John Linton After two 'normal' days I remain surprised at the number of current Exetel customers who are transferring to the just released ADSL2 plans on the Telstra infrastructure - more than 500 in two full days plus the weekend. I am also surprised at the level of applications from new/churn users which has added 25% to the order level over the 4 days the plans have been available. Of course much of this could be explained away as the normal 'release date surge' but then we only really 'advertised' the plans on our forum and won't formally announce them to our customers until the September newsletter which only goes to around 20% of total customers - maybe we should send an 'announcement' to all ADSL1 customers?
One of the reasons for my surprise is that, although we did the very best we could with the pricing, we were 'hamstrung' by the extremely high buy costs - Telstra Retail's end user prices, providing you bundle other services, are much lower than what we could come up with. As several carping posters have pointed out our 50gb/120gb plan is $15.00 a month more expensive than the 50 gb Telstra Retail plan and, of course, we do not offer the $200.00 or so "cash back" credits that Telstra do. ( I don't know why they wouldn't think we hadn't checked the prices other providers offered before coming up with our own best efforts). So, given that our wholesale supplier is offering the same services at lower ongoing prices and much lower 'once off' prices than we can - why are so many more people than we expected buying the identical service for more money from us? In fact why does ANY customer buy a Telstra ADSL2 service from us? That has been my position until now.....it may very well remain my position.
At this very early stage, based on tiny numbers, I am assuming that there is a section of the market that just doesn't want to bundle in their wire line and one mobile service - for whatever reason(s). Maybe there are other reasons (24 month contract?) but until some sort of trend can be established that's all I can come up with. I don't know what Telstra plans to do between now and Christmas but I am assuming that they will 'improve' their offerings well before December and that makes me wonder what other providers, particularly Optus, will do. I suppose what is much more important is what effect Telstra's new pricing and marketing policies will have on the number of customers they 'win back' from other ISPs. As I mentioned yesterday - every 'win' for Telstra is a 'loss' for someone else and up to now other ISPs have been very happy to again sit just below Telstra's retail price points.
More importantly is that ever dollar other ISPs are forced to reduce their current prices by is a reduction in their profit. When the 'history' of broadband supply in Australia is written it may well be the case that a combination of federal government interference ('NBN1' and 'NBN2' and quite possibly 'NBN3') will be seen together with the effects of that interference on Telstra as being a turning point, perhaps even the turning point, in the way that the Australian communication industry operates.....and, quite possibly, not for the better from anyone's point of view.
In the mean time it will be interesting to see what happens in Exetel's 'world' in terms of how the Telstra 're-invigoration of interest in wholesale customers turns out - now that there is beginning to be a real wholesale market again in terms of the communications industry....
....or did you miss that more obvious scenario amidst all the current tub thumping and sundry ranting and raving?