John Linton I'm a bit bleary this morning (strangely hot and airless night - plus premier league games of more then usual interest making sleep short and difficult) but there is quite a bit to do this week when I checked my diary a few minutes ago. One of the things we need to make a decision on is what we do with the 'naked' ADSL2 plans. Our problem with ADSL2 is that we are charged very, very little less for a 'naked' connection as we are for a connection that includes a telephone line. Given the various slight inconveniences with activating and 'transferring' 'naked' ADSL services it is difficult to 'position' the service against it's 'inc telephone line' counterpart.
In this era of having to give away ADSL services at less than their basic cost (let alone their supported cost) wire line calls provide the only profit and in fact, at the sorts of prices that Exetel have to offer today, represent the only way of providing ADSL services at break even. It's hard to think of a good reason to actually offer 'naked' ADSL under the current circumstances that we buy the base service for and we have been thinking of discontinuing the 'naked' version of the Optus service completely but haven't done so because we think it would send the 'wrong signals' to our, quite large, number of customers who use the 'naked' version of Optus ADSL2. However, at a price difference of $2.00 at our buy price it makes little sense in these difficult days to retain a third 'version' of ADSL2.
The concept of an end user choosing a 'naked' service so they 'save' the cost of the telephone wire line and use VoIP is not a practical concept for the supplier, or least not for Exetel. The profit we make from the wire line telephony calls (even at the rock bottom prices we charge for calls) provides all the profit we have ever made on ADSL2 services and has been the only reason that has allowed us to continually offer the lowest priced ADSL services of any provider for much of our existence. So, some time this week, we will need to make a decision on whether or not we continue to offer 'naked' services.
Which is an odd sort of situation when you consider all that has happened over the past 8 or so years in the gradual acceptance of VoIP services and the extraordinary growth of people using mobile services in their homes instead of wire line telephony. Ironic really that wire line telephony use by the minority is the only reason that low cost ADSL can be provided to the majority. But, unless the figures I have been provided with over the years are completely wrong the simple fact is that the profits on delivering wire line services (even at Exetel's lowest on the market charges) have been the only reason that Exetel has been able to provide ADSL services at all.
So there is this quandary. Exetel makes no profit at all on providing the 'naked' services we currently offer. Equally, we make no money on the inc telephony wire line plans but we make up for that by the profits made on the wire line telephone calls. What would you do?
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