John Linton
...of micro managing a business second by second but I have very real concerns about the immediate future.
We had our monthly board meeting yesterday which lasted, as usual, around five or six hours and comprises a review of each aspect of our business with the responsible manager followed by an overall review of our strategies and changes of direction (if there are any). We have been holding monthly board meetings since we began operating as a data service provider and have been holding them in the current format for getting on for two years now. In many ways yesterdays board meeting was a very invigorating affair with most aspects of the business at record levels and a great deal of progress in the operational methodologies we employ together with three exciting new developments.
One pleasantly surprising thing (for a company that pays little attention to profit other than to try and ensure we continually make one) was the record profit for the quarter which was higher for the three month period than we had made in the previous six months which, at the time, we were very pleased with. I was surprised because we have gone through some pretty expensive changes to the ways we do a number of things and some of the things we had aimed to do had not worked out as well as we had hoped for.....including the disappointing results in HSPA and the significant decline in new ADSL2 applications - (almost totally offset by the strange increase in ADSL1 applications). Nevertheless revenues and profits for the quarter were at new record highs which is always a good thing when you run a tiny company in viciously competitive market places and allegedly difficult financial times.
So why am I feeling less than confident? I can't explain it in credible detail with sufficient analysis to make any sort of sense out of it but some of the more 'real facts' are:
1) I have said for a while that the latest round of annual reports by communications companies (from Telstra down to the dregs) seemed to clearly show that their progress had slowed significantly in the six month period from 1/1/09 to 30/6/09.
2) The ABS survey confirmed this very obvious trend and, if it is to be believed, actually showed a decline in the growth of ADSL for the first time since the technology was introduced.
3) The level of applications we are getting for ADSL2 services that are subsequently rejected due to 'lack of ports' (at least lack of ports for Exetel) continues to increase.
4) There is a noticeable increase in companies advertising 'unbelievable deals' in most media I am aware of.
5) The dial up campaigns by Telstra seem to have resumed with their half price/free/no payments offers that while never turning out to be as true as 'first hearing' would suggest are phrased in ways that seem to be true to the gullible.
6) AAPT's unlimited offer seems to have triggered the copyists with companies like Dodo making such offers now
7) Almost every ISP increasing its downloads if not decreasing prices on almost all of their plans
All of these 'facts' are indications of the results of a continuing slow down in new and churn uptake by companies offering ADSL services across the board and as so many companies have made very public forecasts of how much their growth is going to be over the coming months there are going to be, in my opinion, some great difficulties in those companies going anywhere close to the results they are predicting. I could of course be quite wrong and our first quarter's results are certainly pointing in the reverse direction overall - except for ADSL2 take up....and in our particular case our HSPA results are nowhere near what we had planned due to circumstances that only relate to my own stupidity and some actions by our supplier that were very unexpected.
I'm not sure what to do about the ADSL services - probably for the first time in six years - but will continue to look at what the future options are and maybe bring forward the anticipated benefits of those future scenarios in to closer term plans and pricing.
In terms of HSPA services the situation is even more difficult. Two of the key aspects of what I thought would be the case now have failed to materialise and while neither were 'essential' they would have made a huge difference to us about now. Instead of two major 'pluses' we have an additional two significant 'minuses' which while you can always count on unexpected set backs in business having four 'reverses' in a matter of 6 or so weeks is a little dis-spiriting.
Perhaps its time for a radical set of changes to many aspects of our business to deal with the new realities with which it looks like we are being confronted? Nothing seems very clear to me right now which is something I haven't experienced at any time of Exetel's existence.
I guess dealing with unexpected negatives is what I get paid for so I better get on with it.