John Linton
......and it's looks like it will be up hill all the way.
We have begun the 'business end' of the year where there is only three months left to make whatever forecasts we started the year with become a reality in terms of financial and other results. We haven't modified our original targets which we set back in late June 2009 and, to date, our growth in terms of our major service offerings is still tracking ahead of those numbers but our 'profitability' has taken a fairly substantial hit over the past three months which has been very disappointing. No gain without pain and assorted other non-sensical aphorisms come to mind but as every business knows you have to make a profit for anything else you do to have any meaning.
We always knew that this would be a very tough financial year, not because of the global financial crisis which, if there ever was one, has yet to effect South East Asia, but because of the saturation of the ADSL marketplaces and the various providers different re-actions to those scenarios. For over six months we seemed to be immune to those pressures which got us to 2010 virtually 'untouched'. Now it's a different situation entirely with ISP after ISP making changes to their offerings to try and maintain their predicted growth and, as far as I can see in more than a few cases, just trying to stop the erosion of their current ADSL customer base.
We also accelerated the investment we are making in growing our business data communication services over the past nine months with the objective of growing the business we do with corporate and government entities to eventually become larger (in revenue terms) than our residential business and that has involved many, ongoing, changes within our company.
So dealing with these two major changes while keeping the company on track to continue growing in overall revenues has become a much more difficult proposition over the past three months and had demanded several new approaches to the ways we have operated Exetel in the first six years of our existence. It's too early to say whether the new approaches we have taken will prove to be as effective as we hope but there are some signs that, at least, a few of them are making an impact. I referenced the progress we had made in Sri Lanka recently which was by far the biggest 'risk' for us to take some two years ago when we committed ourselves to that approach but those risks seem to have been well and truly vindicated now and have provided the platform, both financially and operationally, for much of the other changes we had to make to progress the company and the services it offered in Australia in the far more difficult markets we saw approaching.
Personally, I have no real idea what the end result of the current uncertainties in the ADSL marketplaces will result in. I am surprised at Telstra's apparent lack of action and the parting of the ways with Justin Milne at exactly the time it would appear that decisive action is needed and probably past that time. Perhaps replacing Mr Milne WAS the decisive action but if that is the case then there should be more signs than are currently apparent to me of new initiatives and obvious marketplace approach changes - including pricing. Perhaps I'm not looking in the right places? I try to understand what is behind the other ISP changes in offerings or pricing but I see very little that makes sense to my understanding of the current market places.....all that may mean is that I no longer understand the requirements of the residential ADSL market places in which Exetel is involved.
The next few months look like being the most interesting, and easily the most difficult, of my career to date in the Australian communications industry.