I'm less of a 'fan' of email right now than I was before today. Saturday, September 5. 2009HSPA Performance And 'Ordinary' PeopleJohn Linton We are currently as far West and South as you can get in the UK without standing on the cliffs at Lands End - a tiny fishing port called Mousehole (pronounced Mouzawl) and we are staying at an old hotel at the base of the cliffs. Annette's prepaid Vodafone mobile sim is happily working but at low strength and I'm typing this blog having previously dealt with my email and caught up on sales of our various services as well as watching a few minutes of the baseball highlights from the USA. All with no problems and, as far as I can see, no service idiosyncrasies. Over the past three days, since my last update, I have used this Vodafone HSPA service in some of the remoter parts of Devon and Cornwall and apart from one overnight stay in almost the centre of Dartmoor I have had few difficulties in business internet use - all but on that one occasion getting a usable signal. I've used the service on the remote North Coast of Cornwall, and now in the far South Coast as well as across Dartmoor and half a dozen places in between. Always usable for web browsing and email and a variety of VPN applications as well as (today) TV streaming from the USA. The speed tests I've done have twice peaked at around 6 mbps and the lowest I have obtained so far is just under 1 mbps. I won't be able to test speeds above that until we return to London at the end of next week. At the three hotels we have stayed at since the first night the HSPA speed is as fast or faster than the shared wifi connection provided by the hotel. So that's it for the first four days of traveling the remoter areas of two of the less industrially developed English counties. It's a great asset for anyone traveling in the UK and I suspect anywhere else in the EU. As a comparison I also tested the T-Mobile service I bought last year which has an older and slower version of the HuaWei USB modem and found that it was significantly slower (to be expected as it's rating was 3.6 mbps vs 14.4 mbps) than the Vodafone service but also had far less coverage in the sparsely populated areas we traversed. These random tests don't mean much of course as few people would want to use internet in the places I tried to use it and as a percentage of the total UK market it would hardly register but they are indicative of trends. If I had to buy a 'permanent' service though, there is little doubt it would be Vodafone. Earlier today we visited the Eden Project on our way from North to South Cornwall: http://www.edenproject.com/our-work/plants/index.php and were impressed with much of what we saw - perhaps the hugeness of the scope of the work most of all. It was a touch too 'Glastonbury' for me but I really was impressed with the engineering and the progress that has been made in bringing about some semblance of the original 'vision'. Most of all I was impressed with the founder's ability to get money from both the UK government and UK major industry, though I find it hard to see the association of Rio Tinto (surely one of the planets major destroyers of ecologies and a landscape raper and looter and 'uglifier' of monumental proportions?) as a major donor to such a project.I wonder how much money Rio Tinto donates to ecological projects in Australia? Perhaps what I liked most of all was the 'motto' at the entrance gate of the project: "Ordinary People Trying To Make A Difference" Ithink that, somehow, really 'resonated' with me because I believe in it absolutely and am continually mildly disappointed that more of us 'ordinary' people don't seem to think that we can make a difference, albeit small, but a difference none the less and almost always a positive difference. The people who Exetel support in Australia are very dedicated and very passionate and I have little doubt that there are many more like them - but, I don't think there are anything like as many as there are in this country....hopefully I am just displaying my ignorance in reaching that conclusion. Overall, spending a few hours visiting the Eden Project drove home to me that it was 'just' another example of how much more, and from my experiences and observations, how infinitely better, the national and local governments, commercial enterprises and the people up and down the country join together to protect and regenerate every aspect of their environment and ecologies and how committed so many 'ordinary' people are and how so passionate they are about 'doing their bit' in the multiplicity of ways that are available to them I wish governments, commercial enterprises and 'ordinary' people in Australia could begin to develop the sort of awareness and co-operation about ecological issues that you see everywhere in this country.
Friday, September 4. 2009Have Some Commercial Companies Become More Responsible?.....John Linton ...or is it just marketing money being invested to promote the company as 'this month's new idea' way? I was sent an email yesterday from our Optus account manager titled "a new corporate initiative" with this link: http://optuswildlife.sites.optin.com.au/index.php It's always good to see more money going to the endless work required to protect and regenerate Australia's ever dwindling fauna and flora species and I imagine that a huge company like Optus would make a sizable commitment based on the mini web site they have created. Personally, I have always detested Optus' use of pictures of endangered species and cartoon animals which both debase and demean particular animals and animals generally and trivialise their essential natures by the anthropomorphism of their characteristics. Doubtless some d***head in some agency or other thought it was a 'fun' way of communicating with the airheads who are their target residential customers. Somehow I doubt that there has been some sort of epiphany within Optus senior management that has brought a new level of understanding that commercial companies that provide the means of destroying the habitat of the non-human inhabitants of Australia should pay people who actually care and are competent to make some realistic attempts to repair some of the damage they cause by making money out of the human destruction they assist - if only at one or two levels removed. Whatever the reason the money that big corporations donate does make some very real differences on many occasions. So Optus is to be applauded for making the effort of having a small sub web site that, hopefully, is visited by a percentage of their main site visitors and in turn will make more Australians aware of the perilous situation of Australia's most endangered species and perhaps even encourage them to do something about it themselves - even if it is only to make a small financial contribution. If every other major commercial enterprise in Australia did the same the current problems would disappear within a decade. I understand that my views are far from 'mainstream' in believing that human folly, stupidity and greed make the damage being done by "global warming" an irrelevancy in comparison to all other aspects of human raping and looting of the planet for pointless purposes. The Australian Federal and State governments do practically nothing and what they actually do is often counter-productive in that they seldom (never?) fund the projects they do start to a realistic completion. The current 'Federal minister for the destruction of the Australian environment' (the totally clueless and hypocritical Peter Garret, another show - another sell out, as one commentator so accurately described his environmental decisions since reaching his ultimate level of incompetence) is symptomatic of how awful Australian government association with the environmental issues of today has become. There is no hope of any Australian, State or Territory government doing anything worth a damn so if Australia's ecology and its denizens are to be saved the money is going to have to come from corporate profits. After Krazy Kevin's mindless tens of billions of dollars give aways (to save all working families from the horrors of the non-existent "GFC") you can be sure that cuts in federal funding will start with irrelevancies relating to conservation ("no voters there Whine"). Mind you - "it's full speed ahead and damn the torpedoes" when it comes to laughably stupid military spending where the budget to waste money just 'grows and grows'. Can someone tell me why Australia needs submarines at all? Apparently not even the personnel in the Australian Navy want to sail in them and even if they did - what on Earth would be the purpose. I suppose a more realistic question would be what on Earth is the purpose of the Australian armed forces at all? My view is that Australian governments since Federation have become so removed from reality (and let's face it they have all been, almost without exception talentless and often stupid people whose only reason for entering politics was to make themselves wealthier than they could do by holding a real job) that almost no action contemplated by any one of them is actually designed to help the people of Australia - it's designed to keep their personal noses in the trough of graft and corruption for as long as possible. All Australia's health, education and transport problems together with the alleviation of congenital poverty could be solved by reducing the military to a coast guard and a CMF within ten years and diverting the Defence budget to real problems in Australian's daily lives. All problems solved - The government gets another 20 billion or so a year to spend giving Australia's human inhabitants more hospitals, universities and roads without raising any taxes and stops encouraging young men to go and get themselves killed while trying to kill citizens of other countries and Australia's business organisations pay dedicated people to roll back the effects of human ravaging of Australia's non human inhabitants. ...or is it too much to expect 'Australia's decision makers to accept its the 21st Century in the Southern Hemisphere - not the late 19th century in Europe?
Wednesday, September 2. 2009What Mostly Happens To Start Up Companies........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 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?
Wednesday, September 2. 2009First Test - UK HSPA....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. Tuesday, September 1. 2009What Do You Do In Uncertain Times....John Linton .....like these - when the clearly financially untenable 'NBN2' continues to make wheels spin in so many aspects of the communications I read with amusement during the flight from Sydney to Singapore that the rumours were starting to rapidly grow about how much of 'NBN2 Co' Telstra would want to buy. I'm amused because the obvious answer is - "all of it".....should it ever become a reality. Telstra would, under current unthought out wing and a prayer statements from Krudd "only" be allowed to buy 49% of it. Big deal. The more things change the more things stay the same. What's the difference between the current Telstra monopoly owning 100% of the infrastructure in place now and Telstra the new monopoly owning 49% of the new infrastructure? (assuming that other bunnies can be found to invest in a company owned 49% by Telstra). How much less control over pricing does Telstra have as a 49% shareholder than as a 100% shareholder? In commercial terms - very, very little = none. Telstra doesn't care how high the price is for other wholesaler customers for NBN access because as the major shareholder 49% of the profits on the sale of access go to Telstra therefore the price Telstra Retail buys at is irrelevant as it's automatically discounted by any profit the wholesale company makes - unless I'm mistaken that is exactly the position with PSTN today - Telstra retail pricing is cushioned by Telstra Wholesale's profits. Well done Krudd - you con the public (electorate) with your chest thumping "I'm the hero who broke the Telstra monopoly" but then hand the whole shebang over to Telstra after the tax payers have funded the full infrastructure development. Only someone who is totally Krazy or totally stupid could try and make this piece of nonsense sound like a good deal to anyone but their shaving mirror. I look forward to reading how the Labor spin spivs attempt to make this sound like a good idea if the NBN actually proceeds. Assuming that there ever is an 'NBN2' in the distant future Telstra will have achieved all of Trujillo's wildest expectations: the Labor government will fund a new fibre network and will then give it to Telstra who will run it in the "best commercial interests of the shareholders" and will control the price of access to every other Australian communications company while ensuring that in the mean time it exacts an increased 'rent' for its copper infrastructure. What a bunch of inept, unknowledgeable clowns Krudd and co make the late and unlamented Rex Connor look like Adam Smith. The net result that we are seeing of the 'NBN2' (save Krudd's bacon) fiasco is, not unnaturally, a 'slow down' (the gentlest word I can use and an understatement) in the roll out of new exchanges and the upgrading of current exchanges that have no more capacity for ADSL2 by our two suppliers. This was not unexpected so it hasn't concerned us too much as it forces us to put our efforts in to other areas of the business that don't have the restraints the 'NBN2' is imposing. I have mentioned we planned to more rapidly grow our corporate business (which is not, at least currently, suffering from Krazy Kevin interference). One of the most valuable 'assets' any company can develop is a first class sales force which we started to do in February of this year. It will be interesting to see how effectively this can be done and how quickly it can achieve the first goal of bringing in as much revenue as the residential services do now and will do in the future. One of the purposes of being in the UK is to conclude an agreement which involves Our other pre-occupation So, (I wrote this on the flight and am sending it from the lounge at Changi so have had no time to check the draft) |
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