John Linton ...and as the rain pours down from leaden skies in this part of Sydney it may well be a metaphor for 2010 - at least as far as the residential ADSL and associated markets are concerned. It will be time enough to assess the reality of 2010 in a month or so's time but the day on day assessments are that the sooner 2010 is over the better. I don't think I've ever spent so much effort over a twelve month period with so little positive result.....and that's aiming at very low targets in the recognition that the market was 'saturated' and that the 'new Telstra Retail' was going to create market conditions that were untenable....both 'predictions' proved to be under estimated and although our ADSLcustomer net loss is currently restricted to a little over 100 per month the gross loss is difficult to deal with.
I suppose one sign of just how 'troubled' the residential ADSL market is the fact that two of our three carrier suppliers are offering 'special promotions' that involve cutting their previous monthly ADSL2 port prices by as much as 25% from previous pricing but it's not a lot of use to us in today's market. Carriers seem addicted to the concept of "net adds" meaning that the new much lower prices are only offered for new customers and only to the net addition over the current number of customers you already have with them. In this extended period of wave after wave of 'welcome back' offers from Telstra Retail and then all other ISPs trying to compete with Telstra Retail's offers a good month, at least for Exetel, is that our residential customers decline by as little as possible with the small amount of revenue we lose from residential ADSL each month more than compensated for by the growth in business revenue.
To base any plans on increasing the net number of residential ADSL customers would be sheer lunacy for Exetel (though the TPG annual meeting indicated that TPG was growing ADSL customers strongly so at least one ISP has effectively countered the Telstra campaigns) in the current environment and therefore supplier offers based on "net adds" just defies any sort of common sense or logic - don't those guys look at what's happening in the residential ADSL marketplaces? Perhaps the real issue is that they are in fact achieving net residential adds with their other wholesale customers and only Exetel is feeling the impact of Telstra Retail? That may be the case but then I wonder why they are offering up to 25% off their current pricing if things are going well? Hard to see what is actually happening other than "too little too late". If the carriers wholesale business is being negatively affected by Telstra Retail's depradations then it is far too little and far too late to reduce pricing for 'new customers' while the major problem, at least for us, is to retain our 'old' customers and carrier offers that don't recognise that fact are, essentially, worthless.
What it does seem to suggest to me is that the Telstra 'win back market share' campaigns are very successful and, if they continue them, they will inflict a lot more pain and damage on every other other communications provider to the majority of the residential market places. Companies like Exetel keep improving their pricing and general offerings which means we/they make even less money than in the past but it makes very little/no difference as far as I have seen to our net monthly ADSL results and I can only surmise how it is affecting other companies....as the ones we track have continually 'improved' their residential prices over the past year I can only assume that they are dealing with the same results I see each month....but I have no knowledge of what is actually happening.
So it will be interesting to see what "Christmas Specials" eventuate now it's December.
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