John Linton
........or that's the way it seems to me......time to retire?
So, TPG completes the purchase of Pipe for a more than reasonable price and the next thing after that announcement from my RSS is this:
http://blog.pacificfibre.net/
Earlier in the day I had read this:
http://www.computerworld.com.au/article/339372/internode_ramps_up_capacity_southern_cross_us_link/?fp=16&fpid=1
which is an indication that you should always consider everything a lot longer than you ever have time to do.
It's far too early to make any sort of predictions on what current Pipe customers will stay beyond their current contract end date but, I suppose, that Internode's announcement is pretty clear evidence that SCCC bandwidth is, currently, more cost effective than Pipe's "foundation customer" pricing that Internode pays for Pipe bandwidth - discounting what seemed to be a negative assessment about Pipe's 'quality':
"The Southern Cross Cable proposition, with the lowest latency to the
US and fully protected circuit capacity, is the highest quality
Internet path to the US – hands down."
While the new NZ consortium's statement is simply that, a press release of intent, it seems no more unlikely than Pipe's original 'press announcement' that they were going to build an international IP link and it may happen and it may even happen within the estimated time frame....only time will tell....but it's an indication that whenever you make a decision in this industry it is always wise to commit yourself to as short a term as possible.
We are reaching the end of the tender process for IP and have received one proposal that, subject to completing the tender process at the end of next week, we would be happy to implement. We have still to receive responses from one of our major suppliers and one of the 'keenest' of the 'new' suppliers in the market so we will not be making any premature decisions but while I am sure that Internode may well get better STM16 pricing from SCCC than we would, the current on offer pricing is the best we have seen and, despite the up front investment cost, is still likely to be the best for our current needs - though the 3 year time frame we were basing the math on maybe nearing the 'adventurous' end of the risk analysis spectrum - based on what we are beginning to become aware of.
The major issue, for us, remains what will happen in the Australian ADSL market and how quickly we can continue to build our business user base against our highly ambitious target of developing business revenue to a level that exceeds current residential internet revenue by July 2011. We completed our first 12 months of this process at the end of February and we are almost on target so far - in this easiest stage of this ambitious project. I say easiest because obviously the monthly sales targets were quite low as we built the operation from ground zero (in terms of developing a brand new set of selling concepts with a brand new set of people) and also developing a support capability well ahead of the time it would be needed (a much longer process though I was amused to see that Exetel was ranked very highly for its support services in two recent surveys).
Perhaps TPG's purchase of Pipe will work out just the way the financing case documentation would have predicted - David Teoh rarely makes a bad buying decision though this one is very different from the pattern his previous purchases 'established' going back to the early 1990s and up to the time of purchasing Soul....very much a purchaser of distressed assets unless my memory is less reliable than usual. Maybe the buying out of Pipe will simply benefit NextGen as they are a logical alternate supplier to buying from a company that simply wants to use your money against you and, from initial looking, NextGen is providing the same services as Pipe at much lower pricing.
So...you can never take anything for granted in the Australian communications industry....or if you do, you tend to pay a very heavy price for your insouciance.
PS: Some 11 days ago I 'predicted' that EFtel's shares would be less than 1.5 of a cent before the end of March - yesterday they fell to 1.6 cents - a 20% drop in 11 days. The directors can publicly talk up the company as much as they like but the shareholders don't seem to be listening - you have to wonder who buys such shares and what their expectations are?
http://www.asx.com.au/asx/markets/equityPrices.do?by=asxCodes&asxCodes=eft