John Linton's Personal Musings

John Linton

.....because of its outright dishonesty and it being based on conning the stupid out of as much money as possible.

It isn't a coincidence that both Telstra and Optus make more money out of mobile services than all other services put together. How does anyone think that happens? There is only one way that I know which is to charge an outrageously high mark up on the cost of delivery and rely on the cartel pricing to avoid competition. Fair enough - if the 'markets' are stupid enough not to notice then why give the suckers an even break? Mobile telephony requires a lot of investment so it's only reasonable to get a realistic return on those investments - hard to argue with. After twenty years of flim flammery and out right dishonesty there seems to be no 'marketing' differential between the three mobile providers and they continue to make profits from mobile services that would be the envy of the US or EU carriers in their magnitude and ease of obtainment.

I don't think I'm a particularly highly principled person nor do I have no commercial common sense but I have, as both a buyer and a seller of mobile services, always despised the sheer dishonesty of the pricing of mobile services. Therefore I have always been very, very bad at being a part of the process that requires making intrinsically dishonest offers to marketplace long used to accepting lies as truth and complex misdirection as 'standard' and all that can be expected. So it is always with great trepidation that I begin the process of looking at Exetel's mobile pricing which has always been very easy to understand (by a prospective buyer) and always painfully honest. Of course our mobile buy pricing 'power' is very poor as we don't sell anything like the mobile minute volumes that interest mobile carriers and even our requirement to make very small profits does not overcome that massive disadvantage.

Our only way to market mobile telephone calls successfully is to use MoIP which allows the user, via downloading a painless mini app, to use a data enabled phone to make voice calls at rates that are lower than any other mobile provider offers - at least currently, and to use SMoIP to be able to offer 5 cent SMS. So I started looking at the 'market' to determine where the lowest costs of mobile calls are at the moment. The consensus from our agents and our forum feedback is that the TPG/Optus offer of 10 cents flag fall plus 10 cents a minute for GSM calls with 10 cent SMS was easily the best on the market. There are many other 'capped' plans from different carriers and carrier re-sellers that deliver the same end result so I took these parameters as a price schedule to 'beat'.

I understand that the acceptance of MoIP is less than the acceptance of VoIP but as Exetel are unlikely to be able to buy at volumes that will allow us to effectively compete on GSM pricing we will have to base future mobile plans largely on MoIP....and at such incredibly good rates that all but the very 'timid' mobile telephone user will overcome their fears about VoIP/MoIP. Easy enough to say but not so easy to do even though we had the 'foresight' to develop our own SMS platforms and volume buys starting some three years ago in the expectation this day would come.

So my first iteration on MoIP pricing for data capable phones (without running the profit numbers or having any clue as to how to market such a service as a 'mainstream' product) would be:

1) Zero Monthly Fee

2) National Wire line - 5 cent flag fall and then 5 cents per minute

3) National calls to mobiles - 5 cent flag fall and then 10 cents per minute

4) National SMS - 5 cents per 160 characters

5) Data - 200 mb included then 2.25 cents per megabyte

As far as I can see that is pretty much the pricing that would be needed together with the Symbion, Android, iPhone etc mini apps that make using MoIP and SMoIP a 'piece of cake'.

As always, I could be quite wrong, and if any knowledgeable reader can point out the errors in my thinking I would appreciate it.

Copyright © Exetel Pty Ltd 2010


ABN 350 979 865 46

John Linton

....in the 'flat/declining' ADSL marketplaces.

http://www.smh.com.au/business/optus-move-leaves-telstra-markets-dearest-provider-20100428-tske.html

I've commented on it before but, as anyone would know, when a market place flattens the only growth of any individual supplier's business in those marketplaces can only come from other suppliers. If that isn't obvious then the plethora of new ADSL plans now being offered by almost all ADSL suppliers would be an indication that such an eternal verite is taking place right now.....across the spectra of marketplaces and suppliers. Exetel is no exception and we see the increasing loss of current customers to Telstra (via their "special welcome back" offers from their outsourced call centres calling all "ex-Telstra" ADSL users) and to the saturation advertising by TPG and AAPT with their unlimited offers - I notice AAPT is now fighting with TPG for advertising space on Sydney buses).

We do an analysis of our ADSL users each month (as we do for all of our services) and we pay particular attention to both 'churn aways' and 'churn tos' in looking at what effect various marketplaces changes are having. In general terms this hasn't changed much over the past two years with the largest 'destination' being TPG or Telstra and the largest source being Telstra and TPG - work that out if you can. However there is more volatility than there ever has been in the past (in both directions) so it is increasingly hard to 'read'.

One thing that is still very pleasing is the percentage of customers who stay with Exetel longer. We still have three of the first five customers who signed up with us and over 3,000 customers have been with us for more than five years now with another 15,000 being with us for more than four years. We have been working on ways of increasing the 'satisfaction' of the customer experience for our longer term customers and need to make more effort in this direction. Our first major foray has been to offer unlimited plans to longer term customers at the lowest price on the market and this has been taken up by a significant number of our higher downloading customers - which was good to see. This was only possible because of the new, much lower, IP costs we are now beginning to see the benefits from and we will need to take a new approach to buying IP in the future to sustain this program.

We are about to offer wireless broadband as a 'no charge' back up service to our current customers with a zero cost per month if the customer signs up for a new 12 month contract and heavily discounted modem pricing for those customers who decide to do that. This should also appeal to customers who may want to use the internet while travelling which will be some proportion (perhaps over 70%) when you consider the number of customers who own laptops/notebooks as well as a desktop. In any event we believe that a significant number of our customers will be interested in a zero cost per month/pfwyu wireless broadband service with the condition that they must have a concurrent ADSL service with us.

We have had a 'Pioneer Discount' scheme in place for almost five years now which rewards the remainder of the first 1,000 people who signed up with us (around 500) with discounts off their current ADSL monthly charges of up to $15.00 a month depending on what plan they were originally on. We are considering extending this scheme, at a different level of discount, for people who have remained with us for five years and perhaps then extending an offer to people who have been with us for four years. However we have yet to work out the actualities of doing that.

These times, tough as they are now, are undoubtedly going to get tougher as the ADSL provider companies that have 'publicly committed' to growth numbers in ADSL find it harder and harder not just to meet their predicted growth but to maintain their current customer numbers.

Good for current ADSL customers though.

PS: I loved the Tacitus quote:

http://www.smh.com.au/opinion/politics/greatest-moral-challenge-turns-out-to-be-rudds-dearest-folly-20100428-tscw.html

Copyright © Exetel Pty Ltd 2010


ABN 350 979 865 46

John Linton

......where is Android going.......... and is Exetel being inexorably drawn in to an ever greater reliance on in house software development?

Exetel has been working on developing MoIP apps for use on its mobile data offerings for almost two years with many frustrations and recently some increasing success. We have 'narrowed' our focus to the Symbion platform to be able to offer a solid 'product' and have pretty much got a good set of apps based on that platform. We will also offer an iPhone version when/if we can untangle the issues with Optus legal obligations to Apple which has not been possible so far although we have the software and firmware to provide these services on iPhones we haven't been able to convince Optus to let us do it.

We looked at Android version of of our MoIP, SMoIP and FoIP applications but all the technical advice has been about the variety of Android 'versions' and the support issues that entails. The problem is summed up in this article:

http://gigaom.com/2010/04/27/googles-android-fragmentation-problem-persists-admob/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+OmMalik+%28GigaOM%29

Our MoiP app has been popular with our more mature (maturer?) residential customers who helped us debug and add features to it and we will continue to do that. As we slowly build our corporate wireless business we are using 'uncopyable differentiators' to allow us to compete with the "free hardware" approaches of the carriers and the service ineptitude of the 'shops'. We also have two other unique advantages (the back end 'control room' and the ability to spread usage over multiple users) but the real advantage we are seeking is providing mobile voice and SMS services over IP which allows us to provide unmatchable per call pricing to business users.

We really need to offer the services over all major handset types but our difficulties with Optus 'legals' on the iPhone (which I personally don't believe but I'm too polite to say that) and the problems with multiple Android 'versions' as spelled out in the article are major barriers.We need to resolve this issue in the shorter rather than the longer term. As a poster on a previous blog noted there are an increasing number of "gadgets" becoming available based on the Android versions and these new devices find a ready market in IT sections of large companies and this represents an opportunity for a company like Exetel.

MoIP and SMoIP are not offered by any of the carriers (for all the obvious reasons) and therefore also not offered by any of the carrier's shops or distributors.Depending on any future change of view by the carriers, it is unlikely that they will ever offer MoIP or SMoIP to corporate customers - though never say never in the technology business is even more applicable than in the spy business Mr Bond. At the moment the usual reticence is evident about using MoIP by corporates even though the rebuttal that if it is ever a problem simply switch to GSM is blindingly obvious. I am of the opinion that over the balance of this year the ability to reduce a company's mobile telephone bill by a minimum of 50% will become more compelling. Perhaps I'm being too optimistic.

One of the advantages, to us, of developing Android versions of the MoIP and SMoIP applications is that the large carriers simply won't do that - either because they are 'tied' to their contracts for handsets to Nokia and/or Apple or simply because the 'support' issues are almost insoluble for their methods of distribution. We will make up our mind on how to address the Android problems once we get 'finality' on how to provide our services on Apple hand sets.

The issue that is really concerning me is how much additional resource our in house software development is requiring and as we take the first look at an FY2011 business plan how greatly the future budgets for R and D and in house systems development have grown over the years. This is partly inevitable because of our decision in November 2003 to 'write' all of our own software required to run the company across ten different products/services but over the past two years or so the amount of programming we are doing that is unrelated to our core systems or even our own operations continues to grow steeply.

It signals a change in direction for Exetel which is neither unwelcome nor a surprise but when it is reflected in future figures it becomes clear that Exetel has diverged from the path it was on over the first five years of its existence.

If my maternal grandmother was correct - a change is as good as a rest.

I would really like a rest.

Copyright © Exetel Pty Ltd 2010


ABN 350 979 865 46

John Linton

......when Easter falls in April meaning that, with Anzac Day, there are three public holidays plus the 'drag along' extra leave days plus it's a thirty day month.....so we have been fortunate to sign our largest, yet, corporate data network and all but our ADSL sales have held up remarkably well. Our largest business sale contained the first 100 mbps link we have ever sold and, as so often happens in businesses like ours, a day later we sold two more to a company that had been a long term 'prospect'. We also recorded the first time we made ten sales in one day - so in many respects April may well turn out to be an 'ordinary' month rather than a sub-ordinary month like December and January.

We have been 'waiting' for our new, young sales force to sell the first 100 mbps links before proceeding to a new phase, for Exetel, of addressing much larger businesses than they have done so far. Not that there is anything particularly special about 100 mbps links (Exetel doesn't have any in its own business with the standard base level being 1 gbps with the first 10 gbps now on order) but symbolism in creating a new sales force is more important than many people think it is. We realise that very large corporations and government departments would be reluctant to give a company of Exetel's size a big 'chunk' of its data networks but we see a fairly reasonable chance of bidding for a part of their business that is not 'crucial'.

A business acquaintance of mine within one of Australia's largest accounting practices gave me some insight in to how badly ripped off such organisations are when it comes to their total naivete when buying data services. We were discussing other aspects of Exetel's business when I suggested to him that he could well consider Exetel for a standalone IP feed as a back up to his current major carrier supplied network. He said he would find out what opportunities there may be and, true to his word, he called me over the weekend saying there were no opportunities as they had recently re-signed a new three year contract and in any case their current supplier had massively reduced their IP price from almost $A400.00 per mbps to $A220.00 per mbps and they were supplying the back up link at a mere $A135.00 per mbps providing it was only used for emergency back up.....a great deal indeed.....for the provider. I ruined his 'triumph' by saying that Exetel would have charged him around $A90.00 per mbps for the main link and around 50% less for a back up service.

I don't know how many, idle, IP back up links' there are in corporate and government organisations around Sydney alone but I would guess at around 400 with another 1,000 or so in the other States and probably at least 100 in Canberra. If all those organisations are being ripped off like my acquaintance is there would be a fairly large market to address....which Pipe has been doing for some time and doubtless TPG will continue to do now it owns Pipe.....though Pipe's pricing as it stands currently, at least from what we have seen, isn't very effective/competitive in terms of what should be able to be offered in today's marketplaces. We have mulled over some IP pricing for the new financial year - both as back up circuits and as primary circuits and think we can construct an effective 'campaign' to Australia's "Top 1,000" companies plus the six State Governments and the Federal Government. I would like to sell at least one 1 gbps IP circuit over the remaining two months to confirm such a plan would be possible - however that would just be the icing on the cake.

We already have several very large organisations using Exetel for primary data links and an increasing number of those have added links as they became more 'comfortable' with Exetel as a supplier and some of those customers have been with us for many years and our network has become far bigger and far more redundant since those earlier days. So we will give it some more thought between now and June 30th and make a better assessment of how much of that 'market place' we could sensibly address and acquire in FY2011 but even 2 or 3% of that opportunity is more than we are achieving at the moment - in revenue dollar terms.

The other major advantage of such a program is that the more IP we buy for corporate customers the lower the cost becomes for residential customers.

Everyone knows that......

Copyright © Exetel Pty Ltd 2010

ABN 350 979 865 46

John Linton

......to an increasing number of people.

Some years ago there was a TV report on a worldwide 'shoot out' held on the PRC which was attended by 'clans' or four players from many countries around the world - I think the game itself was Half Life. During the report various players were interviewed about why they had spent so much money attending the event and how much time they spent 'perfecting their skills'. The answers were surprising and shocked my wife who not being even slightly interested in such activities had no idea of how much time teenagers (and other age groups) spent playing on line games. I commented at the time (and subsequently) that such fantasy 'worlds' had already become an 'addictive drug' for a significant number of people, predominantly young males and the spread of that addiction would only become worse as the games became ever more sophisticated.

However I was surprised to read this article in this mornings SMH:

http://www.smh.com.au/technology/technology-news/two-million-internet-addicts-20100423-tgky.html 

which gives some sort of indication of just how far the danger of this addiction has progressed since that TV program first drew the attention of the dangers of 'fantasy internet' to whoever watched that show. Over the past few years there would be little doubt that WoW and similar games have attracted a vast number of users who prefer the fantasy 'worlds' they create to the real worlds the players of these games actually inhabit. There is also little doubt (irrespective of what the cited article indicates) that fantasy games are as dangerous to undeveloped minds as Class A drugs of addiction are.

While the Labor Party are continuing to fiddle around with 'filtering' (which as everyone who has ever commented has pointed out how unworkable such a thing is) it is not an issue for anyone. However internet addiction is a MAJOR and growing issue and is already destroying more lives than it should and is quite capable of becoming the greatest substance abuse problem yet known - worse than nicotine or alcohol and certainly far worse than heroin or cocaine or crystal meth.

Fantasy games are far more dangerous than any drug because they have a universal appeal that other self abuse substances don't - they appeal to the very core of humanity - the desire to be a hero and to be 'useful' - which is why fantasy stories (from fairies, elves and goblins through to Robin Hood and Superman have had such appeal from the beginning of human history. In the previous ages of literacy (ie. BC = before computers) fantasy was confined in the damage it could do because it required reading a 300 page book. As universal literacy decreased comic books substituted for the detailed written word but what that gained in visual impact it also decreased the power of fantasy by also visually depicting the muscle bound bodies of 'male super heroes and turned off females by depicting 'perfect female bodies' in skimpy clothing. Fantasy movies completed the dis-orientation by using actual 'perfect bodies' to represent the super heroes and it wasn't until 'avatar' based computer representations appeared that the individual's imagination was called upon once more as in the days when teens and sub-teens had to read books.

But while books, comics and movies only allowed the young minds they attracted to enjoy a 'hands off' experience and then only for a strictly limited time computer fantasy games allowed an almost hands on experience and for a much longer time and eventually the time became infinite with the global massive mrpgs now available which, effectively, allow the 'player' to spend their whole life (providing mum keeps delivering the food) living in their fantasy world.

The number of school age Australians becoming dangerously addicted to this 'half life' (pun intended and I always wondered at the irony of the developers of that game choosing that title) is obviously unknown to me but like all addictive drugs its influence will spread. Rather than making unfulfillable claims about filtering the internet the powers that be should look at a social danger that is capable of destroying the current and every succeeding Australian generation.

If the current government wants to improve the lives of all Australians and double the future 'output' of the work force they could do something that not only is possible but can be accomplished really easily - they could ban (via internet controls) all mmprpgs (starting with WoW and whatever else is popular) and allow working family mums and dads to regain some control of getting their children an education.

Australia would become an instantly better and less dangerous place.

They could then get on with an emissions control process that Australians understand and support.

Copyright © Exetel Pty Ltd 2010

ABN 350 979 865 46

John Linton

........Federal profligacy and Telstra's survival make for some interesting times.....potentially far better for Exetel than for any end user or for any other ISP.

We have had some preliminary contacts with both Telstra and NBN(Tas)Co over the past few weeks and will probably sign contracts with both those organisations over the coming days to participate in their limited upcoming fibre trials at Point Cook in Victoria (Telstra) and the three small towns in Tasmania (NBNCo). Because of the various 'non disclosure agreements' I cant make reference to the sort of information that an end customer would really want to know but that will become clear before the end of May. Some months ago we also signed contracts with Opticomm who provide access to the residential developments they have 'pre-fibred' in several States but we have not released prices for those services either as we wanted to wait and see if we could provide a single price for fibre services if the pricing 'strategies' of these three different organisations allowed us to do that.

Our current view, bearing in mind that we have yet to test any of the three organisations B2B ordering and provisioning systems, is that offering fibre services will not pose any delivery or support problems that weren't encountered in the early days of ADSL and, of course, there is no way we can determine how MTTR will compare. Pricing - I can't really make any comments except to say that, from what we have seen to date, we would believe we can offer equivalent pricing to our current ADSL2 services with the advantages of much higher speeds for those users who have a need for them. We have yet to have any meaningful discussions with Optus who also seem to be expanding their HFC and other fibre networks but such discussions (as with Telstra) would depend on a change in Optus policy that currently doesn't allow for wholesaling of those services.

It's a somewhat 'weird' situation. If there was a true commercial choice (which there very definitely isn't today) my current views are that I would prefer to deal with Telstra on providing fibre solutions simply because we know their B2B and resolution systems (and know they work) and know that their networks are highly reliable. They are also much more advanced in providing fibre solutions and have had fibre 'in the ground' for over three to ten years (depending on how you count) in the major capital cities (and from recent public statements also in Tasmania). Pricing, as always, will be a major issue but, for the first time, Telstra may find itself competing with a government who is becoming well known for its 'open cheque book' approach to funding and its 'we'll leave dealing  with paying the money back to some future coalition government'. While this is not good for Australia's future tax payers it may provide for some very real competition.....at least until the borrowings run out.

None of these new 'networks' have any bearing on the overall broadband customer today or even in July when the first 'wholesale' NBNCo and Telstra fibre services may be actually installed. It will certainly be good news for the few thousand customers who will be the early recipients of these services but it will have no real impact. However, assuming these early installations are successful (and there's no reason to believe that won't be the case) at least Opticomm and NBNCo will continue to make fibre to the home services available to more and more locations around Australia.

Personally, it seems that while this may be media hyped as a great breakthrough it is far more important to a company like Exetel than it is, at least at this stage, to any end customer or to any other ISP.I'm sure you can work out why that would be but, briefly:

1) All of our competitors have based their current services on copper DSLAM roll outs of varying magnitudes

2) We never saw services based on the PSTN as having any long term future

3) We believed that wireless would be a superior/more cost effective solution for 'low download' users

4) We believed fibre in the major conurbations would replace the PSTN based networks

5) We thought that one or two major fibre network deployers (we assumed Telstra and Optus at the time) would base their services on part retail/part wholesale

6) We figured that smaller ISPs who had chosen their own PSTN deployment would be 'caught in a no-man's land in the initial stages of any real fibre roll out.

.....and several other reasons that are pretty obvious.

It will be interesting to see just what transpires over the coming twelve months but whatever happens it seems more than a possibility that the residential 'communications landscape' will look quite different to the way it looks today.

Copyright © Exetel Pty Ltd 2010

ABN 350 979 865 46

John Linton

........what has writing a daily blog achieved?

1,008 days ago I sat in a London restaurant with an old colleague from my time at IBM and shared our experiences over the many, many years since we had last met. Over the previous 12 months we had exchanged a few emails about organising a get together with some of the more memorable people we had shared those formative 10 years or so of our respective business lives with but, apart from those few words, had not communicated with each other for the better part of 30 years. We had a memorable meal (not hard to do in London) and trawled over our various experiences since we last met. He had been far more successful than I had having joined the then virtually unknown Sony Corporation from IBM and stayed there for the remainder of his working life until our meeting having continued to become more and more successful in that now gigantic company over the years.

One of the things that came up in conversation was the use of 'blogging' by businesses. I had vaguely heard the word but was unfamiliar with what it actually was or what relevance it had to business of any size. He related his personal experiences and those of the very senior executives in his and other large organisations and I became intrigued by the concept. A day or so after the lunch he sent me two longish articles from two American university magazines outlining detailed studies in to the use of blogging in business. I called him to thank him for the information and said I was so impressed that I was thinking of writing a blog when I got back to Australia. He cautioned me with the results of various 'senior' executives he knew who had the same enthusiasm but barely wrote half a dozen entries before giving it up. I didn't lose my enthusiasm and, probably spurred by my innate competitiveness, said I would do it daily for a year and we agreed a bet of a bottle of wine of my choice to a bottle of Scotch of his choice if I could actually do that. (we also agreed on a price limit).

Having won that bet well over 18 months ago I have continued to write a daily blog because all of the benefits to Exetel that the magazine articles said would accrue have done exactly that in exactly the ways the authors of those articles said they would. The discipline to write 600 plus words on average each morning (or other time if you are travelling in countries with different time zones) has never been an issue (though Annette may well disagree) and as I have never aspired to write anything other than what I am thinking about at the time the lack of 'subject matter' has also seldom been an issue. Over the past two and a half or so years I have learned to write towards specific 'agendas' which was heavily recommended by both articles and something I may have intuitively done anyway.

I have been very grateful for the very large number of people who have written very positively to me since July 2007 and I found those comments very encouraging. I always wondered why there was a much larger number of 'people' who wrote to me so negatively, some in unbelievably abusive terms. Why, if they disliked what I wrote, did they bother to read it in the first place - let alone reading it day after day? I put it down to the rapidly failing mental health of so many people who live in this country who, for one reason or another, are allowed to live too much of their lives without adequate supervision or sedation.

Why did I, contrary to all advice, now decide to ask non-Exetel users to make a donation to Exetel's wild life projects as a condition of reading whatever may, or may not, be written in the future? The simple answer is because our wildlife needs as much money as concerned people can find to have any chance of arresting its catastrophic decline and I figured that some of the people who read this blog because they get some benefit from the information I share wouldn't mind paying a small amount for continuing to receive that benefit. I also figured that it would significantly reduce/eliminate the lunatics who write me their crazed missives.

For those Exetel customers who contribute the majority of readers as far as I can tell, I will continue to try and write about the changes, vicissitudes and other issues that confront people foolish enough to want to make a small, but positive, difference to the Australian communications industry and how they deal with the constant failures in which such attempts almost always result.

Copyright © Exetel Pty Ltd 2010

ABN 350 979 865 46

John Linton

.......that wireless growth will hit at some time in Australia's future?

I read this:

hwittp://online.wsj.com/article/SB10001424052748703876404575199744095734072.html?mod=WSJ_Tech_LEFTTopNews

with some interest this morning in the WSJ and was interested in some of the comments about the movement between the expected "giveaway the handset in exchange for a 24 month contract" that is the backbone of Australia's mobile telephone market. In the much tougher residential marketplace conditions being experienced in the USA perhaps the 'need' to have the latest gadgets only available by throwing away your perfectly good two year old mobile phone have finally become financially apparent. Then again maybe not. Whatever the real reason(s) turn out to be a 67% drop in new contract customer sales certainly indicates something massive is changing....at least for Verizon.

The US marketplaces have been offered really affordable data mobile capabilities for a very long time (over two years) while Australia (for all of the usual claimed reasons) still has no broadly affordable wireless data offerings from any of the three carriers with the possible exception of Vodafone/3. The US now has relatively inexpensive 'unlimited data' wireless services from multiple carriers and I suspect that Verizon' is perceived as lagging in such offerings there but it's hard to keep track of what offerings are actually being made from this distance.

I have no idea of the network capacities of the big US carriers but they were obviously big enough to cater for the huge growth in number of users on much more generous data plan costs than are currently available in Australia - and even more generous than the current offerings in the EU. Whether the moves to unlimited voice and unlimited data are causing pricing headaches for Verizon remains to be seen over the coming months. I will be interested to test out the capabilities of wireless networks in the UK in a couple of months and also check how/if prices have changed since I was there last. I occasionally do some on line checking to get a 'feel' for what is happening there but I would like to check first hand.

Growth of wireless usage in Australia continues to expand rapidly (as the last ABS figures demonstrated) and the ongoing investments in data capacity seems to be continuing in Australia. I have never encountered any problems with my personal wireless usage which is, I would have thought, fairly typical of a business user in total and possibly above average in terms of  the hours a day/days per month of use. It will be interesting to see what the new rumblings about Telstra raising the cost of wire line prices by $A5.00 a month - will that be the 'last straw' that 'opens the flood gates' (to mangle two metaphors) and results in the mass abandonment of telephone wire lines at a much faster rate? If that happens you would expect to see a significant jump in wireless broadband usage I would have thought.

If you don't have a telephone line for ADSL there seems little point these days to pay an increased cost when you have a mobile telephone. If you can get a decent wireless broadband signal and don't need more than 3 - 4 gbytes of downloads you can now get a wireless plan at less cost than the possible rental of a wire line and get lower cost calls and not pay for ADSL. That scenario is truly compelling financially which is why I commented that the mooted PSTN line rental increase may be the 'last straw'.

If such an increase does come about and if the carriers, for a change, do continue to upgrade their wireless networks ahead of the increasing demand then the wire line may well 'die out' much sooner than expected. If that does happen - what a different  communications land scape we would then see.

10, 9, 8, 7, 6, 5, 4, 3, 2, 1.

PS: The count down? Nothing spectacular. From tomorrow onwards if you are not an Exetel customer you will need to make a donation to Exetel's endangered wild life projects. Not worth it? Fine. Stop wasting your time reading my worthless ramblings. I have written 1,000 daily entries without missing a day over the past almost three years and if reading those random thoughts isn't of any value then - do yourself a favour..........

The past 1,000 entries have been written based on various agenda and have been, as "promised", overwhelmingly successful in meeting those agenda. I now have new agenda which, I believe, will best be served by making this minor change.

John Linton

......been talked about for ten years......beginning to happen?

It seems like this year is speeding by even faster than ever with the end of financial year looming and the planning for the coming new financial year about to start. This year which we began so pessimistically due to the litany of doom sayings seemed to be holding up amazingly well for the first 7 months but the last three months have been as hard as any I have personally experienced. Maybe I am just too old for this job and it has always been this hard but from what I see around the communications industry it appears that it really is as hard for some other data service providers as I currently find it....at least in terms of ADSL1 and ADSL2.

The end of Netspace was one of the more concrete examples of the business generally becoming more difficult and more uncertain but there are many others. The takeover of Hutchisons by VodaFone was another example. The new rumour of Telecom NZ selling off AAPT in the not too distant future is of some concern to us (and I'm sure of much greater concern to AAPT's employees and their larger customers). AAPT has been the 'nicest' wholesale supplier we deal with for a long time. We have no billing disputes, we get superb support in terms of selling aids and 'accommodations and we have really good relationships with our account manager, her manager and senior management as well as good relationships between our provisioning and problem resolution people and their AAPT counterparts. It would be very disappointing for us if AAPT were to be sold to TPG (I wonder what TPG would do about their stake in iinet?) and only marginally better if were to be sold to two of the other companies mentioned - probably only a sale to Optus would be beneficial to Exetel (though it's hard to see how the ACCC would permit that).

But, if the AAPT sale does happen, it would mean that three of the 'top ten' communications providers in Australia would have been sold off during a twelve month period and that, very definitely, constitutes 'industry consolidation'. It is no longer a bunch of tiny ISPs running out of their start up money and supplier credit but the number three and five carriers merging with the number two and number four carriers - that's an almost unheard of scenario....plus a highly profitable (at least according to published data) ISP calling it quits and selling out to the number seven communications provider.

Times very definitely are obviously tough across almost all sections of the communications suppliers and sectors and I can't remember a time remotely like this when the 5th largest carrier (Hutchisons) merged with the 4th largest carrier (Vodafone) and the 3rd largest carrier (AAPT) looks like it will be sold off to the 2nd largest carrier (Optus) with a long term communications company (Netspace) being swallowed up by 7th largest communications provider (iiNet). Certainly a sign of currently troubled times and more of an indication that the future doesn't look any better - even discounting the impact of Federal Government meddling in the communications industry. The only real question is how tough will it be in the different sectors of the communications market?

Either by good luck or good planning Exetel has virtually no exposure to the steepening decline of wire line telephony use across Australia. We have never wholesaled 'stand alone' wire line services and have only a few wire line connections on the bundled ADSL2 services we buy from Optus. So we don't have to concern ourselves with how to deal with a progressively increasing 'revenue loss' from those services - we have none. Companies that do have significant wire line revenues (Telstra being magnitudes larger than any other company) will have some significant problems to deal with and 'shrinkages' to both their revenue and profits on a continuing basis. One immediate benefit is that we won't have to deal with the ramifications of this sort of thing:

http://www.theaustralian.com.au/business/industry-sectors/telstra-aims-to-hike-rivals-access-costs/story-e6frg9hx-1225856608774

Similarly we have virtually no exposure to the price wars that continue to rage in the mobile telephony market places. Our mobile business is very small and comprises a very 'loyal' user base that slowly grows each month who prefer low cost mobile calls on zero contract plans to the "free" offerings of the major mobile sellers. Our MoIP offerings are also beginning to have an effect on some market sectors.

Our revenues, and small profits, for Wireless broadband, VoIP, SMS, MoIP, FoIP, SHDSL, EOC, Fibre all continue to grow month on month.

Our only concern is ADSL1 and ADSL2 where the overall market is beginning to decline and growth has slowed dramatically over the past three months with increasing pressures on pricing which, obviously, puts profits under a lot of pressure. We have re-worked our current ADSL2 plans to make them more attractive (while not losing us money) and will look at how we could do the same for our ADSL1 plans over which we have little 'room to move'.

Overall we will have a more difficult 'planning period' this year than any other year I can remember.

10, 9, 8, 7, 6, 5, 4, 3, 2..................

John Linton

.....it depends entirely on how determined you are to achieve it, how much of your time you are prepared to invest and how good your legal advice and advocacy competence are........and whether you can afford to pursue it......and this is only when you are 100% right.

Some time ago, and unknown to us, Telstra Retail (a company we have never had any dealings with and certainly have no contract with which would require us to pay them for anything as we purchased no services from them) listed three small payment defaults on Veda Advantage which is the corporate version of the individual Credit Reference Association which is the 'public record' that is referenced by companies when they assess the credit worthiness of other companies. We were unaware of this until one of our banks advised us of the fact during a routine check they did when we applied for a corporate credit card for our F and A personnel. This was some many months after the entries were created.

When we found out about this 'mistake' we contacted Telstra who effectively advised us to "get lost". When we eventually found someone within Telstra who appreciated the gravity of the situation the entries were removed but our request for a public 'apology' was met with silence (our requests were not replied to). So we presented the facts of the matter to our solicitors who in turn got advice from an appropriate barrister. Our solicitors wrote to Telstra's solicitors and received a 'not going to happen in our life time' reply/more than one reply. So our solicitors issued a letter of demand and when no response was received began court proceedings. At this point Telstra's appointed solicitors began a derisory attempt to address the issue but began with the premise that nothing wrong had been done and a public apology was out of the question and why don't we just go away and stop bothering them.

As the initial hearing date got closer they began to attempt to take the issue more seriously but it wasn't until the hearing date that they made any genuine attempt to do as had been requested. Even then they couched their approach along the lines of "your client will want to avoid the costs that our disputing this matter will cost you so why don't you just go away". Finally they agreed to post the mealy mouthed apology published in the Australian yesterday but only on the basis that "each party paid its own costs". They also stated that if we didn't agree to this they would counter-sue Exetel etc, etc. They were told that they had clearly damaged Exetel, they had damaged Exetel with absolutely no reason or excuse and that they had incurred costs for Exetel in trying to redress the blatantly obviously illegal actions of Telstra.

The judge agreed and ordered Telstra to pay Exetel's costs.

So there you have it. A giant corporation does something they know is totally illegal and then use as much money as it takes to try and prevent suffering the consequences of that action. Not a scruple, moral or ethic associated with the initial action that I can see and that attitude was continued from then onwards. Any person can form their own opinion of what the 'culture' inside such a company must be and what sort of people are employed in 'decision making' positions for this situation to have existed and then not be redressed. Is Telstra any different in this aspect of doing business than any other large corporation? I don't know. What I do know is that Telstra has always acted in this way when we have had a legitimate dispute with that company.

We have another issue, involving 'incorrect' billing that we will be pursuing over the next week or so and doubtless Telstra will display the same attitude and tactics as they have done in the issue just concluded. We are also pursuing a similar issue against the TIO, an organisation that displays identical attitudes and tactics as Telstra does - perhaps that results from the TIO being controlled by Telstra?

No sensible company and no sensible individual within any company wishes to spend the time it consumes to become involved in 'legal issues'. However it is an inevitability that these issues will occur from time to time. The 'golden rules' of becoming involved in 'legal issues' are set out in the opening sentence of this blog entry.

10, 9, 8, 7, 6, 5, 4, 3.....

John Linton

.....continues to reach a wider demographic's needs.

Before Exetel first started providing wireless broadband solutions using the Optus mobile network we asked for some 'volunteers' to do 'real life testing' of the performance they could achieve in various parts of Australia. These kind people (who 'volunteered' via the Exetel forum) did an excellent job of providing feed back to us and to other people who followed that forum thread as to what they were achieving under various conditions and from various locations - some quite remote others around regional towns and a couple in the suburbs of Adelaide and Brisbane. 

Over the past two plus years we have kept in touch with them to track their ongoing experiences as the network grew in capacity and capability and as more and more users connected to it. I sent out my quarterly email to the remaining 12 of the original 15 users last week and have now got all of the replies. In summary the results continue to be very positive in every respect with users getting slightly faster speeds than three months ago and have had another three months of operation without any 'down time' or any other network performance issues. Over the two and a half years of usage the average sustained down time speeds have increased from an average of 650 kbps to an average 0f 2.8 mbps together with slightly better latencies - most of this improvement has come in the last twelve months when average speeds have almost doubled from a year ago.

The other significant piece of information from the last quarter's 'survey' was that the remaining three people have canceled their land line since January 2010 with all now using VoIP to make telephone calls. I understand this minute number of users, who are also atypical because they were all 'technically competent' and are now long term users of wireless technology, but it is 'directional' in that the average usage by this small group is less than 3 gb per month (a number that would cover more than 30% of Exetel's current users) and includes three 'rural' families and four 'work from home' duos. By 'abandoning' their telephone line all of these users now spend around 40% less than they used to spend on their previous ADSL1 service (ignoring the lower cost of telephone calls) and have a consistently faster connection.

Current wireless pricing (at least that from Optus to Exetel - it could be quite different in other scenarios) doesn't allow us to offer wireless services at less than around $A15.00 per gb (up and down) so wireless services are not even on the horizon for heavy down loaders or low latency dependent game players but for a very sizeable 'chunk' of today's broadband users it is better than they get in many areas in Australia and it is continuing to get better. I don't know what the LTE testing later this year by both Telstra and Optus will show, let alone when those carriers will make LTE available on their mobile networks, but it seems likely that both speed and latency over wireless will surpass today's ADSL2 performances around Australia sooner rather than later.

Pricing will remain an issue in Australia though that doesn't seem to be the case in the US or in the EU as far as I can tell from the available information. However for users who don't need large downloads wireless looks like it will become the dominant broadband technology sooner rather than later has been 'predicted'. People like me continue to use a wireless service (mine is around 2.5 mbps in my home and somewhat faster when travelling) and my bill seldom exceeds $A15.00 per month for a constantly used service. I would think that there are many other people like me that now only use wireless because it is as fast as they need it to be and it's a fraction of the cost of ADSL.

So 'straws in the wind'....but the approaching 'winter' continues to darken ADSL's skies.

PS: For those people who told me how stupid Exetel was to take Telstra to court to force them to publicly apologise for their unconscionable behaviour - look at page 16 of today's Australian....mealy mouthed for sure - but then ..............

PPS: In closing the case earlier this morning the judge ruled that Testra was to pay Exetel's costs.

10, 9, 8, 7, 6, 5, 4......

John Linton

......and no clear bases on which to make them.

Last week seemed to me to be a much tougher than average week in terms of really difficult decisions that needed to be made and looking at what is coming up this week it seems to me that the decisions that need to be made are less clear cut and more difficult than last week. While I realise that the responsibility for making decisions in commercial life is very clearly that of the people who seek, or end up in, 'positions of authority' within commercial enterprises it doesn't change the fact that more and more decisions that need to be made, even in a company of Exetel's size have become more difficult under the current Labor government which has intruded so deeply in to the communications industry.

One of the decisions that we foresaw from the moment the 'NBN1' was announced, and then when it was demonstrated to be the total sham it actually was, the 'NBN2' replaced it, was a period where the real future direction of providing residential data services would become very unclear. It was also obvious that government interference would reach its most damaging stage at around the same time that the ADSL broadband market would become saturated producing the 'double whammy' effect beloved of a certain level of financial forecasters. That time is around about now. There is little doubt that the ADSL broadband market has become saturated and there is only a little doubt that the Labor government's intrusion into the communications industry has reached its 'turning point'....has it done enough to get re-elected and continue with the venture or will it be seen by an electorate, together with many other things, as one more uncosted blue sky promise that will bankrupt the country and destroy its future?

Either scenario is irrelevant because the degree of uncertainty is all that matters and that very clearly is what is causing many of the current 'events' now being seen.

All that does matter is what to do about providing residential data services between now and the next Federal election and then, after that election, if in fact Labor is re-elected, quickly working out what will be the likely time frame of a deliverable 'NBN' infrastructure and how much of Australia it will cover within the various time frames. In the mean time today is very difficult to deal with for residential data services using non wireless solutions and we need to make some really hard decisions on how we deal with the coming 3 - 6 months. As with last week's decisions, I haven't got any bases for making them as even the immediate future is unclear to me which makes it very difficult to make up your mind on what you should do in terms of the current ADSL residential services and especially what should be done with wireless services in the next few weeks.

http://www.smh.com.au/business/customer-decline-hurts-telstra-20100418-sml3.html

One of the unknowns is illustrated in the above article. What is Telstra going to do with its residential ADSL and other service offerings to arrest its declining market share and what, if anything are they going to do with their wholesale pricing as they decide on agreeing to split off their wholesale operations?

We have two major contracts to sign or not sign based on how we see the month by month situation 'panning out' and a third contract that could become very important depending on the result of the next Federal election. I haven't got any idea as I type this what I will recommend to these decision making processes as to how we continue offering ADSL2, how we continue offering wireless broadband and whether we begin the process of finding a fibre residential service with enough coverage and suitable pricing to make it viable - for Exetel to offer. Business services are unaffected by the current government intrusion and the saturation of the ADSL marketplaces because business services do not use ADSL and will not use an asymmetric fibre service in their core applications.

Basically all these decisions revolve around what services Exetel could offer to residential users in late 2010/2011, if any, and what infrastructure(s) should they be offered on. ADSL is not looking like it will be a service that Exetel will be offering in mid 2011 but there are so many unknowns between now and then that I can't say that with any degree of conviction. I wonder whether any other data communications companies are as unclear as I am on what will happen in the residential market places?

What will the ABS report published in late August 2011 show in terms of ADSL, wireless, 'NBN2' and Telstra/Optus Fibre user break down? I wonder if any ISP/RSP has got those numbers even close to being correct yet?

10, 9, 8, 7, 6, 5,

John Linton

.....because modern education, parenting and societal (if that is the correct word in this particular instance) influences create the scenario of the lawlessness in which the planet is being engulfed.

It doesn't matter whether its corrupt politicians, corrupt police, corrupt businessmen/women, bikie gangs manufacturing drugs, suicide bombers, drunken driving or 10 year olds downloading copyright material from their parents computer we live in a milieu where most people are criminals and are vociferous in expounding their 'rights' to carry out their illegal activities for no other reason than they can get away with doing so.

This article:

http://online.wsj.com/article/SB10001424052702304604204575181820755061494.html?mod=WSJ_Tech_LEFTTopNews

pretty much sums up where on line piracy sadly 'stands' in the litany of lawlessness across the planet. I have no business view on how to deal with on line theft - Exetel will do whatever any State or Federal legislation requires it to do from time to time and will otherwise act in its own commercial best interests. Personally I think, because I was brought up in a more ethical society than exists today in Australia which still had caring parents and ethical schools and teachers, breaking any society's laws is wrong if you live in that society and that people who do so are menaces to the societies in which they live.

I was saddened by this article because it defines the real problems of living in today's world - the law makers are not the problem (personally corrupt as they may well be in their other activities). It is the actual societies they attempt to legislate for that are the problem. It appears from what was written that even though the 'government of the land' pass legislation there remains a society that is not intending to comply with it irrespective of the clearly delineated moral and ethical basis for delineating the legal situation.I suppose it will eventually work itself out over the next year or so but it may well be the case that Western methods of government have passed their use by date with law making becoming an esoteric process carried out in irrelevant assemblies that are basically unknown, and irrelevant, to the populations that they are responsible for governing.

Is there any moral/ethical difference between a 15 year old suicide bomber and a 15 year old illegal down loader? They both have been 'conditioned' by their parents, schooling and the societies in which they live to believe that the actions they are about to take are what they should do. Neither considers that, on the one hand the lives of people they have never met and they are about to end are of any importance and on the other hand that the lives of people they have never met who will no longer be employed manufacturing and distributing the material they casually steal are of any importance. You think that's an inappropriate comparison? Well....can you see any point between the two that are not directly apposite. Neither the 15 year old suicide bomber nor the 15 year old illegal down loader would do what they do if they had better parents, better schooling and lived in a less lawless society.

As the moral/ethical base of any society is developed over multiple generations there will be no change to the current situation in France and England based on some new law - you can't engineer societal change through legislation. Undoubtedly another family today will be devastated by the loss of a family member killed on an Australian road by some drunken slob who decided laws on alcohol consumption don't apply to them - because they can drink to excess and then get in their car/truck and drive somewhere. Doubtless some bunch of hoons in some location in every major city in Australian will be cooking up their latest batch of crystal meth or unpacking their latest shipment of heroin/whatever to ensure more young people destroy their lives before they are 30 - because they can get away with it despite all the laws and police anti drug "task forces".

We live in a lawless society that, because of the overwhelming number of examples from all sorts of people over the full spectra of today's societies, will continue to become more lawless and more anti-social. Any society can only change when the majority of any society act to bring about change, not via law making, but by personal example. Today in Australia when you watch some news media lamenting the latest tragic event caused by drugs, alcohol, or just crass selfishness remember that your personal actions in ignoring the rights of your fellow planet inhabitants mean that, possibly, one day some deluded young suicide bomber will choose to end his/her addle brained life within lethal distance of you.

Hopefully, as your lights go out for the last time, you will reconsider whether all that illegal material you downloaded and encouraged other people to download was worth it.

10, 9, 8, 7, 6........

John Linton

.......not a pretty sight from what can be discerned through the fogs of obfuscation and the clouds of trepidation that fill the Australian telecommunications 'space' these days. I think the future became even more obscure yesterday when I read this set of comments:

http://www.theaustralian.com.au/politics/no-return-on-nbn-for-up-to-30-years/story-e6frgczf-1225854288787

a few hours before we attended a meeting to determine how/if we would use the new fibre solutions that Telstra and the Federal Government will 'shortly' make available in some, initially very few in the case of the Federal government, locations in Tasmania. Telstra will, at least initially, make many more locations available than the 4,000 'residences' planned for the pre-Federal election 'launch' of fibre services in Tasmania which may have done a little bit of good by almost saving the State Labor Government in that State last month - though the negative swing augurs badly for such a hope for the Federal Labor Government.

When Exetel established a PoP in Hobart it was always on the basis that it would allow us to connect to an 'NBN2' if that ever became a reality and thus allow us to offer higher speed broadband services at some future time because it seemed highly unlikely that Optus would provide land line services in that State and their likelihood of providing affordable wireless broadband looked equally dim. Once the Federal Government preempted any attempt at rational/commercial costing of delivering an 'NBN2' by committing to a blatant vote catching strategy of '"wiring the whole of Tasmania" in a bid to protect the five Federal seats in Tasmania it appeared to be a reasonable chance that they would have to deliver some sort of credible coverage before the next Federal election and, assuming that Labor got a second term that coverage might even turn out to be a reasonable chunk of the Hobart, Launceston and Devonport markets.

It hasn't really turned out that way, reality has set in in terms of the time frames and difficulties of building and activating new infrastructures, but it appears, from recent press statements, that activation of fibre services will become a reality as of July 1st 2010 thus allowing Labor to go to the election that will happen shortly after that date claiming to have delivered on its promises of 'high speed data services'. Assuming Labor gets re-elected then perhaps over the coming three years 4,000 residences will become 40,0000 or whatever. If this does happen then, for the first time since 2004, it will be possible for companies like Exetel to compete with all other communications providers (including Telstra) on the proverbial 'equal footing'......at least in some areas of Tasmania.

Unless Telstra has 'done a deal' with the Federal government before the end of June it will be interesting to see what transpires in terms of competitive pricing between Telstra's fibre data offerings and the pricing that will be offered by those companies that have signed up with the Tasmanian 'NBN2' Co at that time of which it seems there are currently three - iPrimus, InterNode and iiNet. Harking back to the cited article it will all come down to pricing for the fibre offerings of either organisation to be a success. Those public statements that it may be a very long time, measured in decades rather than years, for the 'NBN2' Co to make a commercial return (meaning realistic profit) is some sort of portent of how much tax payer subsidy might be needed over the coming "20 to 30 years" to bring that about which in turn would raise issues as to how Telstra would react to such a scenario.

The only estimates of end user fibre pricing in Tasmania were published in the Hobart Mercury on March 16th 2010 by iiNet - and they were woefully unexciting to be as kind as possible - they can be found in the HM archives or on the Exetel Forums here:

http://forum.exetel.com.au/viewtopic.php?f=288&t=35575

Of course they are merely a publicity seeking exercise and are unlikely to turn out to be anywhere close to what will actually be offered - but - as the only 'published' pricing they are totally unattractive - even including some sort of telephone voice capability.

I would have thought that making any decision on plan pricing before Telstra comes up with their own 'NBN2' beater pricing is significantly premature although it would be a pretty safe bet that Telstra, even for a 'start up' service, will not make the pricing or the content particularly attractive.....but then Telstra have never found themselves in this sort of position before. Of course, while these gyrations are very important to Tasmanians, the real question is what 'NBN2' Co, Telstra and the ACCC come up with in any large scale pricing decisions over the coming 15 or so months. Based on the comments in the cited article that has just become far more interesting than it was.

10, 9, 8, 7.........

John Linton

As one of the founders of an Australian company that, after six years, still has seven out of the first ten employees it hired I read this with some surprise earlier today:

http://blogs.wsj.com/digits/2010/04/15/can-infosys-keep-workers-with-hefty-raises/?mod=rss_WSJBlog&mod=

as I 'wandered' through the overseas press. Sure it relates to support centre staffing in India but it surprised me because of the ridiculous nature of such personnel policies......and I understand that I know nothing about the competitive situation between companies employing support centre staffing in that city, or indeed, in that country. I also understand that companies like Infosys have been using Bangalore as an outsourcing centre for almost 30 years and understand infinitely more about their hugely successful operations than I do about our very small operations in Colombo. In fact Infosys was one of the companies I did some research on before we went ahead with our operation in Colombo.

When we began to think about how we might operate our back end services in another country in November 2005 one of the early conclusions we came to was that we would not base it in India because of the long established presence of many multi-nationals of immense world wide 'stature' as well as many Indian outsourcing companies - dominated by Infosys. That meant to us, naive as we very definitely were, that just hiring people would be difficult (unknown company/tiny size) and then keeping people with so much competition for personnel would become a major and recurring issue.

So we found another location which was not going to be considered by US and EU companies because of its, then, 25 year old civil war and the fact that there was not a 30 year 'history' of English speaking call centre employment. Colombo became an obvious choice as did having a personnel policy of paying treble what the 'going rate' was for technical degree qualified, English speaking personnel.  We obviously haven't made the 'savings' that the US multinationals, and Infosys, have as our remuneration, based on this article, is double what Infosys is reported to pay but still one third of what we would have to pay in Australia....at least in general terms. But we are more than happy to set our personnel remuneration structures in Colombo at a minimum of double that of other companies in the same fields of operations because we want to emulate what we do in Australia - we don't want the problems associated with continuing personnel turnover because of paying our people less than other similar positions are paid by other Sydney companies.

The costs of hiring and training personnel, even if they come with previous job experience is huge - as anyone who has had such responsibilities in commercial life would know. Our most recent experience of hiring a corporate sales 'team' is that the initial hiring and training cost is around $A50,000 per employee based on the 14 hires we have made over the past 12 months. The damage to any commercial business if an employee leaves is equally large (apart from losing the $A50k training cost) and the loss of momentum in an area of your company when a knowledgeable person decides to further their career elsewhere is seldom 'caught up' which can often not only affect the other people in that specific 'team' but in other 'teams' that interact with them. All this is better known to anyone who is responsible for hiring and training personnel than it is to me.

So why do companies pay badly? Usually because they can and their commercial imperatives are based on paying as little for as much as possible and they have a 'culture' of doing so - in instances where the supply of potential employees exceeds the demand and like all 'pricing equations' keeps 'prices' low due to the inherent competition for employment. After almost 30 years of being in business in Bangalore it appears that Infosys drove 'employment pricing' below whatever 'floor' exists in employment markets and other companies saw an easy way of reducing their own employment costs by 'luring away' experienced/trained personnel from Infosys rather than bearing those costs themselves. It seems a self evident situation and presumably the senior management at Infosys became too complacent, and too greedy, and are suffering the consequences. It's understandable in very large companies where, despite any fluff and sugar coating, employees are inevitably 'units of labour' rather than individuals.

Small and even 'middle size' companies cannot treat their people as 'units of labour' or anything approaching that evaluation because of their small size where each employee's personal circumstances is well known to the owners/managers of the enterprise and 'lean' operations are more vulnerable to losing personnel than the more bloated personnel establishments of large companies. So smaller companies tend to not only pay their people better but they take much more interest in each employee's career and personal development - obviously a wide generalisation and equally obviously not true in all cases but basically true in my experiences.

Surprising that such an experienced company such as Infosys seems to have got such a well established methodology so wrong to the point where their personnel loss has reached such a high percentage of total employees.

10, 9, 8,.......