Thursday, April 15. 2010Signs Of The Times......John Linton ........all seem to be pointing South. I don't really follow the progress of the EU telcos at all closely but I read this earlier this morning: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=122537&source=APOnlinet and I thought that it was another indication that carriers around the world are all reporting results that follow the same pattern - lower revenues and a struggle to make the same percentage profits as in the past with further indications that the future looks no better - at best. In Australia, and as far as I can see also in New Zealand, the same situation exists and the same future outlook seems to exist. Maybe I'm just reading the wrong selection of reports. However less profit, and 27% is a big reduction, if it continues means that the carrier has less/no money to invest in infrastructure with the obvious results. I doubt that anyone outside the management and shareholders care about the financial troubles that large international telcos experience and I am only mildly interested because it doesn't affect Exetel in any way but it does indicate that the trends we may be seeing in Australia aren't going to suddenly reverse themselves. Again, I doubt that anyone outside the management and shareholders of the Australian telcos has any interest in the financial fortunes of those companies either - but perhaps they should - at least mildly - because while every user of communications services (mobile or fixed line) just takes it for granted that current and new services will always be available and at lower costs 'tomorrow' than they cost 'today' that cannot be the case without the profits to invest in maintenance and new technologies that make that possible. When a telco drops 27% of its net profit it is obviously far less able to invest in its current or new infrastructures. If this drop is indicative of future performance then it is pretty clear what will happen. Personally, I have absolutely no knowledge of how efficiently Telecom Italia is operated so I can't begin to speculate on how they will address the apparent financial problems they are now experiencing (ignoring the problems with their disastrous 'Sparkle' venture). Similarly the Australian telcos all seem to be struggling to meet their financial objectives and will all 'do something about that' - possibly sooner rather than later. Let's hope they are successful because if they aren't then the quality and pace of technology development deployed across all services will continue to slow and eventually stop. 'NBN2' is one of the major concerns in this country as a political stunt, and an inevitably uninformed electorate, allow the Australian communications infrastructures to be destroyed by such a financially unconstrained level of 'competition'. So Australian carriers, and you might well say "about time", have an issue to deal with on top of those that other countries carriers are having to face. Perhaps a government owned 'super telco' will be a benefit to all Australian residential and business and government users? The issue with that proposition is that no other country has come to that conclusion (most, like Australia until a year or so ago, moving in the opposite direction). My views are not relevant to such a fundamentally important issue and, of course, I can make no difference to anything that eventually transpires. As any sensible person I broadly follow the principles set out in the Desiderata which mean that I need to find something else to ensure that Exetel, its customers and employees continue to benefit from Exetel's continuing existence as I don't see anything 'good' happening in residential communications over the coming 12 - 18 months - except, hopefully, the ongoing increase in speed and capacity of the two main mobile data networks and, perhaps, some price improvements over that period. I have no idea what is going to happen in Australian communications now that the current scenario is beginning to take some observable shape. One thing that appears to be pretty certain is that mobile data will become more important to the two largest carriers than at any previous time and that wire line revenues will become increasingly unimportant at a faster rate than up to today. Of course, anyone can see that - not so many people seem to be able to see how to address those issues plus an 'NBN2', whatever it actually turns out to be, further complicating an already very difficult set of circumstances caused by the double whammy of VoIP and mobile data. Sometimes I wish I had gone in to the mining industry. 10, 9, .........
Wednesday, April 14. 2010So Much Changes So Quickly......John Linton .......in this industry it's difficult to keep tabs on it. I was saddened to read this earlier this morning: http://nighthacks.com/roller/jag/ as Exetel's whole business operations are based on MySQL and since the Oracle takeover there has been a lot of doubt as to whether, possibly the most important open source software on the planet, was going to be chewed up and spat out as some over priced 'Oracle Light'. James Gosling, the developer of Java, leaving Sun (recently bought out by Oracle) is one more sign (he wasn't the first) that the MySQL development team is being 'let go' and that is not a good sign for the future of MySQL. Maybe that will take years to happen, if it happens at all, but I think that a company that spends $US1 billion on buying up a company (MySQL) is going to need to justify why it spent the money and why it can justify spending more money continuing to develop it. Perhaps the justification that it is an anti-Microsoft measure is enough but you would have to doubt that. It may seem to be a insignificant issue for someone who has a whole range of more directly threatening issues to worry about but, one thing being in business teaches you is that it's often problems from 'left field' that cause you the most grief as you are totally unprepared for their impact because, like right now, you become wholly immersed in the key day to day problems you have to deal with. All yesterday we had to have the key technical resources of our company trying to resolve a 'bug' that had 'suddenly developed' in our VoIP services which manifested itself in some calls from some customers (and our own VoIP PBX) being 'one way audio'. This was sporadic (perhaps one call in four either inbound or outbound) in our own operation and some different parameters in our customer's usage. As we had made a very minor hardware change the previous Monday we assumed that we had somehow made an error in that minor upgrade so the first thing we did was to 'roll back' the changes we made - it didn't help. By 4 pm we had found what we thought was the error and changed a key component which appeared to resolve all the customer problems but not our own so we concluded, logically but wrongly as it turned out, that, some how, we had induced an intermittent error condition in to our Asterisk based VoIP PBX. The hours ticked by with several engineers getting increasingly tired and increasingly frustrated as we had made no changes to our own internal VoIP hardware and software but were 'convinced' that the problems must be related to the hardware changes we had made in some way. Like the proverbial 'bleeding obvious' it was yet another example of Sod's Law which was finally traced down using our Asterisk engineering/programming resources in Sri Lanka, Chile and Australia as a defect in one of our voice carrier's services that didn't only affect us but affected all traffic that followed a particular transit path either to or from our and our customers end points. The problem was finally resolved a little after 1 am this morning and the carrier advised of what we believe their problem was. While I received confirmation that the carrier has 'accepted the ticket' and is looking in to the reported problem we can't be certain that was the root cause of the troubles we and some of our customers were experiencing but switching that traffic to another carrier eliminated the issue and was thoroughly tested. So that's a 'left field' type of problem that after 3 years of fault free operation comes 'out of the blue, potentially was affecting almost 20,000 customers and prevents Exetel reliably receiving and making telephone calls for almost 24 hours. While I was greatly relieved to receive the news earlier this morning and feel a lot better than I did yesterday it was a salutary reminder that no matter how well something has gone (in this case for over three years) anything can suddenly happen that changes your operating scenario so completely you are completely shocked....and, as in this case, all the redundancy of alternate carriers, duplicated hardware and standby hot spares made not the slightest difference. So 'death and destruction' in the commercial world can come 'out of the blue' from events as varied as a huge US company taking over your source of all your automation and possibly changing your cost structure 'overnight' to a key service that has performed faultlessly for as long as you have had it in operation suddenly failing for no apparent reason with no-one able to diagnose what has gone wrong - dealing with sudden changes in competitive marketplaces or supplier policies is child's play compared to being confronted by events that appear randomly and over which you can exercise no control and have no ability to provide input/assistance to their resolution. Is today going to be a better day? 10.........
Tuesday, April 13. 2010Does It Mean Anything When.......John Linton .........you read 'articles' like this: http://www.itnews.com.au/News/171931,tsn-sells-its-customers-to-comcen.aspx If you are naive enough to take what is written at face value then clearly the only conclusion you could come to is why is it 'newsworthy' for the temporary inconvenience of 120 ADSL customers (out of six or so million) to rate as 'news'. I mean, a temporary problem in one of Telstra's larger DSLAMs would put thousands of ADSL users off line for a few hours and that happens on a regular basis. However it is reported in the 'industry press' so 'it's news'. What does it really mean now that it has been drawn to many people's attention - at least those (like me) who waste their time reading such 'information sources'? - apart from wondering why a company so small that it only has 120 inter-State customers rates even one obscure article's worth of attention? Well, unless you are truly naive the explanation (even though it allegedly only affected 120 users) is total nonsense. The 'sale' of 120 customers wouldn't "fall through" after three months because it involves 'pocket change' and it's almost impossible to understand what could "fall through" and why, on the remote chance that such an event could happen, why it would result in those customers having no internet. Can anyone come up with a scenario where that could happen? I very much doubt it. The most likely, by a 99% likelihood, situation was that TSN, in some delusion of grandeur, decided it's tiny presence in a NSW coastal town needed bolstering by creating the illusion that it was a "national provider" and created that illusion by using a re-wholesaler of ISP services to provide that capability - in this case one of the failed re-wholesalers that has ended up in M2's hands via whatever process that happens. Buying via a re-wholesaler is never a good idea, financially or in any other way, and doubtless this became more and more financially unsustainable as time passed and the predicated user 'volumes' turned out to be something like the alleged "120 users" - not exactly even a break even proposition. So it's only guess work to proceed beyond that point but based on the sudden cessation of internet supply it would be a fair bet that M2/whoever pulled the plug to force TSN to allow them to pass the customers over to another of their re-wholesale customers in 'forgiveness' (partial or in total) of money owing over the past whatever period. That explanation may be totally incorrect - but it fits the 'known facts' much better than "a sale falling through". A sale falling through would not affect the ongoing delivery of services by the seller in any way. So what does it mean, if anything to the ongoing marketplace palpitations that are enveloping the ADSL marketplaces? Nothing really - at least as far as I can see it is a complete non event drawn to people's attention via being deemed worthy as 'news' on what must have been an ultra slow news day. In general perhaps it is a feather in the wind continuing to emphasise that whatever was thought to be possible in late 2009 has become less possible or impossible in early 2010 and the very tiny end of the data communications supplier chain has come to an end. Many people in the Australian communications media, few if any using actual facts and figures or even any knowledge of the industry in general, are speculating on the future provision of communications services to Australian customers with the common mantra of "ongoing consolidation" and "only the very largest will survive". Who knows - as a generalisation with no specific time frames that maybe true - it certainly is a possibility but then such a general scenario is always true in any industry at any time - but it seldom happens in any predictable way and, subject to correction, it is difficult to find an historical equivalent scenario.......that occurs over a very short period of time. Smaller companies always have a problem competing with larger companies for the reasons set out in that widely studied Kindy subject - "Business Realities For The Under Fives". In theory, as set out in chapter one of that book, no company smaller than the largest three (or four) can survive in any aspect of commercial endeavour for more than a few years. However chapter two of that book has a caution that in fact that has never been the case and that from Steel making through pharmaceuticals to automobile manufacturing and every thing in between the provision of millions of products and services are done by millions of smaller companies in every industry type at profit margins the behemoths of any industry can only dream about. If, as a four year old, you get to chapter three before you graduate to primary school (and take up "Advanced Business Principles For The Very Young" - which deals with same issues but caters for the more mature student) you would have learned that God, in her wisdom, made it an immutable and universal law of commerce that smaller will always be more beautiful (in the eyes of a section of any marketplace) and not only more beautiful but immutably always more nimble and always almost infinitely more efficient - which explains why there are so many, long established, smaller companies in every industry type where the majority of the market is 'dominated' by a few very large companies. So, perhaps, the cited article does indicate that some/many/most small companies reach a point where they can't compete (that is undoubtedly true in the history of commerce to some degree or other) but to extrapolate from it, even if you take what was reported as being true, is stupid - 120 users of ADSL services (if that is fact the case) experiencing a short period of unavailability means nothing at all to the industry generally or its six million users. Big is useful in many ways but it has very significant down sides - take a brief look at the last 30 years of as many industries as you can be bothered to spend time on....start with Telstra, Optus, Vodafone, Hutchison and AAPT in Australia and work out the ROI you as a shareholder would have received if you had bought shares in those companies when they became available. I can save you the trouble and tell you each one of those 'investments would have lost you money and a term deposit would be 300% better than the best of them. Would you be a happy camper now? Or would you have been better off putting your money in a bank term deposit? Big seldom delivers to anyone except the top and middle management....remember El Sol?
Monday, April 12. 2010VoIP - Still Not On The Horizon For The People Who Need It MostJohn Linton Over the past year or so I have been 'invited' to give a presentation/demonstration of how VoIP can be used by businesses to not just reduce costs but to transform some significant ways they deal with their customers. These one and a half hour events are organised by one of Sydney's larger accounting practices and are held over a business breakfast in the CBD. Normal attendance, excluding the accounting firm's personnel, is around 30 - 40 people and the latest 'invitation' is the 7th I have received since November 2008. I am happy to make this time available because I get a good 'exposure' to why businesses do not use VoIP and I hope I play a small part in dispelling some of the more ridiculous 'myths' that are still around years after the issues disappeared. I have little doubt that similar VoIP explanatory 'events' are held by all sorts of other professional advisors and hardware and software companies all over Australia every month of the year. I am assuming my 30 or so minute presentation/demonstration is relatively lucid and effective and, possibly, even helpful (I base that on the continuing invitations and the comments by the attendees) but I don't think I have ever changed any attendee's views on VoIP enough for any of them to actually take steps to install a VoIP service within their companies. So I spent some time yesterday looking at the notes I use to make the presentation with a view to improving what I say. I speak from the point of view of a VoIP user rather than a VoIP seller but I obviously fail to convince anyone who listens to what I say that VoIP is easy to implement and even easier to integrate in to any company's data base and CRM services - although my direct experience over many years in using VoIP, and more recently MOIP to keep in contact with our customers for an increasing number of scenarios shows that to be the case. If I can't do a better job of showing other business managers why and how VOIP can provide very significant operational and financial benefits I think this will be the last time I do this - purely for the benefit of the future attendees who need a better presenter than I am to actually change their minds about VoIP. I reviewed my notes and changed almost everything in them except the actual VoIP demonstrations. I also reviewed the questionnaire the attendees are asked to fill in but made no changes to the current questions. The main questions have always been: 1) Do you use VoIP in any part of your company at the moment? 2) If not - do you think you will use it a) within the next 6 months?; b) the next 12 months?; c) at some future time - but no plans d) no likelihood of using VoIP within the next two years? 3) If you aren't going to use VoIP in the near future what best describes your reason(s) not to? a) Doubts about call quality b) Doubts about reliability c) Doubts about in house expertise to install and maintain d) Already get a lower cost telephone solution from my carrier e) Have no need/applications that would benefit from VoIP 4) Has this session changed any of your views about VoIP positively? I have tabulated the answers to these questions for a little over 200 attendees and while well over 90% of attendees answer 'yes' to question 4 (obviously politeness overcomes honesty). Almost 100% cite at least two and up to all 5 of the sub points in question 3 as reasons why they will not consider VoIP in the immediate future. Telstra and Optus (and all other re-sellers of those carrier's services) have always offered very low cost call charges to large corporate customers and over the past few years call charges for even quite small business customers have continued to decline as Telstra and Optus have tried to maintain their telephone line rental revenue. VoIP hasn't really affected these large customers (as the results of my questionnaire indicate) and call cost savings from using VoIP aren't going to change that as Telstra already offers call charges lower than VoIP to an ever widening demographic. Line Rental charges though are another 'kettle of fish'. I wonder how long it will take for even quite small companies to become aware of what their line rental charges are as a percentage of the office/administration expenses? So I added a fifth question but put it at 1) which is: 1) Are you aware of what your company pays for telephone line rental charges this year compared to last year? When I look at what Exetel paid for telephone line rental charges up to 9 months ago (even though we made no PSTN/ISDN calls on them) it was a great deal of money in our office operating cost budget - after rental it was the highest cost. I would have thought that most businesses would have wanted to reduce their second highest operating cost if there was an easy way to do it - it appears that VoIP is not regarded as easy by many businesses.
Sunday, April 11. 2010Is There Any Future For Telstra At All?..........John Linton .....if they 'give in' to the Federal Government's demands? Being the weekend there is more time to read the weeklies and monthlies and catch up on the more obscure web sites and 'publications' that contain information about the Australian and other countries communications issues and technologies. Much of what I read was about the current 'discussions' between the Federal Government and Telstra on how to transfer Telstra's residential telephone and ADSL customer base from its PSTN to the mooted NBNco. The side issue of access to the ducting etc is neither here nor there - it's simply an arbitration issue on a true price rather than the stupid price dead lock that two unrealistic parties can make a dog's breakfast of. I couldn't help but get the impression that these negotiations, whichever way they come out, give every sign of being Telstra's "last hurrah" as a relevancy in Australian communications. Why do I make this statement? Well because, when all is said and done, does anyone ever want to buy Telstra communications services or rather does ANYONE want to pay outrageously high prices for ANY data or voice communications service? I mean does ANYONE ever want or choose to pay more for ANY service or product if they have a choice? The answer is there is some percentage of any marketplace that equates the highest price to 'the best' but that percentage has never been all that large. So what actually does happen to Telstra if, somehow against all financial rationality, an NBN does get built and via some large government subsidy does get to deliver communication services to a significant number of Australian users? Telstra would have committed some 50% plus of its most highly profitable revenue sources away from its own price controlled infrastructures to a 'commonly shared' priced infrastructure (where it will have picked up the lowest cost possible compared to its competitors but nothing like the price differential it had using its own PSTN) and it will have retained its bloated cost structure for selling, provisioning and supporting end users...and it's insanely bloated and grossly overpaid executive/management structure. It then has to compete with a bunch of companies it used to make huge profits from who have always been able to offer services at lower prices than Telstra itself did but who then 'enjoy' something like price parity on infrastructure costs and far better administration, sales and operating costs - and 'infinitely' lower management/executive costs. SingTel/Optus have become a larger mobile provider that Telstra because they had no need to buy infrastructure from Telstra....but SingTel never tried to sell their services at anything much lower that Telstra's sky high prices because they in turn were used to running a monopoly and were content to gouge the Australian customers at only slightly lower prices than Telstra did - bearing in mind that when Optus began its mobile deployment Telstra had 100% of the market charging prices that would seem unbelievable to today's users. Telstra have also lost over 50% of their initial 100% of the ADSL market - again a big chunk of that has been to Optus who, once again, chose to let Telstra set a sky high pricing model and then only slightly undercut it but other companies, notably TPG, have taken close to 15% (and still growing market share) by simply cost reducing the provision of service and NOT buying very much from Telstra in terms of infrastructure). Telstra is only the dominant provider of residential communications services in Australia because, largely, they make it too expensive for any other company to offer communications services by charging exhorbitant prices to connect to residential users in Australia. If that were to change then Telstra would not only lose the huge profits it makes from their shrinking wholesale customer base but they would face competition, even from Optus, that offered services on the same 'third party's' infrastructure used by Telstra but offered those services at 50% or greater discount to Telstra's costs. If I have got this 'analysis' even vaguely correct there is absolutely no chance that Telstra will agree to 'sell' its current PSTN customer base to the NBNCo because if it does the company will cease to exist in the not so distant future. The other inevitable truth about monopolies is that can't continue to exist in a non-monopoly' marketplace - they don't have any of the attributes required to deal with a non-monopoly environment.
Saturday, April 10. 2010Business Is Business.......John Linton ..........and 'Residential' is just an ongoing 'hat full of problems' - comparatively. As I've undoubtedly mentioned over the past year or so, Exetel began a process of attempting to balance our revenues by building a new business sales operation to put far more emphasis on growing our business customer base. Our logic was pretty simple in that even selling data services at something like 80% less than Telstra and the other dinosaurs charged (and some 30% to 40% less than the smaller data communications providers) we could provide better and just as reliable services to the customer and make far more money than the equivalent revenue from residential customers generated - and still remain 'true' to our corporate objectives of offering equivalent or better services at far less cost than any other provider in the Australian marketplaces. As it becomes increasingly difficult to provide the lowest cost services in the residential marketplaces it becomes more important to look at other marketplaces where Exetel can have a positive impact. We have been providing business SHDSL services since April 2004 and still have three out of our first five business customers some 6 years later and an overall 'churn rate' of less than 1% per annum of business services so we had a very solid network/technical support base to build the growth program on. While we also still have three out of our first five ADSL customers our ADSL churn rate is far higher than our business churn rate though exactly the same network capacities and capabilities are provided to residential users as are provided to business users. The obvious difference is that a business user has a dedicated line that is not subject to the vagaries of the Telstra exchange comings and goings and a business user is, in almost all cases not 'fiddling about' with their router/modem set ups and declaiming that any subsequent problems caused by that are somehow their providers. March marked the first 12 months of our beginning this program and we reached the first mile stone of new business revenue exceeding new ADSL revenue generated in a month for the first time and monthly business revenue reaching 15% of ADSL revenue for the first time. Obviously there is a long way to go before we reach the 50/50 levels we are aiming at but much of the really difficult work in building the sales methodologies and infrastructures has been done over the past year and, if all continues to go well (and that can never be certain) the pace of growth will continue to increase as we now acquire new sales people at a faster rate. This remains the most important of all our initiatives as, even at the lowest prices in the marketplace, business sales generate net profits of 30% compared to ADSL services that barely break even - in a good month they generate around 2% profit after all expenses. Exetel is still meeting its ADSL net growth targets each month but we expect that will continue to become more difficult as 2010 progresses. Our plan to replace any shortfall of ADSL growth at a 2% profit with a similar and now greater revenue growth at 30% profit remains a key stone in our plans to keep Exetel both growing and growing more profitably than in the past - because of the necessity to deal with a stagnating ADSL market place and ever fiercer competitive activities. The enormous up side of such a 'strategy' is referenced in the title of this musing - business customers are far easier to satisfy and keep satisfied and tend to never leave you providing you constantly reduce their costs as we are able to obtain better rates for the components of the services....which we have been able, and willing, to do over the past six years. The key issue now, is can we continue to recruit as effectively as we have in the past and will our methodologies and processes that have been so successful to date continue to work as well as the numbers of people quadruple over the next 18 months or so? I don't know the answer to that question but I have always believed that if you recruit very high quality people and pay them better than any competitor and create a 'vibrant' working environment then you will succeed in meeting whatever realistic sales targets you set. So far so good.
Friday, April 9. 2010There Appear To Be Deeper Issues.......John Linton .....than I thought affecting today's Australian communications market places. We had expected to have signed off on our 'negotiations' for new services well before now but the revised approach we have taken to obtaining bids for our, not very large requirements in the context of the current 'buyers' in Australia, seems to be of a disproportionate interest to some of the suppliers we approached. I am, through experience, a very conservative buyer of base services as I have seldom seen 'new' base service providers deliver on new infrastructures without very significant 'negatives' that seem to last far longer than even the most pessimistic estimates. However I am having a great deal of trouble reconciling the current price disparities between the pricing offered by our 'traditional/long term' providers and the newer possible entrants to the Australian marketplaces. Perhaps our previous approaches to 'negotiation' have been naive and, maybe, even just plain stupid and our long term suppliers have got used to treating us carelessly? Maybe I will have to accept that we have, through my personal stupidity, allowed that view to have grown over the years. I think that is probably a distinct possibility. However I can't help thinking that something else has changed this time around that is making more difference than modifying our previously naive buying processes. Possibly its the fact that the number of potential purchasers of IP services in Australia is decreasing (Westnet, Soul, People Telecom, and now NetSpace all 'exiting' the buying process over the past 18 months or so). Those companies 'exits' don't leave many buyers of any 'size' left for the newer entrants to sell reasonable amounts of IP services and inter-State transits to. I think that may have had a greater influence than I thought when we started this years 'negotiations'. With the times being as tough as they currently are and, at least in my opinion, likely to get significantly tougher it is very difficult for us not to move away from the providers we have dealt with over the last six years and to 'try something entirely different'. My back of the envelope calculations of what the latest 'revised' offer we received last night would reduce our costs by over the offer we are (were?) about to sign a contract for shows cost reductions over that offer that are hard for us to not consider very, very carefully before making any 'final' decision. We will do the proper analysis of the new offer today and then carefully consider the various ramifications over the week end before making a final decision next Tuesday when Steve is back in Sydney. We need to also consider the wider issues of what such offers mean to the Australian data communications 'industry' more generally. A year ago I simply couldn't conceive that IP costs (available to a company of Exetel's size) could fall by over 70% in 9 months. Although IP is no longer the largest component of providing internet services (the port and carrier connection costs are five times larger) it is still significant and the lowest costs currently offered would cut our current IP monthly bill by 66% - which would transform our profitability forecasts to numbers we never dreamed possible....not a bad 'day dream' to allow yourself to have - even if only briefly - because such things don't really happen in business. Or do they? Perhaps Exetel, like so many residential buyers of communications services, has become used to being 'ripped off' by the prices charged by Telstra and co over the past 20 years that we actually don't believe that anything else is possible? Perhaps I should go back to the base maxim of my technology past where the expectation always was that prices fell by 50% and delivered twice as much every 18 months and use that as a base point for asking for new pricing? That level of pricing, at least at the moment, is easily achievable. I guess it puts clearly in perspective the danger of living in a country that has a monopoly infrastructure provider - gouging pricing is the inevitable result without competition. As the ADSL market becomes even more fiercely competitive it occurs to me that it might be worth considering re-selling IP bandwidth to some smaller ISPs but mainly to larger corporate and government users. Currently, as has always been the case for Exetel, we put in a lot of effort and cost to make almost nothing out of ADSL services and that will only get worse over the coming 12 months or so. It might make much more sense to deliver IP services to the corporate market without the hassle of dealing with Telstra? What is the only thing worse than a commercial monopoly? A government monopoly?
Thursday, April 8. 2010One Step At A Time.........John Linton ......covers an awful lot of distance over six plus years of 'steps'....and now it's time, once again, to plan for the coming financial year. We settled on the purchase of the new North Sydney office space earlier this week and then met with the builder and work station supply people to get the work done to refurbish it and make it 'inhabitable'. When we started Exetel (in its current incarnation) in January 2004 in a small spare room in our house having decided to invest all of our then available money into the new venture it was inconceivable that six years later we would have invested five times more than that in buying commercial property to house its continuing growth - particularly as we had moved half of the company's operations to Sri Lanka to contain the Australian personnel growth costs. We made the decision to buy our own office space rather than continuing our pattern of increasing the amount of space we rented for sensible financial reasons (Australian 'accommodation costs' were reduced and the commercial property market prices had reached a ten year low due to the 'global financial crisis'). However it still seemed, to me, to be a big personal commitment and very far from the expectations I had when we commenced this process. Similarly, either this month or next month, we will bill more than $A5 million in a month for the first time - a far cry from the $A10,000.00 or so we billed in March 2004 and, like taking the first step and then the next and then..... we will see the result of what happens when you achieve an unbroken record of increasing your revenue each month for 75 consecutive months or whatever it is we are up to this month. Of course, in industry terms, these numbers are tiny and I'm only referencing them in terms of what happens to an individual's view of what happens in 5 or 6 years of operating a start up business and how where you 'end up' over such a period varies widely from where you thought your efforts would lead you to when you started the process. I certainly didn't think that Exetel would be where it is today and, I'm pretty sure if I had known that, I would never have commenced the process. Not that I don't think that Exetel hasn't done quite well - in terms of surviving in an endeavour where so many other 'start up' companies have disappeared without trace alone is some sort of achievement. To have built such a quintessentially efficient operation in two countries and have to have so closely interwoven their individual operations is something that gives me a lot of pleasure to have been part of and to have built such a solid financial entity in such difficult circumstances is something to be at least mildly proud of being a part of. However it isn't what we had planned and that, at least to me, is disappointing. I recognise that the planning' we did before starting Exetel was very deficient and our non-achievement of many (all?) of those initially set 'goals' was, at least in hindsight, never going to happen but that doesn't lessen the vague sense of disappointment in not achieving what you set out to achieve. Perhaps I always feel like this when I begin the process of reviewing the past 9 months in order to better plan the coming 12 months that will begin on July 1st 2010 - although I have been developing business plans for as long as I can remember I actually can't remember how I felt doing this even last year at this time. Although the current financial year has been the most difficult for Exetel of its short existence I think the 2011 financial year will be a lot more difficult - and across every aspect of our business. I don't say this with any real sense of trepidation but simply as an acknowledgment that we will have to change what we do and how we do it more completely than at any previous time. While we have built a very solid platform for our current businesses we will need to change quite significantly to meet the needs of our future businesses. That's something that is always difficult to do for even the most flexibly minded of sensible people. Any sensible predictions/insights into what will happen in the Australian communications market places and infrastructures over the coming 12 months would be appreciated. Wednesday, April 7. 2010Now - The Run To This Years 'Finish Line'....John Linton ......and it's looks like it will be up hill all the way.
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. Tuesday, April 6. 2010The Holy Grail Of Call Centre Experience Satisfaction.....John Linton ..........continues to be knowledge and the ability to apply it to a huge range of customer questions. We continue to make progress in developing the residential sales, provisioning and support operations in Sri Lanka and are coming tantalisingly close to meeting the first of three major goals of answering 50% of all telephone calls within 'five rings' and averaging less than one minute to answer all telephone calls as can be seen from the telephone statistics published here: http://forum.exetel.com.au/viewtopic.php?f=324&t=27043&start=15 With the average support call being answered in one minute and ten seconds, provisioning calls in an average of 45 seconds and sales calls in 90 seconds the telephone response times are better than any other Australian communications company by a very long way - in these terms there is Exetel and daylight based on the checks we do on the 'top ten' Australian communications companies telephone answering services.The results for February are as close as we have yet come to the targets set for the Sri Lankan operation and there are still four months to go to meet those targets so we are hopeful they will be met and then sustained. Any customer can check what likely wait times there might be for any type of service by checking the 'wait time' listing that's updated every 30 seconds on the Exetel web site: http://www.exetel.com.au/contact.php On most occasions this will show "no wait" in all three queues. Targets for 'picking up the phone' are obviously only one, first, standard to be met in providing such services and, of themselves, do not mean that much - other than it is important not to make callers wait to obtain the information they are seeking. The knowledge the person answering the telephone brings to bear on the questions the caller needs answers to is, in almost all respects, the key attribute of any customer oriented telephone answering service. I have never run a call centre personally but I have had overall responsibility for providing such services as part of a range of responsibilities on two occasions in the past and have been in a position to closely observe the operation of a call centre on one other occasion - of course, like everyone else, I have been a user of other companies call centre services on many occasions. My personal experiences of using other companies call centres has generally (and with only one stand out exception - Hewlett Packard in Manila) been disappointing with several calls being a complete disaster. Irrespective of the location of the call centres I have contacted or been associated with the overwhelming problem of call centres appears to be the knowledge of the person answering the telephone. Therefore the challenge in operating a call centre is always 'deploying' people who answer telephone questions who have extensive knowledge and the ability to use that knowledge effectively in the context of a wide variety of customer scenarios - a statement of the bleeding obvious......but nevertheless the crux of operating an effective help line facility. Since it started offering residential services Exetel has continuously updated FAQ lists for each of its different services and processes and over the past three years has added a wiki that expands on the FAQs as well as incorporating them in toto. This was done to provide our customers with the same level of 'knowledge' as our employees and has been more or less effective in ensuring that our knowledge of commonly asked questions was accumulated in one place and constantly refined. Like all such processes - it is an endless take to update, refine and correct such a resource and those processes have not always been done as effectively as they should. Our major task, which we began some 5 months ago, is to bring the FAQs/wiki completely up to date and to involve all of the SL personnel in the process of adding to it and refining it with the goal of having at least 1,000 absolutely correct entries in it by mid 2010. Starting from March of this year we will run a 'knowledge test' for all SL personnel (from the very top down to the newest employees across all 'disciplines' based on a computer random generated question list of 50 rising to 100 questions at the the end of each month. We will rank all employees from 1 to 50 on that test and take remedial action to increase the knowledge acquisition of those personnel who fall below some defined 'pass mark' with the objective of all personnel reaching a 90% plus achievement by some yet to be defined time. Given that we only employ university/technical college graduates and that we now use a better mentoring system in Sri Lanka we have high hopes that, over a relatively short time, this process will accelerate the in depth knowledge acquisition of the people who answer telephone calls from Exetel customers.....additional months in the position will, obviously, also add the required knowledge on an ongoing basis. While such a process remains the most difficult thing to do in providing call centre services we believe that it will allow us to achieve the second of the three major requirements of running a world best practice operation well before the end of 2010. If we can do that, and I'm very sure we can, we only have one step more to provide the best telephone support operation that has ever been achieved in Australia and probably many other places.
Monday, April 5. 2010It's Difficult To Plan For The Future.......John Linton ....if you don't fully understand how you got to where you are today.....and why. Statistics are essential in operating most businesses and their collection and analysis are a major part of most senior manager's working lives. I have never been good with 'numbers' being much more adept with 'words' - I can do a cryptic crossword much more easily than I can do a Sudoku - but my working life is dominated by statistics and I have learned to collect and work with them over time. However I received two emails last night - one from an Exetel employee and one from an Exetel Agent that showed how both interesting and dangerous statistics are and how difficult it is to use them sensibly. http://www.youtube.com/watch?v=cL9Wu2kWwSY http://hothardware.com/News/Mobile-Data-Surpasses-Voice-Traffic-For-First-Time/ I found the 'information' in these two links interesting, and amusing, enough to on-send the emails to all our Australian and Sri Lankan personnel and subsequently received a third link to an updated version of the first one from one of our forum administrators: http://www.youtube.com/watch?v=6ILQrUrEWe8 There are some statements in all three of these links that, if you think about them for a few seconds, simply can't be true because it would be impossible to collect the data to frame the analysis but most of it makes sense and illustrates the points very well. The 'article' initially interested me the most as it had some factual basis that made its prediction that mobile devices would carry more data than wire line networks within 10 years. While that seems to be unlikely in today's contexts it was supported, in a sense, by the following two statistic deluges that reminded me that things continue to change ever more rapidly in technology. I was also reminded that when I listened to an update on wireless technology in the EU some 4 years ago the speaker predicted that wireless data would reach speeds of 160 mbps in commercial networks by 2010 via LTE - and that prediction, as well as lesser speed mile stones over the past four years have all been achieved. If ever there was any doubt about such predictions the comment (and I couldn't corroborate the attribution) that the major US mobile networks are now deriving more revenue from data than from voice removed them. As any simpleton knows - commercial investment follows the money and if there is money to be made in mobile data services then the money required to develop the infrastructures that will increase that amount of money will have no trouble being found. Maybe mobile infrastructures won't carry more data than other infrastructures in ten years time......then again maybe they will. The only thing the past and current circumstances have ever reflected in my four plus decades in the technology industry is that wherever things are today is an exact definition of where they won't be 'tomorrow'. I don't see any references in what is happening to our local communications industry in either the cities or regional and rural areas that would contradict the broad generalities of the stat deluges on VoIP or the 'facts' cited in the article. My eldest son has spent Easter in the Hunter Valley on a rural property where he installed an Exetel wireless service for his fiancee's father and he emailed me saying it is now running at over 3 mbps compared to half that speed when it was first installed - that is simply a clear example of what will happen across all of the wireless networks around Australia. Will it ever get to 160 mbps - almost certainly not. Will it get to faster than 3 mbps - without any doubt at all. I use my mobile wireless service in both my Nokia and my Sony lap top and I never have any problems in the places I use those devices and our household will almost certainly never buy another desk top and will probably get rid of our last telephone land line (we used to have three) before the end of 2010 and use mobile telephony and wireless broadband. Will we install an 'NBN2' service? Only time will tell. Sunday, April 4. 2010The Customer Is Always RightJohn Linton How many times do you think to yourself "I don't have to worry about that any more" - and then you do? It seems to me that it happens constantly and just when you think you have absolutely, and for the very last time addressed some niggling, or major, issue and moved on to something else - you have to go back and do it all over again. I'm beginning to think that I am simply not equipped to do the things I have taken the responsibility for doing in either my personal or business life - either that or I simply don't understand the fact that some large number of things will never work or work out as you have every right to expect them to. Perhaps it's just that the human species gets bored easily and doesn't want to do things that obviously work well when you do them a certain way so they must do them differently after a while to see if they achieve the same, required, results? Maybe human beings are innately creative and therefore can't bring themselves to do things the way they know produces the expected result or maybe they simply get bored with doing things that are required to produce essential results and don't bother to do them at all? Too negative? Perhaps. But even on this beautiful Sunday morning with its bonus extra hour of sleep can't rid me of the annoyance I felt in dealing with my emails this morning. There was the latest email (five previous) from a woman customer screaming (in the written sense) abuse at me, Exetel generally and all of its employees that she has been without internet for three days over a long weekend because of our stupidity, indifference, ineptitude and rudeness and..... Her internet service was suspended for non-payment. She had lost her credit card and canceled it. She called up and was told to look at the screen and enter a correct credit card number which would restore her service or simply click on the 'forgiveness button' and restore her internet for 72 hours while she sorted out how to deal with it. So she tried to do this but, for whatever reasons, she, three times, entered credit card details that were incorrect over a period of two days. Interspersed with each wrong entry were abusive calls to Exetel demanding restoration of her service and for the last day and a half emails to me of unbelievable levels of abuse demanding the same thing. Eventually she managed to enter some correct credit card details and, magically, her service was restored. So, the first email I looked at this morning was yet another tirade of abuse demanding "compensation" for her children not having internet access for two days of the long weekend and a statement that the first thing she did when her access was restored was to churn away to a "half decent ISP". The second email I read earlier this morning was a similar stream of abuse, if anything even more unreasonably worded, from a person who had emailed me twice before over the past two days stating that not having telephone "support" had caused him to lose "$112,000" in his business and he was going to "sue Exetel for every last cent". I replied to his first email which I received around 10 pm on Friday night saying that he could call Exetel support 7 days a week and that on week days (including public holidays) and that support hours closed at 9.30 pm (AESST) so he could call again tomorrow but as it was a weekend support opened at 12.30 pm but closed at 9.30 pm. Around 11.30 I received another even more abusive email saying that "he had checked on a third party forum and had been assured that Exetel had no telephone support and demanding that I resolve his problem. I replied giving him the support telephone number and the url of the support contact page. Back came an even more abusive reply saying I was a liar and and he had checked on the third party forum and been assured that no telephone support existed and "he was going to his lawyer". I got two more abusive emails yesterday and this morning he sent, presumably his final, abuse email saying that he had got a 'PC help company' to come over and fix his problem (he didn't specify what the problem actually was but obviously it was no fault of Exetel's) and that he was going to charge Exetel for the cost of that plus all the "hundreds of thousands of dollars he had lost" because he didn't have an internet service required to run his business. The customer is always right even when they can't enter a credit card number correctly or seek (completely wrong) advice about how to contact Exetel on a third party forum and refuse to believe the url and telephone number details provided to them by the CEO of the company whose contact details they somehow managed to find. Such people certainly do nothing to brighten up your early Easter Sunday morning.
Saturday, April 3. 2010Wire Line Telephone Calls.......John Linton ........joining horse drawn carriages and hand written letters as dim memories of times past? For whatever strange reason Exetel had a sudden 'surge' in telephone call revenue last month - an increase of almost 20% - which was very welcome but had no rhyme or reason and I doubt whether it will be repeated in the coming months. However it did cause me to consider the future of telephone revenue for Exetel which has only ever been a very small percentage of our business and we have never provided telephone rental line services except as part of the Optus based ADSL2 service. My view has always been that VoIP is so much cheaper than wire line telephone calls costs (let alone the additional line rental) that the markets for such services would rapidly decline and should be left to the carriers that operate them. I am clearly wrong in that view but we have always had much more important things to do over the past six years. So I read this article: http://www.zdnet.com.au/voip-the-default-for-optus-hfc-customers-339302201.htm without any real interest and found it riddled with the usual sloppy reporting and incorrect 'facts' as all such articles are but was a little surprised that, assuming it was reporting correctly, that a company like Internode was, apparently, charging "$A29.95 for a NodePhone" linked to a VoIP service. Of course it wasn't being reported correctly and the 'tweely' titled "NodePhone was simply a stupidly titled name for a re-billed Telstra line to which Internode adds nothing other than the billing of the telephone line....it remains a standard Telstra PSTN service....a service that has been offered by, literally, hundreds of re-billers since 1995 or so. What the 'reporter' of this breath taking article fails to understand is that a very large amount of VoIP is used by major carriers around the world and in Australia in their telephone networks so the 'shock/horror revelation' that Optus is using it on its HFC network is not either news or some sort of misrepresentation - just more sloppy, inaccurate and irrelevant Australian communications industry journalism. Having said that, the fact remains about the impact on all Australians of the accelerating decline of usage of the Australia wide (Telstra operated) residential PSTN and the future implications of not having it at all. There are now, according to unverified media reports, almost twice as many mobile telephone services in use in Australia than there are wire line telephone services. So if there were no wire line services available then it would make very little difference to wire line end users except those that currently have wire line services and are too remote to obtain wireless signals. As Telstra is being hounded by the current government to abandon its copper based services there is a probability at some time in the future that there will be no PSTN - bad news for a few but otherwise no problem - or is it? It is no problem if, as a supplier, you aren't dependent on ADSL type technologies and VoIP services that are dependent on ADSL. That market will disappear with all of the long drawn out operational problems and financial problems that are part and parcel of such changes. And it will. Only the time frame is uncertain. Having a wire line telephone (or a data service based on a telephone wire line) in some not so distant point in time will be as common as seeing a pony and trap on Parramatta Road. I'm sure that must be obvious to anyone vaguely associated with providing such services. So, 'everyone' can see this evident trend and will move from providing services over the Telstra copper network to whatever replaces it - pretty obvious scenario....even Exetel can see that necessity and at this stage a little less than 15% of the data service revenue we derive comes from non Telstra copper based services and that figure has grown from less than 3% some three years ago....presumably other communications companies will have similar trends. So it is 'inevitable' that the habits all Australians have developed over the past 100 years of basing their communications lives on a highly reliable copper based telephone call oriented network will, at some not too far distant time, have to change. But to misquote Henry Ford (who most people regard as the agent of change between 19th century and 20th century transport methods) "if I'd asked people what they wanted to improve their transportation needs they'd have said - 'faster horses'". I wonder if there is a corrolary there? Perhaps if you ask Labor/Green politicians or other generally uninformed people today what they wanted to improve their communications experiences they would tell you "faster in ground wire". If that thinking had prevailed 100 years ago the world's cities would be covered in horse shit.....though come to think of it...........
Friday, April 2. 2010Tougher Times Getting TougherJohn Linton We have been 'negotiating' for a final IP price with the two companies that have put in realistic prices (realistic in our views) and have reached a price which, while not wonderful is sufficient for our current purposes. We will, we are assured, receive the last 'final' bid from the last of our preferred longer term providers early next week but even if that bid doesn't better meet our needs we could choose either of the current 'firm' bids and put in place the plan changes that will be required over the coming months. I'm not sure whether I am getting too old to do this job as effectively as I once did or whether I am expecting too much but the end results this year are not what I had hoped for. Perhaps it's just that Exetel hasn't 'kept up the pace' and in these difficult times our residential business is less important than it has been in the past? Irrespective of whether we should have done better or not in these negotiations the worst price we received has allowed us to almost double the current bandwidth at no additional cost to we are paying now and allows us to release the three ADSL2 unlimited plans to our current customers by early next week. The slight delay was caused while we waited to see if TPG were really brave enough to try and offer telephone voice services over the old Comindico network. From my reading of their plan announcement they weren't that brave, at least right now, so their offer is scarcely, if at all any better than the AAPT plan it was addressing.....as far as I can see. So, TPG's 'timidity' will allow us to offer unlimited ADSL2 plans that are lower cost than either AAPT's or TPG's (in three different formats - line inc, byo line and 'naked' which neither TPG nor AAPT can do) and give our own users no reason to move away from us and allow us to assess the impact of unlimited downloads with the cushion of an additional 4 gbps of 'real' bandwidth as well as some unknown amount of peered/cached bandwidth. In the meantime it 'protects' us from an influx of 'download the internet because its free type users' new customers which will continue to move from other ISPs to TPG and AAPT. At this pricing we still have some 'room to move' if, as expected, competition drives such plan prices lower but our objective at the moment is simply retaining our valuable customers - we have no desire to use unlimited plans to attract new customers. At least that's the theory....and using this approach it allows us to test the validity of those assumptions.The other thing that the current negotiations allow us to do is to I have little doubt that all other ISPs, at least the ones that are left, will continue to re-assess the plans they offer to the market and will continue to attempt to make their offerings more attractive. At our proposed pricing, and dependent on what now happens, Exetel is able to look at the coming months with a little more certainty than we did over February and March....of course, the next few changes will put that in better perspective....particularly whatever it is that Telstra is cooking up. It will be interesting to see what happens over the coming quarter and I feel a little more confident than I have done for a while....though with the Netspace demise it is getting a bit lonely to be an ISP of Exetel's size.
Thursday, April 1. 2010Too Much Just Plain Wrong InformationJohn Linton One of the problems in reading the communications industry media diligently is that you notice, over the past few years, the drift from useful factual reporting to less factual reporting to simply reporting fantasy and speculation to eventually reporting the fantasy and speculation reported by other 'reporters'. This isn't true of the major communications media in the US or the EU which, for the most part, remains pretty solidly reporting facts and figures and competent pieces on technologies and implementations. I don't make these statements as disparagements of any Australian communications reporter in particular but just as a general observation of my own reading habits which have progressively reduced in terms of the number of Australian media outlets I either subscribe to or book mark on my own personal daily reading list. To illustrate this view - think back over the past year and try and estimate how many hundreds of thousands of words have been written in the Australian media about the 'NBN2' and then estimate the same for the 'Internet Filter'. Depending on the view you reach you will come up with a number that almost certainly exceeds several hundreds of thousands and may well far exceed that. My own estimate is North of 8,000,000 for the 'NBN2' and far in excess of 5,000,000 for the 'Internet Filter'. Now try and think of any other topic of either Australian or World concern that has had anything like those two subjects media coverage including the totally worthless topics of the shenanigans of trivial 'personalities' apologies for lives that get saturation comment for a day or a week or two . Get the point? Nothing has changed since the announcement yet so much has been written about......... absolutely nothing. Neither the 'NBN2' nor the 'Internet filter' have any reality (at least as yet) and there is really nothing to say about either of those topics other than to note them as bad political 'stunts' that, on the one hand (the filter) is demonstrably ridiculous and on the other hand (the 'NBN2') is demonstrably non-viable. As neither concepts can be made to work in my opinion (but by all means assume that as stated by the current government they actually could) you have a de facto reason to report briefly on the topic by stating the known facts and then waiting for something to happen. There is really nothing to say about the amount of money being spent on either stunt. If governments wasting money on useless projects the nonsense of funding the 100s of billions of dollars building 12 "Australian designed" submarines or 24 or whatever the number is F22s or.......but the list is endless. All governments uselessly waste tax payers money to enrich themselves and always have done - it's called democracy where the privileged few get rich by ensuring the overwhelming majority remain poorer than they otherwise would. It might well be true that this scenario is true for all Australian general media, or even for all 'specialised media' - I wouldn't know because, apart from a few pages of the Financial Review and a sporadic viewing of the on line Business section of the SMH - I seldom if ever read/listen to/watch Australian media and haven't done for several decades - the triviality and inaccuracy coupled with more often than not juvenile reporting associated with those forms of entertainment bores me rigid. It isn't true for the US and EU communications media that I use to provide information on current and new communications technology and its implementations. Perhaps the multiplicity of Australian communications industry 'outlets' needs to be consolidated in to 2 or 3 competent 'agencies' and a recognition by such agencies that there just isn't any point in endlessly speculating on issues that haven't changed since yesterday's speculations? Communications technologies just don't change daily. PS: Our April recurrent billing run showed that, despite the problems in the ADSL2 market places, Exetel's growth hasn't really slowed with a 22% increase in recurrent revenue over April 2009 with a very strong growth in VoIP, mobile and SMS revenues. Our non-recurrent revenue (activation fees and other one off charges) in March was also up 28% compared to 2009. A pleasing start to the month.
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