John Linton
We continue to work on the Australian business plan for next financial year - frighteningly only barely a month away now. We are pursuing an even more conservative path than we did at this time twelve months ago with more uncertainty now than there was then. One major change to the planning is that for the first time since we began the Exetel business is that, overall, we are planning for less ADSL customers month by month going forward whereas in every month for the past six and a half years of Exetel's existence we have always planned, and succeeded in achieving, month on month growth for that service which has been by far the largest revenue contributor to our company.
The other major change is that we will cease/have already ceased to cater for the high end down loaders in the ADSL marketplaces and reduce our 'ambitions' from offering more for less to every ADSL user to offering more for less to the marketplaces that download less than 150 gb per month. When we look at our ADSL customer base we actually have less than 2,000 customers who download more than 150 gb per month with over 90% of our user base downloading less than 30 gb. It has become ever clearer that in attempting to satisfy that higher end user we have wasted a huge (for us) amount of money. If we can deal with that waste then we would be able to solve our current issues and have a much easier 'life'.
So we continue to refine the various assumptions and predictions and attempt to correct the more obvious of our mistakes. In simple terms our plan is to not provide services to end users who cost us money and use that money to provide better/lower cost services to our other ADSL customers without the need to make lower downloading users pay for the downloads of money losing users. The continuing, and escalating, growth of our corporate business (a sector where we can continue to offer services at the lowest pricing in Australia but make a solid 30% plus net margin) will more than replace the 'lost' revenue from a decrease in ADSL revenues and make a very big difference to monthly 'profit' results - at least according to the draft plan.
We are also closer to finalising our revised wireless offerings for FY2011. We will 'bundle' a wireless service withe the Optus ADSL2 naked and included wire line telephone services at no monthly cost except usage from either June or July 1st. This service will be aimed at people who want a 'mobile' data service that is not used every month or for very heavy downloading. No monthly use - no charge and at 2 cents per megabyte gives a user who averages 500 mb of casual mobile use a sound wireless service for $A10.00 a month in usage charges - and an immediate back up should their ADSL service ever become unavailable at an awkward time. It still needs some work but we don't expect to make any more changes to the structure.
We have made no provision for any fibre services in the next year plan. Although we have been surprised at the 'take up' of fibre services in the Point Cook trial there is no certainty that Telstra will provide a wholesale fibre service moving forward and the fibred areas provided by Opticomm are limited and with 'established' competition so we have no basis on which to make any sort of forecast at this time. There is even less certainty as to what the 'NBN2' fibred areas may provide and with the current difficulties of dealing with NBNCo on even the most mundane of issues it isn't possible to forecast any sort of contribution from that possible area of operation.You have to speculate on what would happen if fibre services were widely available in the capital cities. It would instantly 'wipe out' the outrageously over priced SHDSL services in use by over 50 - 100,000 small/medium businesses in those areas.
The main area of the plan that we are uncertain about is VoIP. We have a constantly increasing number of VoIP users both residential and small business and continue to receive a lot of interest from much bigger businesses. We are in the process of deciding whether to limit our business VoIP offerings to 'hosted VoIP' rather than installing hardware at customer premises and if we do go that way just what we will implement. It's a very big decision and one that needs more knowledge than I possess to be made correctly. We have to solve that dilemma 'real soon now'.
It's my youngest son's graduation ceremony this afternoon which will be a very happy occasion and, being the last of five, a more meaningful event in some ways than the four previous graduations. A sobering thought.
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