John Linton's Personal Musings

John Linton

We drove to the heart of the Derbyshire Dales today and head off to the wilder wilderness of the upper peaks tomorrow. We visited a 'hidden away' stone circle called the nine ladies which was relatively close to our hotel but incredibly difficult to find - I actually don't know how anyone without the patience and determination we displayed would ever find it. However it was the smallest of the circles I have ever seen but pristinely beautiful in an amazing setting. Annette says that I have a strange fascination with stone circles which I suppose is true as over the years I have dragged her to some of the remoter areas of the British Isles to see them.

I really love the dales - almost as much as the West Country and am always so happy to visit this beautiful place again. The views are staggeringly beautiful round every twist and turn in the rods (which believe me have an amazing amount of twists and turns in them). The always changing mixture of rugged tors, moorland, small grey stoned villages and the variable colours of the farmland (bright yellow, yellow gold, light green, dark green and russet brown make a spectacular display for even my hardened mind and I really love spending time here way deep in the remoter parts of the tors.

So, back to another comfortable lounge bar (as wifi doesn't work in our room) with an 18 year old Macallan (which the bar man told me had won best single malt in the world in 2004 and again in 2008 at the "whisky Olympics". It is still amazingly hot in the UK and no rain so a refreshing draft when returning from a hard day slogging up hill and down dale is appreciated. Annette finished her Pimms (tastes completely different in England she assures me) and went to watch the tennis with the barman reminding her there was no need to watch the cricket.

I have been reading the Australian media with the decreasing interest that a second week of a holiday always brings. I keep trying to find some way of providing wireless broadband services to some segments of the residential market places that are not well served by the saturation advertising of Telstra, Optus and their resellers but continue to fail to find anything that seems remotely sensible. I had another hour or so of looking through the UK offers but drew no inspiration from what I read in the various web sites and a couple of magazines I picked up yesterday.

The option for new ADSL customers to add a wireless service has been relatively successful so far with some many hundreds of applications selecting this option over the three weeks it has been offered with the increase from the first week to the third week showing a doubling of interest. Depending on what happens over the coming weeks this should prove to be a sensible way of increasing the number of wireless broadband sign ups to an additional 1,000 or so per month for residential new ADSL users.  Business sign ups are beginning to show some good signs of increasing growth with some very, very large corporate users showing more than casual interest in the offerings we can provide to corporate users. But we need something much more than those two promising initiatives. What that could be continues to escape me.

One of the things sent to me from the PC press by Steve was this:

http://www.pcworld.idg.com.au/article/351342/10_50_unbundled_adsl2_plans_compared/

I found it ironic that after we had been 'accused' by so many different types of people about our "destruction of the value we offered" that such a magazine has rated our ADSL2 plans so highly. Of course our ADSL1 plans (which TPG don't offer) are more appealing than the ADSL2 plans. Personally, I don't see how this magazine could reach the conclusions that it did but it probably is representative of how one portion of the market evaluates service offerings. I have seen a continuing upward trend in new/churn ADSL applications since we changed our focus which is heartening and articles such as this will only help that process.

I haven't seen the final figures but it seems likely that Exetel's customers will send over 1,000,000 SMS over DSL in June which, while meaningless in any wider context, is a vindication of our decision to write more of our own software 'features' to integrate in to our ADSL and wireless broadband offerings. Our target by the end of FY2011 is to be sending over 5,000,000 SMS per month which while it looks challenging is not as aggressive as it sounds. We now have a hardware and software 'platform' that is highly reliable and a programming capability that can continue to enhance this service at end user prices that none of our competitors seem to be able to get close to.

This hotel has a restaurant that has four AA rosettes and a Michelin star so I am going to stop now and go and build up an appetite.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

We had a pleasant day spending the morning talking ourselves in to an operational RAF base to visit the memorial to Annette's father's WWII  Lancaster squadron (463) which took some doing but all turned out well with a very nice female Flight/Lt escorting us 'through the wire' and with whom we had a nice chat. She flies Nimrods and has just returned from active duty in Afghanistan and is a tiny blonde haired woman in her late 20s/early 30s of very obvious authority and bearing. After doing our duty we drove to another, this time unused, air base and looked at an almost complete range of British military aircraft from 1948 to 2000. We completed our day by visiting Belvoir Castle owned by the umpteenth Duke of Rutland and a Welsh farmer's daughter (and let me hasten to add there is absolutely nothing wrong with Welsh farmer's daughters per se) who now glories in styling herself the Duchess of Rutland and refers to the 1,000 years of continuous owners of the castle as "my family". The English do the class system better than any other people in the world.

I thought about the recent Telstra decision to enter into a heads of agreement with NBNCo while I was flicking through the Australian media a few minutes ago and found this:

http://www.theaustralian.com.au/politics/opinion/well-pay-dearly-for-this-nbn-folly/story-e6frgd0x-1225884951797

whose writer is either plagiarising my own comments made over the past twelve months or is setting his own out so much more succinctly and far more cogently argued than I have ever been able to do as I agree with them completely. The real problem is that with no Telstra there is, yet again in Australia, no competition and therefore no pressure of any sort on keeping pricing for base residential communication facilities low. Not only is this in the shorter term but, if you believe anything the current Labor government says after the last 30 months of lies and flip flops, then the end result is to sell the NBNCo to a 'private investor' and just how is that going to benefit any residential end user? Beats me.

The other major fear as constantly articulated by Optus' CEO to anyone who will listen is what intrinsic discounts did Telstra get given in return for accepting the $A11 billion pay off? Don't try and tell me "none" because even common sense would say that couldn't be the case. So my concerns (when I take the time to consider them at the moment) is just what advantage Telstra will have over every other provider that buys NBNCo services? While it doesn't concern me that much I am sure it will concern Optus quite considerably and they are in a much better position to 'fight Exetel''s corner' than anyone else and I am more than happy for that to happen. What other comms companies now do will be interesting to watch over the coming eighteen months.

The ABS figures will be interesting to see when they are available in late August as they will give a guide to the trends for ADSL and wireless broadband. It will also be interesting to see what Telstra's and Optus' LTE imminent trials show in terms of new speeds for wireless broadband and more importantly when LTE speeds will become available in Australia. My tests so far on this trip seem to show that actual end user speeds in mainly rural England have more than doubled since last year and I will be interested to see what speeds are achievable in central London when we eventually get there. From what I can see and interpret from the various UK advertisements prices are one third lower than last year and modems are effectively free for any length contract. So it seems that wireless broadband continues to make inroads in to the ADSL market in the UK based on the pricing of both services and the even 'shriller' ads for ADSL that appear in the papers and magazines.

A very pleasant day - Annette's birthday - and I'm looking forward to a very pleasant dinner with a sensational bottle of wine that costs 'almost nothing' in this hotel compared to any Sydney restaurant that might offer it - one fifth of the price at a minimum.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

.....but I really appreciated that there were almost no cars on the roads we traveled over today - and after the England vs Germany game kicked off at 3 pm local time there were absolutely none.

We drove from North West Norfolk to Rutland Water today to visit two bird sanctuaries where, among other things, we were fortunate enough to see a very rare sight - three chicks and both adults of an Osprey family - one of only three currently reported in England.It was a thrilling sight and a great tribute to all the people and financial supporters who have made it possible. When we left the two sanctuaries we drove on roads that seemed almost eerily empty but made for a quick and painless trip to tonight's hotel deep in the middle shires of England which provide glorious vistas from almost every part of the road trip. It is, truly, a green and pleasant land - outside the cities.

I answered my emails and read through the Australian media while Annette watched the second half of the soccer and its aftermath (the referee was biased and blind and England were rubbish seemed to be the consensus) and consumed a very welcome double gin and tonic in a long glass (I haven't mentioned it but each of the six days we have been here has been very hot - up to 30 degrees today and at least one other day since we landed). I didn't find anything of any particular interest in any sector of the press I read but that might be due to my 'unwinding' from the pressures of working days to the simple pleasures of holidays. I did take the opportunity of having internet access in our room to look at our June results with a few days to go. Generally they are good and we have already made all of the key financial targets 9except profit) earlier in the month.

One of the really 'good' results of the changes we had to make to our ADSL plan emphasis is being shown in the IP and back haul graphs with the usage continuing to fall very slowly as the people who move away from Exetel are, on average, the very high down loaders (200 gb plus in off peak) while the new customers that (more) than replace them continue to be from a lower down loading demographic. The net result is the anticipated fall in actual IP and back haul usage while the net number of customers slightly increases. It was a difficult set of decisions to be made but it may turn out as we had hoped over the coming two months.

Another good indicator is the continuing growth in the number of SMS and Faxes being sent and the more rapid growth of VoIP on both ADSL and Wireless Broadband - all four of these services have hit record highs already in June with a few days still to go. All of these services represent important aspects of Exetel's FY2010 market developments and are even more important in the corporate offerings for the coming months. So no surprises as the final numbers for FY2010 become clearer which is good and the year will end up with pretty solid growth across all 'product' areas and enormous growth in corporate data services.

I will be interested to see what happens once the Federal Government 'turns on' the first test phase of the 'NBN2' in Tasmania next month - I will be sorry that I'm not in Australia to track what happens. It is going to be an interesting period for all residential data communications providers in how they handle the roll out of fibre services - depending on the speed and ubiquity of whatever transpires. It is going to be interesting in many ways not the least being how Telstra deals with its large fibre investments and how it 'tariff's' any resale of NBNCo services - I would dearly love to have advanced notice of how that will play out.

Oh well.....I feel a large single malt requesting my presence......

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

.......that ducks are smarter and better organised than human beings?

We had a very pleasant day doing not very much. We spent the morning at the bird sanctuary that is only a few minutes walk from our hotel and saw an avocet up close for the first time as well as a marsh harrier that was extinct in the UK for over a hundred years until a breeding pair was sighted in 1984. The afternoon we spent visiting the Queen's house at Sandringham and wandering around the grounds - something Annette finds an indispensible part of any time spent in rural England. So, amazingly, the day just disappeared and we are now back at the hotel - Annette watching Nadal at Wimbledon and me catching up with events in Australia in the bar - not because of my preference -  it seems that the internet wifi only works here.

I have read through the Australian Saturday media - a fairly mundane task with little new added on any topic other than how Australia can be proud of its performance at the world cup - an interesting view of how the team played and how it generally conducted itself (based on press reports only) - I guess it sums up the general veracity of what is published in the Australian media.....where do those hacks come from to write such rubbish? Again, I didn't bother to read the political columns - to me they would be like reading the sporting columns.

I started to put together a list of things that Exetel needed to accomplish to justify its continuing existence as part of the long term job goals and 'learning' for some of the company's key people while we were scanning the skies for incoming avia of interest in one of the 'hides' this morning having to keep quiet or risk offending the more dedicated 'twitchers' either side of us who seem to demand funereal silence as the only possible atmosphere in which waiting for new arrivals at the water in front of the hide can be conducted. I didn't get very far along that route but it did indicate that there was more to do than I had thought in terms of 'people development'. I used to be quite a fan of structured career development and formal in house education; almost certainly because of what I experienced in my early years working for multi-nationals. Over the last decade or so I have become quite uncertain about the value (to either party) of such processes.

So I made a list, when I returned to the hotel, for two people in Exetel that would be a series of targets (in terms of knowledge and skills) that they would need to achieve to free them from my 'interference' in their day to day and, more importantly, half year to half year job responsibilities. I didn't get very far beyond a lot of meaningless 'motherhood' nonsenses that would make me laugh out loud at their inanity if anyone else had suggested such twaddle as I wrote down. It's a major problem for me, for Exetel's shareholders and for Exetel's employees that I (one of the main determiners of individual career paths within our small company) is so lost in determining sensible 'paths' from here to there - let alone time frames and with absolutely no idea how to define the actual skills and knowledge that's required.

How do you actually teach/define a suitable process that provides any individual with the required abilities to become a "manager" as the least level required but then leading on to the required forward thinking and analytical abilities and processes that allow them in increase the scope of their activities and benefit themselves personally as well as providing the necessary growth required by their employer? The reason I started on this 'tack' was having been "shushed" by a fierce looking female at one of the hides this morning my mind drifted to this subject while watching a group of ducks (two parents and 6 ducklings) slowly swimming in single file (one adult at the front and one adult at the back) with both adults moving other birds in their path or intersecting their part out of the way with whatever aggression such delicate creatures possess and the 'rear' adult chivvying the ducklings that fell behind or tried to stray back in line. Who taught them to protect their offspring in such a truly sensible manner?

Was there a 'parenting for first time hatcher's classroom hidden in the reed beds? Obviously not. But those two adult ducks were doing an excellent job of teaching and protecting their young with only what their genetic material provided to them. Thus my mind started to think about what human beings needed in terms of vocational training and why we didn't have what every other species on the planet has - an intimate and intricate understanding of exactly what to do from birth until death. Then I thought that obviously our species has exactly the same genetic material and we also know, without being taught, how to conduct ourselves at every stage of our lives - we just choose not to.

No education or career direction discussions should be necessary for any human being who wants to have a career - they just need to follow the guidance within themselves and select from the multiplicity of vocational training resources available to them.

I wonder if it is that simple?

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

....a few extra miles driving never hurt anyone.

We got up very early this morning and skipped breakfast (unfair to accept the offer of the lovely lady who offered to get up at 5.30 am to prepare it) having paid our bill the previous night, and
back tracked to Southwold to pick up the lap top charger I had so
carelessly left in our room thus adding 120 unnecessary miles to our
day's scheduled driving - a suitable punishment for an idiot - pity his
companion had to share the punishment.

However the day was very pleasant
and we got the 'punishment' out of the way by 10 am which is about the
usual time we would have set off - so it didn't affect the day  which
was spent visiting a hotel at Blakeney Point we had stayed at during our
honeymoon, looking over one of the largest of the many unusually stoned
churches that abound in this part of England, having one of those
legendary lunches at one of those legendary remote village pubs (half a
dozen huge local oysters (from 'over the back yard fence) and a dressed
local crab (from 300 meters over the front door of the pub) and
finishing the after lunch period off by visiting one the many huge
country houses that beggar the imagination as to how such wealth could
be accumulated to build them. We checked in to our planned
destination hotel pretty much at the time we had planned and, apart from
being sick of driving, in good shape and good humour.

I skip read the Australian financial and communications industry press but didn't see anything of much interest. I co uldn't be bothered with the 'political' press as nothing sensible is going to be said until Gillard actually begins the job of shifting all of the blame for the past onto the lunatic Rudd and attempts to exculpate herself from being associated with the fiasco of the latest Labor government - if that's an appropriate word for the usual Labor Punch and Judy show they mistakenly believe is a suitable imitation of running a small country like Australia.

Two of the emails I dealt with were more interesting, at least conceptually, as follow ups to some vague concepts of Exetel 'merging' with smaller companies than we are on some imaginative bases. I am not yet 'unwound enough' to seriously consider the implications of such proposals but as the tensions caused by the demands of contributing to the day to day operation of a company of Exetel's size continue to fade I will be able to look at such scenarios in a more sensible way. I don't know how many smallish communication companies have been absorbed by larger companies in Australia since Exetel began to provide services in January 2004 but I think, given the time and inclination, I could still remember the names of close to 30 and the ABS stats indicate that there have been close to 500 if you can interpret them correctly (which I can't).

I think that Exetel has steadily grown (in terms of revenue and customers) over the past 78 months and is no longer a 'tiny' data communications provider and of the 500 or so carriers, providers, integrators and management companies that now exist in the Australian market Exetel continually improves its 'ranking' and its 'clout' if the increase in the semi-hysterical "anti Exetel" slagging by competitors in the business data link markets in which we operate is any guide. Whether this slow, but continued' move up the size/business volume rankings is a relevant thing has always been immaterial to me - except in the general way that you are pleased you haven't closed down or been swallowed up by some other company because you no longer have the ability to believe in what you are doing and want to keep on doing it.

For no particular reason I never find myself admiring anything about the communication companies that operate in Australia - nor, let me quickly add, do I admire much about our own business - I have always, correctly, ascribed our many failures as an inevitability of a start up business's problems in simply surviving for the first few years and, if it does survive, the problems of moving from a business of a certain size that can be run by its key staff (and working owners) to one that is too big for that to continue to be the case. I have no idea how long it will take Exetel to move from 'hands on owner managed' to the next iteration of management but I'm pretty sure that Exetel (as it stands) couldn't be managed by an 'outsider' and I certainly couldn't stay with the business and cede any level of control to an 'outsider' - I certainly couldn't "report" to anyone likely to be found in a smaller company that Exetel (or larger for that matter).....but then, when I think about it, I never could.

So it will be mildly interesting to see if there is some 'model' that addresses the downside issues that I can see let alone the downside issues any merger 'partner' may be seeing.

My goodness - is that the time? I'm late for the first single malt of the day sitting here writing this nonsense.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

...........but I always did tell you so.....that before the last federal election and ever since a bunch of electoral lunatics elected him - that Krudd would prove to be very worst prime minister a bunch of dolts (those who voted for him) ever inflicted on this country - even his own caucus eventually had to sack him in a desperate bid to stave off losing the next election. So my prediction that he would be a one term wonder turns out to be true with Krudd setting every possible record in inept government - exceeding Whitlam in his amateurish and uncaring stupidity.

While he was trying to justify his presence as prime minister he simply didn't "get it" - 32 MAJOR promises/commitments broken or simply ignored - one a month in his ridiculous imposture as a head of a country was why EVERY Australian - even those in 'power' along side him realised that he was simply a posturing egoist without a clue how to manage the finances and direction of a country. He has set a new record, unlikely ever to be beaten, as an elected prime minister who lasted the shortest possible time in office - he even beat that Whitlam record.

http://www.smh.com.au/opinion/politics/dark-clouds-that-spelt-doom-for-a-prime-minister-20100625-z9lf.html

"Whitlam, Hawke, Keating, Krudd

Everyone Of Them A Dud."

Now we have a prime minister who, despite the desperate attempts of her elocution teachers still, still lives up to her appellation of "The Screech Owl" and whose constant renditions of 'government' as 'gubmant' and similar murdered pronunciations who American school children couldn't understand a word she said and didn't believe it when they were told she was speaking English. So when I saw the news on BBC1 I didn't know whether to be pleased that worst lying sleazebag ever to enter politics was gone or that the most doctrinaire left wing loony of the remaining 'candidates' who agreed with everything Krudd ever said and did (and was full square involved in all of those stupid decisions) was replacing him.

Oh well - as I have managed to lose the recharger for my laptop I have no more time left to use the internet so I will conclude on this note:

As the federal Labor party has concluded that Krudd was a useless dilettante with ego the size on a medium sized planet who broke EVERY promise and commitment he ever made - will those people who voted Labor at the last election now realise how stupid these experiments with socialism in this country really are. If they can't bring themselves to believe that perhaps they could see what 12 years of socialist government in the UK has done to the country and what price the British electorate is now paying for all of those atrocious decisions over that period.

 If any doubt about La Guillotine being a left wing hard liner:

http://online.wsj.com/article/SB10001424052748704911704575326023964421524.html

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

We had a second enjoyable day of our holiday which was made better by sleeping for ten hours to dispel most of the jet lag effects. We spent the morning at one of the RSPB's sanctuaries (1,500 acres of sale marsh and reed beds) and saw a wide range of water birds - some of them the first time I have seen them (Avocets and Spoonbills) as well as some familiar species and other unknown species I didn't recognise. The whole set up was very impressive and I am continually amazed at how much dedication (and how much money) is deluged into protecting the flora, fora and avia of England -  if only we could do 100th as much in Australia. We didn't derive very far today (the sanctuary was only ten miles or so from our hotel but the countryside, even in a county as featureless as Suffolk (almost as flat as Norfolk) is very pretty and the small towns are full of very different 'character'.

We also 'explored the small town we are staying in for a couple of days and had a fish and chip lunch at their tiny
'port' facilities before watching England play Slovenia in their final world cup match. We had planned to watch the game in one of the many pubs close to our hotel but having stuck our head in to three we decided we give up the 'atmosphere' and watch the game in our hotel room. I'm all for fierce support for your local sporting side but life/or death 'enthusiasm' fueled with alcohol was a little too 'atmospheric' for us. One thing I did notice that Martin Tyler (a peerless commentator of soccer games) made a stark contrast to Australian sporting commentators at international events - there was another side on the park and his anxiety for an English victory was restrained and not inappropriate. Apparently it isn't vital to be a jingoistic dope to provide a useful commentary on an international sporting event in which the country of your birth is participating.

We will leave Suffolk to go to Norfolk for three days tomorrow to visit two other bird sanctuaries and to take in some of the local 'historical' sites. In the mean time we have been doing all the other vital things a holiday offers the opportunity to do - absolutely nothing related to work.....with the exception of making time twice a day to deal with email and call the 'children' to assure them of our continuing existence. Annette also calls Exetel's Financial Controller once a day "just because". As with most jetlagged people we eat at peculiar times - far outside any sensible restaurants catering hours - which gives a great excuse to buy all sorts of interesting things from the 'home made' sections of the local provenders as well as buckets of English strawberries and raspberries that are picked from the plant fresh and have had a zero association with refrigeration - they taste out of this world and have no relation to what we are able to buy in Sydney.

Apart from a couple of half pints of the local best bitter jet lag has made it both unwise and impractical (and because of driving during the day impossible) to drink any alcohol so the plethora of single malts in the hotel's well stocked bar have remained unopened as far as I can detect. However we will be staying at a hotel over the weekend that is renowned for its wine
cellar and its owners even better know love of single malts of the most esoteric kind and I'm sure jet lag will be a thing of the past by then. Fortunately the hotel we are currently staying in has an easily refusable wine list so jet lag has some advantage in such circumstances.

As usual we find the English very pleasant and friendly and helpful beyond the call of duty whenever we have occasion to ask for help, directions or any other sort of information. We find the help offered not always as useful as we would hope but it is always delivered in the most courteous way and in absolutely complete detail. Without wishing to 'tar' myself as a 'racist' it is also noticeable that the small towns of Sussex we have visited remain totally 'English' in the racial, but hopefully not 'racist' sense of that word. It is a stark contrast to Sydney and, based on visits over the past few year, to London. I am not saying that is either good or bad but it is noticeable.

Perspective? Perhaps something else.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

........demonstrating the inadequate grasps of Australia's communications infrastructures and currently operate, how they might operate and, of course, why they have never operated very well at all in the 100 or so years of 'federated control'. You may have gathered that I have tried to bring myself up to date with the various 'public figure's' reactions to that announcement by the federal government that they had signed a deal with Telstra that removes two of the more obvious road blocks to the widely predicted doomed to fail 'NBN2'. I did do that while Annette better occupied her time watching Nadal play his opening Wimbledon match - a perhaps more predictable end score than has proven possible for the 'NBN2' so far.

It appears to me that for all the thousands of column inches since the Sunday 'announcement' not a single commentator/expert/whatever has made a single few words of pronouncement/analysis/prediction that demonstrates they have the slightest idea of what the ongoing political processes of turning over the base infrastructure used to deliver residential data services actually means in any way whatsoever. I really don't care, either personally or as part of the management of Exetel, what happens to this unedifying three ring circus called  "the communications debate" - the people allegedly participating in it demonstrate so little knowledge or understanding the end result is an inevitable fiasco. It simply can't work and the drover's dog knows more about Australia's current and future needs for communications infrastructures than the people who injected themselves in the "national debate". If you think I'm wrong in that assessment please check the background, knowledge and credentials of anyone who makes a statement that appears in print.

Every single thing I have read from the 80 or so people quoted in the Australian media has been hopelessly wrong - particularly the prime minister and the minister for the tectonic society whose utterances are so ludicrous it sounds like they are lampooning themselves.

Two things in commerce, for the past 4,500 years remain immutable:

 1) A commercial monopoly in the provision of any product or service ensures that the end user pays the highest possible price for it

 2) A government monopoly in the provision of any product or service ensures that the end user pays the highest possible price for it - and that it is of the lowest possible quality.

 I thought that was the reason the Labor Party first insisted that Telecom Australia should be privatised?......and that was over twenty years ago.

Again, if you think I'm incorrect in those assumptions please point out where 1) and 2) above were not the case since 2,500 BCE.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

......the haphazard nature of the Changi internet connection - there will be no blog today. It's taken me 40 minutes of the likely 50 minutes to get a stable connection.

A combination of it being 12 midnight/lounge internet unavailability and total exhaustion renders it impossible for me to write even as quasi-coherently as I  usually summon up the energy to do. I guess it's a sign I really have worked myself too hard this year but with another 14 hour flight in a few minutes/technical
troubles/a five hour derive at the other end and the unremitting slog of the last year I just can't force my mind to work.

I guess you'll just have to do without my pearls of wisdom today unless by some miracle I can get internet access in 19 - 20 hours time.....

....which turned out to be possible. We had a trouble free flight and no issues at Heathrow or picking up the car at Avis. The only problem was with the satnav that decided that the best way to the Suffolk coast included going via the M1 so as soon as we switched that  off travel times and distances returned to normal. I think satnav is a really useful tool in large cities when you are going to addresses for the first time but even in the UK which I visit rarely a stand A to Z is more than enough for me to get anywhere in the UK in the most efficient time and satnav just is not a good idea for me.

So we visited Sutton Hoo which Annette has often wanted to do in the past (usually when we are in the North of Scotland or deep in the Devon Moors or on some Welsh Mountain that doesn't seem to be on the A to Z - this time we drove straight (almost straight) there only stopping for breakfast on the way. Its not as impressive as you tend to think it is but the story is very well t0ld in their museum and the actual jewelery on display is really impressive. So we spent an hour or so there and then visited a couple of fishing villages before finding our hotel - very close to the 'beach front' in Southwold and have now unpacked and showered and had a couple of glasses of the local (next door) brewery's beers and will try and stay awake to enjoy dinner at the Swan's restaurant which is highly
recommended for local food and careful preparation.

So the usual trip across the world involving 22 hours flying followed immediately by 6 hours driving has been successfully navigated we are both looking forward to a relaxing but stimulating time.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

........though it's not yet a 'done deal'.

http://www.smh.com.au/business/telstra-signs-transfer-deal-20100620-yosf.html

As it is one of only two possible outcomes it can't be called a surprise but although Telstra have apparently obtained their $11 billion asking price rather than NBNCo's $8 billion it was hard for me to see how this deal is beneficial to Telstra (the monopolist) at any price. But of course the bare bones announcement of a 'deal' subject to various approvals does not begin to disclose what 'special accommodations' have been arranged that do in fact perpetuate Telstra's infrastructure monopolies. It's also not spelled out what Telstra 'is allowed' to do in terms of offering its own fibre services as it seems the word "copper" was very precisely used in the brief announcement. It's all beyond  me to make any further comment.

Exetel will begin offering fibre services in the Opticomm estates and the three Tasmanian 'test towns' by the end of this week (though without me being here that may not happen as scheduled) and our experiences with the fibre trials in Point Cook have been interesting so far. We will learn a lot more over the coming months about infrastructure requirements as the different 'carriers' networks are tested by more and more resellers. It's already apparent that both NBN and Opticomm have a very long way to go to match the sorts of B2B and general support and provisioning facilities we, as a wholesale buyer for several years take for granted from Telstra and neither Opticomm nor NBNCo (nor Telstra) are even contemplating the sort of fault rectification services that Optus provide to its wholesale customers.

Whether the NBNCo survives a change of government, which must now be considered to be more of a possibility than it once was if still unlikely, is still uncertain for all the right reasons (and many wrong reasons) though there is now the fascinating scenario of who would buy the NBNCo assets from the government if a new government decided to scrap the 'NBN2'? How much money would be spent by the time any new government was in a position to make such a decision that might be useful to a prospective buyer of the distressed assets?

http://www.itwire.com/it-policy-news/regulation/39866-coalition-to-halt-nbn-telstra-deal-smith

The other very interesting question raised by the Telstra decision is of course - what will they do with the $A11 billion to be paid in undisclosed chunks over an undisclosed time frame? Telstra has always been flush with unallocated cash (courtesy of its monopoly pricing) so how can it use this 'lump sum' injection most effectively? (assuming it isn't going to return most/all of it to its shareholders). It could use some of it to more rapidly introduce LTE and blast apart the mobile data market. It, assuming the conditions of its pending agreement don't prohibit it, could use it to beef up its already considerable fibre infrastructures. It certainly will 'run down' its future expenditures on the maintenance of the current PSTN freeing up even more money even after the PSTN revenues begin to fall faster.

So, in a way, less is now certain about the future than before this 'decision' was announced in almost every respect to every interested party other than Telstra. Not that it matters that much unless you have a large investment in an obsolete technology as there is unlikely to be any difference in buying services from a privately owned monopoly or revert to a public owned monopoly that was sold off to the privately owed monopoly less than 20 years ago because the publicly owned monopoly was grossly inefficient - irony anyone? Perhaps the NBNCo should be renamed 'Telecom Australia' just to make the point clearer to those people who haven't been around long enough to appreciate the bathos rather than the irony of this announcement?

I leave for the airport in a few hours and will not worry about the future for a few weeks.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

.......to not plan for greater per customer connection (and IP) usage you read something like this:

http://online.wsj.com/article/SB10001424052748704289504575313082104914118.html?mod=WSJ_Tech_LEFTTopNews

and particularly this comment:

"Now, with Internet traffic growing at a compounded annual rate of 46%
and expected to quadruple from 2007 to 2011, according to a Cisco
Systems Inc. study, analysts say fiber networks that lay in disuse for
years are gradually being put into operation. As a result, they expect a
round of consolidation in the fiber industry."

If you look at the annual graph of Exetel's customer usage of IP

http://mrtg.exetel.com.au/combined/total-supplier-bandwidth.html

you will see that average usage has increased by over 80% over the past year and around 50% in the past six months.

Part of this has been an increase in actual customer numbers but the overwhelming reason is greater average data download use per customer. This rapid increase in average customer usage has been partially offset by the almost equally rapid decline in IP pricing over the same period (almost certainly a factor in making the overall increase possible). However the carriers from whom Exetel buys connectivity from the Telstra exchange to our PoPs have only reduced those back haul charges much more slowly and in Telstra's case; not at all. Right now it costs more than double to deliver a byte of data from our PoPs to an end customer than it does to deliver a byte of data from the other side of the world to our PoPs. 

Clearly a challenge for companies like Exetel over the coming year and one we really need to solve as it is a key contributor to the overall cost of delivering an ADSL service and, like the port cost, has been the major reason for Exetel's inability to more significantly improve end user costs of ADSL services without losing even more money than we have done so far. Unlike support, administration, provisioning and accounting costs which a combination of automation and low costs of operating in Sri Lanka which we have done an excellent job of reducing to lower than any competitors we have never been able to makes similar reductions in our major supplier's charges and until we have the sort of financial resources to buy out a 'Powertel' we never will - and the likelihood of us ever acquiring such financial resources are zero.......

.......though.....one of the things to be thought about while we are away is just how we might structure Exetel financially in the future. Over the years we have had various offers from a range of organisations (overseas and local - sensible and ridiculous) to buy all or parts of Exetel or to 'merge' with Exetel or some version of those constructions. We have never pursued any of them at all seriously for a variety of reasons not least of which was we wanted, and still want, to try and meet our original objectives of creating the Exetel business - which we are still a long way from achieving and, personally, I can't see us achieving them for at least another two years...and almost certainly not within that time frame.

Having said that....there are one or two, perhaps even three, possibilities (and I stress the use of the word "possibilities") that have emerged over the past few months that, if they ever became real, would provide more opportunities than we have available to us now. when you are a long way from Australia and your mind begins to slow down you do think differently and begin to assess all sorts of things from a different perspective. Perhaps 'merging' Exetel with another company would give us new markets and a new financial status that would make it easier to accomplish our current plans. It might certainly give us more financial abilities than the remainder of our family assets not already committed to Exetel are able to provide.....though it seems to me to be very unlikely that we will find people who believe a commercial business should be run to provide the lowest possible cost services to its customers and that 30% of any profits it may make should be given to other people to protect Australia's endangered wild life.

Perhaps lightening will strike (in the thinking sense) and our brief respite from the day to day demands of Exetel will provide fresher inspiration.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

PS: A watershed announcement:

http://www.theage.com.au/business/telstra-signs-transfer-deal-20100620-yosf.html

John Linton

.....which served to accentuate how exhausting business life can be on occasions.

We had a low key celebratory cocktail party for all Sydney based personnel last night at a local hotel to acknowledge the ending of the current financial year and to look forward to the coming 12 months. I was so bone weary tired that I left after I had made a brief 'speech' acknowledging the achievements for FY2010 (including meeting all the financial targets except profit which, at least to date, we have placed little emphasis on) and spelling out the major changes for FY2011 and the areas we need to concentrate on to meet our next year's objectives. I think the hit of the hour I spent there was the belly dancer with the two meter python though the rapid consumption of alcohol had raised the noise level to deafening proportions by the time Annette and I left.

As always when I see all of our people together in a smallish space I am 'terrified' at how young they are to be responsible for the tasks they perform and continue to be amazed at the results they achieve. I am also very grateful that we still have so many of the people who joined us in the first year of our existence and that more people each six months pass the magic 'five years with Exetel' mark - it gives such a very young group of people a stability that can only come from employment longevity.

Before the cocktail party, Steve and I had a very nice and very enjoyable lunch with one of our major providers and exchanged some versions of our different experiences over the past year. They, like most people I have talked with (suppliers, customers, acquaintances, bank managers) over the past few months have not viewed FY2010 with anything but being glad it's over and hoping for better times in the new financial year. No-one seems to have done particularly, if at all, well over the last six months so it will be interesting to see what the final results are when the reporting season rolls round.

I had my final input in to the fibre plans and how we will now proceed to market them in the Opticomm 'estates' and the NBNCo 'trial' locations in Tasmania. We will 'activate' both the Tasmanian and Opticomm order forms next week and will start the "marketing" program a few days later. I am sorry that I will miss sharing this kick off of a new type of service as I would be really interested in seeing how the customers in those locations react to the various different 'selling efforts' of iPrimus, Internode and iiNet and the three other ISPs 'rumoured' to be signing up for the NBNCo trial.....and what happens when they find out the results of their initial price offerings. It would have been fun to have been here for that really interesting time.

There were a myriad of other tasks that filled in all the available hours in the last week but they are not worthy of comment other than it seems more difficult than at any time in my working life to actually get through a day's work - clearly a sign of many things I need to address in the immediate future but the immediate future will now be put on hold for a week or so. We still have given no thought as to where we might go when we get off the plane in four day's time and we must put some thought in to that over the next two days - but there remains an awful lot of 'tidying up' to do so I am not sure whether we will actually get around to it.

Two more sleeps.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

........let's hope the coming twelve months all works out pretty much as we currently think it will.

I made the very last change to the FY2011 business plan a few minutes ago and do not intend to look at it again. We held an 'informal' board meeting last night to approve the plan and the slight change I made this morning will not make any significant difference to the end result and only recognises the additional effort we will have to make to attempt to retain our ADSL customer numbers above the contracted number we have agreed with Telstra in exchange for a slightly better set of buy prices - only notable for being the first price change we have had from Telstra in getting on for five years.....far too late and far too small to be of any real use to our end customers.....but much better than the nothing it has been in developing plans over the last four plans.

The numbers displayed in the neat symmetry of Excel always look impressive and the bottom right hand cell always gives me the optimistic feeling that we will achieve a sensible return for the efforts of a hundred people continuing to build a company of Exetel's size to a little bigger size by providing very low costs to several customer types in several different market places and therefore making a very small contribution to lowering the cost of internet services across Australia and therefore making Australia a slightly more efficient place to live and work. If only everything displayed in those thousands of cells would now 'just happen' it would be really great. Of course - that's not going to be the case; at least it has never been from January 2004 up until now.

As is always the case when you finish some fairly complicated, arduous and demanding set of tasks there is always, however briefly, a sense of accomplishment. In the case of developing a business plan that involves a significant number of services and marketplaces and a great many future 'unknowns' it also provides a degree of 'comfort' that you have carefully studied the current happenings and seriously examined the likely future happenings  and have been able to produce a comprehensive view as to how Exetel may well perform in hundreds of different activities over a reasonably long period. Exetel is, obviously, a small company (therefore our planning tasks are far simpler than those faced by much larger organisations) and we have developed the basic structure of the plan over the past almost seven years so much of the detailed structure of the plan already exists and has been validated against each past month's actual results so there is a solid base of data on month by month performance over the past 78 months on which to base the succeeding twelve month's projections - but of course any future twelve month period in data communications is always different to any previous twelve months and the changes in all sorts of areas are unknown and can only be very roughly predicted.

So all planning represents a best efforts set of guesses and, as in every other year, has to be managed one day at a time and sometimes one hour at a time with changes to future months automatically generated as each month's actuals are entered in to the current month they project different results than those original 'shiny' and optimistic numbers change a long way from what you start each year with. Passing time is a cruel mistress to any optimism you may have allowed to have crept in to your original assumptions. However our financial plan has been a very good set of check points to guide us through the many problems and 'surprises' with which we have been confronted since 1/1/2004 and hopefully this version will be better than any previous version both because we have had a lot of previous experience and because more people have been involved in its development than in any previous year.

As could be expected, after operating a start up company into its 7th full year, there are more reasons for optimism than at any previous time. We really have, after so many years, managed to develop a better telephone support and problem resolution set of services for residential customers and will continue to improve the problem solving abilities of those services in each successive month. We have also completed the re-design of the residential network to provide almost complete redundancy in every 'node'....as well as completing the upgrades to the bandwidth to a level we have never achieved before.....and with the processes in place to continue to re-dimension the bandwidth at prices that are far lower than we have ever been able to achieve in the past. There are many, many other reasons for Exetel to feel more confident today than at any other time in our short 'life' and there are so many new challenges about which we need to feel confident.

So - the new year will begin while I am a long way away in some remote rural region of another country - I hope I feel as confident when I return as I do now when the temporary euphoria of completing the annual planning is not even a distant memory.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

.....I have no real ideas.

There are still so many unanswerable questions about what will happen with ADSL pricing plans and the effects of wireless broadband and either Telstra's or NBNCo's fibre offerings over the coming months that it seems impossible, at least to me, to make any reasonable assumptions or forecasts about likely future movements in the residential ADSL marketplaces. Before doing any final changes to our financial operating plan today we have made the assumption that the two most likely scenarios will be:

A) Telstra will try and eliminate further erosion of its ADSL customer base by increased targeted marketing activities  in areas where they have exclusivity of ADSL2 by making deals impossible to refuse to other ISPs ADSL1 customers by all means at their disposal.

B) All other ISPs will be forced to lower prices in the exchanges in which they have ADSL2 DSLAMs to, in part, offset their ADSL1 losses in the country (and other DSLAMs) and to fend off each other in the areas where there are multiple ADSL2 choices.

This is based on the fact that the most likely direction of the total ADSL market being downwards at a faster rate than is currently occurring. Obviously I have no real idea of what is happening but there has to be some sensible assumptions about movements in marketplaces and these are the best that I can come up with. Exetel's ADSL plans have changed significantly to offer better pricing (lower than any other providers for 99% of the people who currently use Exetel's ADSL1 and ADSL2 services) and those price points have, so far, met the objective of new customers replacing the current customers who are leaving Exetel plus a small net increase but with the new customers downloading one tenth to one twentieth of the amounts the leaving customers were doing. Whether that excellent result continues is unknown but it is encouraging.

The number of Exetel customers who cancel their ADSL service and move to a wireless service is very tiny but it is increasing each month because for the customers who download less than 5 gb a month a wireless service for $A40.00 a month is much lower cost than an ADSL service plus telephone line rental and for people who can get around 2 mbps (which is a very large percentage) there is no 'speed' barrier. I am beginning to think that a 10 gb per month plan at around $A40.00 would probably see a dramatic increase in the number of users who would dump their ADSL and land line telephone service to save money and have the freedom of location but that is going to require a radical re-think by Optus on how they provide wireless wholesale services to companies like Exetel. There is one obvious to 'blind Freddy' solution which we have suggested but I don't see that happening quickly enough to make a sensible change to our currently predicted very low wireless broadband growth over FY2011.

Similarly I don't see much growth in fibre customers over the coming year with far too many unknowns to make any growth prediction sensible to plan for. Assuming that the current government does 'turn on' the Tasmanian service in early July we will be interested to see how our new concept of zero monthly charge plus pay for what you use goes against the unimaginative 'same as ADSL' price plans of the other three ISPs who have currently announced their pricing. I also wonder how the people in Tasmania will react to those ISPs pricing as more information becomes available and additional ISPs sign up to provide services? In any event it will be an interesting information gathering exercise which, together with the Telstra Point Cook trial and the about to be turned on (for Exetel) Opticomm fibre trials will make the impact of fibre services on ADSL take up clearer than they are today - at least to us. What transpires between Telstra and NBNCo will, presumably, be known some time before the next election and the information gained from these three 'trials' will hopefully allow us to make more informed decisions then.

In the meantime we need to decide over the next few hours what we do about ADSL1 and what, if any, changes we make to ADSL2 'bundling'. Too much to do too little time - the price you pay when you decide to take your annual leave before the end of the financial year and therefore lose ten days which you only now remember you always needed to complete the process.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46

John Linton

.....the world has become a different place and I haven't noticed.

Two articles in the WSJ this morning surprised me and demonstrate all sorts of things about how dollars are spent in tough times:

http://online.wsj.com/article/SB10001424052748704256604575295742380473502.html?mod=WSJ_Tech_RIGHTTopCarousel_1

http://blogs.wsj.com/digits/2010/06/15/internet-is-set-to-overtake-newspapers-in-ad-revenue/?KEYWORDS=advertising+and+internet

The first article surprised me because I had no idea that WOW had quarterly revenue of $US 1.3 billion and in the tough times of the last year continued to grow so strongly and the second article surprised me even more. I have known for 20 years that computer games makers did very well but to generate monthly revenue in
excess of $US400 million is amazing. Similarly I had no idea that on line advertising was generating the sorts of revenues reported in the second article. Just goes to show how insulated you can become when your focus is as narrow as mine has obviously become.

We had a pleasant lunch yesterday courtesy of one of our major suppliers to thank us for re-signing with them on a long term contract - something we have refused to do with any supplier for the whole our brief existence - for all of the obvious reasons. Our invariable practice has to be to resign contracts annually and, with one exception in the start up phase of Exetel, we have never signed more than a one year contract for any major service. Even this new three year contract has annual price adjustment clauses in it but it also does have a three year term. We did this for several reasons which, obviously, included the value of the long term commitment

One of our other major suppliers visited our office to present our corporate sales team with a nice glass 'plaque' in recognition of their great success in selling a very large number of mid range Ethernet services over the past 6 months - it was very courteous of the CEO of company to present the award in person and stay for a short while to chat with the corporate sales team over a 'celebratory sandwich'. I wasn't able to be present for reasons unconnected with having lunch with another supplier but the event was reported to have been very useful in a number of ways. Although we set out to achieve the sort of results we are now achieving in corporate sales it is still a little surprising, at least to me, that we have managed to execute the quite difficult aspects of that 'plan' so well with so little 'problem' (ignoring the efforts required in time and education). The 'ceremony' yesterday put those efforts in to perspective in terms of just how well we have done since deciding we should move the emphasis of the company from residential to corporate services to 'ride out' the coming storm we foresaw back in December 2008.

Perhaps its a self fulfilling prophecy but over the last 3 months we have seen a small drop in our residential ADSL revenue each month but that has been replaced on a 3:1 basis by an increase in Ethernet corporate revenue which also has the advantage of having a profit margin ten times greater than the residential revenue and still allows Exetel to provide those services at much lower prices than any of our competitors....which is important to Exetel as it was the only reason that we created the company and there is no point in our existence if we don't do that. So, self fulfilling prophecy or not, it's really nice some times in commercial life to actually plan for something in the future that is a major problem and then execute the plan well enough to avert the foreseen 'disaster'. Or it's dumb luck - either way it has worked out as well as we could have hoped.

So it was a very pleasant day in almost every respect and a nice break from gazing at figures on a screen.

Copyright © Exetel Pty Ltd 2010
ABN 350 979 865 46