John Linton
We failed to make much progress in developing viable wireless broadband offerings in 2009 despite putting a lot of effort and, for us, a lot of money into various attempts. We have been told by various sources that our failures were unique and that other suppliers had succeeded in rapidly growing wireless broadband sales across the whole spectrum of Australian marketplaces which made me feel even more unhappy about our own failures. The major reasons for our failures were all my fault in both planning and execution and I have no excuses for making the mistakes I did as I should have known better. But, life and markets move on and as more lower end residential ADSL users begin to realise that giving up their land line isn't the end of civilisation as we know it the market for wireless services continues to expand. We had our best ever wireless order day yesterday (just on double the previous best day) and I would like to think that is an 'omen' for things to come.
We have begun the serious re-vamping of our wireless plans and will make a much more serious attempt to get them exactly right for the three different marketplaces we will now pursue and pursue much more vigorously, and much more aggressively than we did in 2009. I would expect the LTE trials by both Optus and Telstra to continue to 'educate' the Australian market on the advantages of wireless broadband if only because there will be some 'oohing and ahhing' as those companies publish the results of those trials - in particular the fact that LTE, in a surprising number of places, will deliver much faster speeds than ADSL2+. Of course that interest needs to be sustained by realistic delivery dates and, as importantly, realistic prices per gb used. I have zero ability to forecast what price and what availability LTE will result in other than expecting that Telstra will attempt to continue to set prices at the sky high level (why would they change the habit of a corporate life time?) and Optus will pursue their established policies of using some form of 'Telstra minus' model - so the end result for LTE itself may not be that exciting for the majority of users....but the wider and wider publicity should push up the sales levels of wireless broadband generally.
Three key changes should also help wireless broadband sales.
Firstly the cost of the standalone wireless modem will continue to fall as a piece of hardware as more and more laptops/notebooks and more and more routers include the chipset making the necessity of a separate 'modem' redundant. This will 'advantage' Exetel as we have never been able to afford to provide a "free modem" as the carriers and their major retailers do - nice to have the market move in your favour for a change. This will make a major difference in itself.
The second reason is that with close to or (depending on the next ABS figures) over 3,000,000 wireless modems already sold the need for a substantial number of people buying wireless modems from Exetel continues to fall each month as new customers for Exetel wireless already have compatible modems from previous purchases or just buy them on eBay. So the ability of the big suppliers to 'bundle' a free wireless modem (and lock the user in to a long contract) will continue to decline as a 'plus' for those suppliers doing it.
The third thing, clearly demonstrated in the AT&T figures I cited the other day and partially confirmed by Telstra's revised downwards revenue forecasts for this financial year, is the accelerating move away from wire line usage. The additional 'saving' of the $A30.00 per month cost of a wire line rental (ignoring the high call charges) makes wireless broadband, by definition, $A30.00 a month more appealing IF the customer believes they can effectively use VoIP over their wireless broadband connection. You can be sure that, at least for the time being, Telstra and Optus will not provide a VoIP solution but, of course, there are many providers of VoIP so that won't deter Telstra and Optus wireless broadband buyers from using it. It therefore removes another current advantage of the carriers - their ability to use their own low cost mobile and PSTN call minute costs as a 'bundled' advantage over companies such as Exetel.
Perhaps I'm kidding myself but I see these three 'trends' all moving in Exetel's favour and that is an encouragement over the situation in 2009. We do have to find ways of making the wireless plans much more appealing to the marketplaces we are going to 'pursue' and that is really very difficult for us at the moment but as it is essential we will just have to find a way...because I really do think this is going to be the year of breaking the wire line monopoly on delivering data for around 50% of the total broadband marketplace.