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