John Linton's Personal Musings

John Linton

Last day of the first month of the new financial year. It will turn out to be a reasonable month, like most Januaries in Australian business effected by the fact that so many people take much of January as annual leave and that means the usual amount of monthly 'decision making' is not done - even in the residential market places. Exetel's 'figures' reflect a marked drop in land line calls, partially offset by an increase in mobile calls and reductions in residential over quota data charges. Corporate revenues don't drop but new corporate revenue is slowed down by the 'embargo' which sees the carriers not installing any new corporate services for a period of over three weeks from late December to mid January. It also reminded me that yet another January has passed in which I have not had a break from working.

So we are about to 'roll into' the year's second month with the first month passing in the usual 'blink of an eye' and with one month less to meet the current financial year's targets....and equally true, with one more month's achievement to add to the previous six. You can look at it that all businesses are tyrannised by month on month target meeting and everything associated with that process. Or you can look at business targets as being just a set of objectives that any individual has to meet to survive and grow in their personal life (paying the mortgage, helping their children negotiate the early stages of their lives). Every individual human being (at least those whose lives are not derailed by substance abuse) are semi-programmed to try and improve their personal circumstances and to assist their children attain some form of 'better life' than that of their parents. Any cursory look at the history of the human species clearly demonstrates that. We are different to every other living thing in that we are a discontented species and cause ourselves, and those around us, great unhappiness by having that basic urge.

What relevance does this have to anything? Possibly none whatsoever. Clearly I have no real knowledge of such a topic and my personal 'observations' definitely fall in to the the non-rigorous category. It was simply brought to mind when I was reviewing the past month and jumping ahead to the next month and all the changes that have to be considered (just to remain where we are) and I was looking at the carrawongs, ravens, kookaburras, lorikeets and sulphur crested cockatoos that were arriving for 'breakfast' on the patio. Over the years we have watched those different bird species rear their young with meticulous attention to their welfare by both parents to a level you seldom see in humans (even in the most devoted of mothers) and then see the various ways the parent birds ensure their young find 'lives of their own'. They are far more successful in protecting and raising their young and then launching them in to adult life than most humans I am aware of have ever been.

Why worry about something that is an intrinsic part of humanity? I'm not sure but it struck me earlier this morning that such imperatives still drive me (and many other people I am acquainted with) to try and accomplish things that have no real, perhaps any, meaning for my personal life nor those of my immediate family or my company responsibilities. It seems that humanity generally continues to strive to 'achieve' long past any realistic or even useful targets/standards/whatever.  Like migratory birds we are doomed to die making one more attempt to fly the 2 - 15,000 kilometers from wintering grounds back to spring breeding grounds impelled by some internal program that cannot be ignored. A pretty dismal thought to start the new week with.

Perhaps what is 'truer' about the human species is the we bore far too easily and we have to make up theoretical targets for ourselves that give the illusion of some sort of progress towards some overarching reason for our existence? Maybe the thought of not having a 'reason' to get out of bed in the morning  is too scary a thought for serious contemplation.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....but it takes a great deal of time to determine what is information and what is mis-information.

There are always too many aspects of the communications in Australia (possibly in many other countries) for anyone that I have ever met to fully understand at any point in time that I have been involved in it. For company's of Exetel's size it isn't ever possible to devote the resources to obtain any sensible understanding of even the tiny parts of the industry that directly affect our small endeavours and we have to be 'content' to try and get a general idea of where the industry is heading so that we can make whatever meagre preparations we can to allow ourselves to continue to first remain in business and then, if possible, to continue to do a better job in all aspects of providing services so that we become more effective in meeting our overall objectives. At least that's the theory.

I don't know exactly how much of my personal time I spend on reading the industry media (mostly the overseas media as the Australian communications media is generally unhelpful) but it's between 10 and 15 hours a week. This time includes corresponding with various people in Australia and other countries about their personal views on a range of issues and replying to people who write to me on aspects of Exetel. I enjoy the continual challenge of trying to understand the likely changes of direction in terms of the technology that will happen and also the likely changes that various major influences on the market will bring about and how companies of Exetel's size can respond to and, if possible, benefit from them. So will 2011 bring any changes that will provide such opportunities?

I have my own views on what the opportunities may be in operating in marketplaces that are dominated by the 'defensive' strategies employed by all of the major providers - and by most/all of the smaller providers - but we are helped by the fact of our size and our ability to change quickly and move in any 'new' direction that seems to be the best thing(s) to do. On the down side we have been adversely affected by the meat axe wielding approach adopted by the largest companies in addressing their perceived problems over both 2009 and 2010. We were too slow to understand the problems these approaches would cause but we managed to survive and grow despite our late responses. The key question now is - what will the largest companies now do after expending so much money and effort to effectively remain where they were at the end of 2008? They have to do something more/better than they have done because they have no alternative future and that future is one where there is much less profit than the one they have operated in up to now.

And that, based on all the information I can find, defines the key situation - what does Telstra and Optus do over the remaining 11 months of 2011 to maintain (it seems unlikely that they can continue to grow at previous rates) their current market shares and profits. Obviously people much cleverer than I and with far more experience at both those companies will be providing answers to these twin problems and it is what they decide to do that will determine what every other much smaller company will have to do in the coming months.

Any ideas would be welcome.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

It was a very fractured week for me - arriving back in Australia on Monday and taking balance of that day to readjust backwards by five and a half hours, Wednesday being Australia Day and flying to Melbourne and then staying for a few hours to call on two Melbourne based companies we might do some sort of business with resulting in not getting back to Sydney until late Thursday afternoon which basically left Friday as the second 'working day' of the week. So although I worked the usual number of hours the week in Sri Lanka plus the heavily disrupted week that has just passed don't seem to have produced much in terms of progress for the Australian company.Perhaps that's actually a good thing in terms of a 'traditionally quiet' month - what an abysmally stupid phrase that is.

I won't know the actual progress, in numbers terms, until Tuesday morning when we get the recurrent revenue results from the monthly bill run but the 'feel' of the month is mostly positive. The day by day numbers are on track for every part of the business except corporate sales which, while always being down is currently further down than I would like to see with much promising but less result than was anticipated. However we did have an exceptional, record, December for corporate sales and that could be a contributing factor. However, in business as in much of personal life, there are no excuses for objectives not being met.

The only significant disappointment in January has been the inability to hire more sales trainees in Australia for corporate sales. In contrast we filled the additional sales positions in Sri Lanka within a few days of approving the increased head count. I don't know what it is about our inability to find suitable sales trainees in Australia lately - for the previous 18+ months we had no trouble in finding excellent trainees. It obviously needs a re-think of what we now fail to do that we used to do well - or at least productively in being able to find people who turn out to be successful in selling to corporate buyers.... and we need to do that with a greater sense of urgency.

The month was dominated by the major changes we made to our residential ADSL plans to come in to effect from February 1st 2011. The advisory emails sent out on January 1st resulted in a quadrupling of telephone calls to our sales and support lines and major activity in our forums. I received many emails from customers and business
associates telling me I was insane to do such things and that my actions would destroy Exetel by forcing "all" of Exetel's customers to move to "much better" ISPs. Maybe that will be the case. If it is then Exetel, and I personally, will be much better off financially because we will no longer lose money providing residential services at a loss. Looking at the daily figures it seems unlikely that will happen and far more likely the actual number of 'lost' customers, and more importantly the 'profiles' of the lost customers will end up as being slightly lower than my personal estimates and much lower than my colleagues more 'pessimistic' estimates - however we won't know for sure until the end of next week.

I have found little time to research the state of the markets in which we operate or any changes in our competitor's approaches to those markets so I can't get any sort of feel for what is happening in competitor land. From the little I have seen directly there is no change to the general 'desperation' that was evident in the last six months of 2010 (in that I have seen no changes to pricing or approaches in January for what that's worth) and I guess we'll have to wait for the half year reporting to see what the larger comms companies actually achieved in the last half of 2010 as they file their half year reports next month and the ABS publishes their half yearly statistics.

I am looking forward to a 'full' week next week with more confidence than I have had for quite a while - the 'magic' of a break no matter how brief?.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

...or, for that matter, no new movies? That could never happen.....or could it?

In an ethicless and immoral society that considers (or rather doesn't consider at all) stealing other people's property as something they 'just do because they can' it may happen that the producers of products that are not paid for simply don't produce them any more:

http://online.wsj.com/article/SB10001424052748703779704576074283037958472.html?mod=WSJ_Tech_LEFTTopNews

It should be obvious to anyone with an IQ greater than their shoe size that if a studio cannot make more money from selling its products than it costs to make them then it will have to stop making them before the banks foreclose on their loans. Making quality TV shows is very expensive which is why 'reality TV' shows have proliferated over the past five years - getting a bunch of wankers to act out their stupidities on a box set costs mega millions less than having to bother with things like script writers, actors and locations. 

The Hulu experiment is the result of copyright theft. For three years three of the biggest entertainment makers in the world have tried to find a way around the stealing of their products and have managed to partially 'control' the distribution of their products to the copyright thieves. Reading the cited article they have not been able to do that and are now looking for new ways to address the concept of making products that do not generate financial returns that are more than the cost of making them. Like every other financial problem in the worlds of business, innovative thinking and fiscal bravery may eventually deliver a solution - but the studio owners have never been noted for either of those characteristics outside the fiction of their products - and in some cases their own lives.

The other factor is 'studio consolidation'. Over the past three decades the number of studios (i.e. those enterprises that own and operate sound stages, the requisite equipment and other necessary infrastructure) have reduced quite significantly. The issue raised by this is if the number of movies/V shows made continue to decrease then the cost of 'renting' these necessary facilities will increase or, as with the merged studios, will disappear completely. The whole point of studio consolidation was to keep some percentage of the facilities that are needed to make movies/tv shows in place so that their cost of production could be lowered. The less studio square meters (square feet?) there are the less footage will be made (has "footage" been replaced by "meterage" yet?

Before anyone can say "it will never happen" you would have to consider that it actually not only could happen but that it inevitably WILL happen/may already BE happening - for the simple reason that all money invested in commercial enterprises requires a realistic return. At the moment, and since it's inception, the movie business was based on investing a sum of money in making the product and getting a return on that money from ticket sales and latterly 'merchandising'. TV shows were made on the basis that the TV channels would pay a higher price for them than it cost to make them because the advertising revenue they received was greater than their cost. Even a child would know those obvious facts let alone their parents......but........

...the history of the human race shows it contains the seeds of its own destruction which is a high falutin' nonsense that means human beings use finite resources that they depend upon with no thought to how those resources exist or what they will do when they run out.....assuming they ever think about why the resources exist in the first place or whether they will run out and what they might do if that occurred. In the cases of the Egyptians, Romans, Incas, Nazis etc there were serious consequences. Certainly no-one other than 'movie stars' will be even slightly inconvenienced if no new movies or TV shows were made - in fact every person on the planet and the planet itself would almost certainly be better off.

Maybe the parents of their ethicless and morally bereft children are actually doing a public service?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

It has taken a while to get this year started - for the first time in I can't remember when we have not been able to put everything in place before the first day of January and are still completing work that would in every other year of my 'management life' have been completed, implemented with the first month's results being capable of being measure and adjustments done for the next month. Perhaps it's that life in the communications industry is much more complicated than it has been in the past (true but that did not affect getting 2010 under way on time) but I suspect it is the time delays inherent in sharing decision making more widely to improve the management skills and understanding of Exetel's managers and supervisors.

With one or two,relatively minor, exceptions everything is now in place which is just as well as January is now over and it's hard enough to make financial and sales targets with a full twelve months let alone reducing the time available to eleven months. I'm not sure that it's my rapidly advancing age that makes the time taken to do simple things seem to be becoming less and less - that may be the case. However, I'm more inclined to believe that it is other people's inability to actually do things in, what I would judge to be, a reasonable time frame that is the problem. That is absolutely certainly true with every single one of Exetel's suppliers whose ability to meet even the second or third date for making any mutually required decision is notorious for their inability to do so.

So - what can be done? The only real answer is to involve yourself in activities that are not dependent on other people's fluffing around and inabilities to take responsibility for actually doing anything in a time frame that suits anyone but themselves. Probably too pessimistic a view of humanity generally or Exetel and its associates in particular but very definitely one that I am leaning towards more and more. I don't remember ever having this sort of trouble in the past - and that may be because I have developed ever more demanding standards as business life has become ever more complex and the disconnect between my experience and knowledge has become greater as Exetel's growth has required us to employ more people. That's a futile path to go down because it is a current reality that is not going to be changed by anything under my control.

So, as usual, a person of my age, upbringing and experience blames themselves for the inadequacies they perceive in others and does nothing to remedy what they see are problems in performance of others but sees those issues as being deficiencies in their own abilities. After all we can't find different suppliers for most of our services and there doesn't appear to be any way of speeding up the development of a sense of timeliness in others until they have suffered the consequences of being dilatory enough times to understand why targets and dead lines really do have a need to be met....or it all ends in tears before bed time.

I have a perfect alternative 'job' if only I could find the time to do it.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

Exetel 'created' an agent program in July 2004 and we still have many of those first agents actively promoting Exetel services around Australia. Over the first year or so of building up the agent program it became, and remains, an important part of Exetel's existence and in the current very difficult times it has become even more important. As the problems of Telstra's ongoing 'win back' programs together with TPG's saturation advertising have made life very difficult for Exetel and therefore our agents (resulting in the recent price increases for ADSL services and our need to reduce agent commissions) our agents have been faced with increased difficulties.

Part of the 2012 planning was based around what we could do for our agents and VISPs (wholesale customers) to at least partially address the ongoing loss of customers to Telstra Residential's increasingly shrill campaigns and their increasingly magnaminous financial inducements. We couldn't come up with very much for all of the planning period but a chance remark by a prospective agent on a completely different topic started us along a more productive chain of thought. By COB tomorrow we will have put in place a new set of 'agent only' plans that should provide our agents with unbeatable ADSL1 and ADSL2 offerings for lower end users (10 gb peak, a 12 hour off peak period of 180 gb plus $10.00 discounts from those low prices for each mobile plan ordered). These plans will be 'unbeatable' compared to any competitive offering.

We could never achieve the pricing of these plans but our ViSPs and agents remove the selling and support costs from our pricing 'models' and allow us to make $2.00 profit per plan per month with the agent able to beat any competitor's pricing. Whether the agent want's to add a few dollars extra and create his/her own plans is entirely up to them - our VISPs will certainly do that. If our agents want to to that we will, by the end of March, offer them a plan rating and billing service that will allow them to set their own prices and have the billing of their customers done by Exetel on their own invoice company headings so that they can maximise their financial returns based on their own decisions of how they price the services.

We will also provide longer telephone support hours for agents by providing extended hours agent support from Sri Lanka over the coming months. this will be part of the program to add 'white label' product and financial services, such as billing and accounts collection processes as well as agent customer support processes (at a low charge) for the larger VISPs.There is a very long way to go to complete the processes that will bring these new ideas/concepts to full implementation but it seems a very sound premise that will increase the ability to provide residential services to low and medium residential down loaders.....the majority of the overall market places in both city and country locations. There may well be a whole lot of difficulties that we have not considered/are not aware of but the initial reactions and suggestions from the agents who have responded to this offer have been very positive. It will be interesting to see how it works out over the next week or so.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

As I had more time than usual, courtesy of jet lag, to read the press articles today I came across this fairly innocuous one:

http://www.japantoday.com/category/technology/view/kddis-net-profit-falls-as-revenue-from-voice-calls-drop

The continual falling of PSTN/ISDN voice services in Australia is well publicised and Telstra continues to act accordingly in promoting its other services with special emphasis being given to mobile data services and all mobile companies promoting ever more 'feature laden' (I really sometimes wonder where marketing people are 'educated') 'packages'. Now that the ABS routinely reports that there are more mobile services in use than there are people in Australia you would have to reach the conclusion that in, at least handset terms, the mobile market is saturated. (One of the more incongruous sites in Bangkok last week was the tiny old lady who seems to be a permanent fixture of the bus stop outside the Gem Tower was that she was using a mobile phone as I wandered past).

This brief report seems to indicate that revenue from telephone calls over mobile services reduced in the last reporting period - which is understandable as more and more 'minutes' are being provided at the same or lower prices than previously. Obviously the rapid rise in data use over mobile telephones has more than made up for the reduction in telephone call revenues (some time late last year I referred to a US article saying that data revenue would overtake telephone call revenue for US mobile carriers in 2011). So what happens now? With the Australian residential ADSL market 'saturated' is the potential saturation of the residential mobile market going to have a further impact on the way communications services are provided to residential users?

I don't have the slightest idea having only a minor interest in mobile telephony which, as far as my biased mind is concerned is operated by spivs and con men below the carrier level. What does interest me is the ways that such saturation may affect Exetel this year as we attempt to sell more mobile data and other mobile services as apart of residential ADSL services. I have never used a 'capped' mobile plan and my current Exetel MoIP service that gives me 10 cent untimed local and national calls and very low mobile to mobile rates makes it unlikely that I ever will. However I know I'm in a miniscule minority as long as mobile handsets are "given away" as part of ridiculously over subsidised carrier mobile promotions (which leads to the scenario of mobile resell scams that cost 40 people their jobs over the weekend):

http://www.esperanceexpress.com.au/news/national/national/general/vodafone-dealer-shuts-down-after-expose/2055849.aspx

One of the important objectives we have to put in place before Febrauary 1st is what we have to do with our Optus mobile offerings to make them more appealing that they currently are. Given the slight insight of the referenced article that is obviously going to be more difficult than it already was considered to be. The Optus plans we currently offer have been more successful, in a very minor way, than I thought they'd be but that minor success encouraged us to think how we could do more. I'm now not so sure we will be able to do that but it is worth some effort to see what could be done. For no real reason, other than I have had a very relaxing time over the past ten days, I feel unreasonably optimistic that we might be able to do that.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....and this is made brutally apparent from the moment you arrive back or to visit this country. I arrived back in Australia this morning to be confronted by a customs hall that was full of weary travelers having to queue for 40 minutes to wait for a beagle to sniff your suitcase to see whether you are trying to sneak a piece of fruit or salami or whatever past the dozens and dozens of super diligent customs officers. Strangely countries like the two I have just been to (just like the countries I have visited in the EU or Japan) don't seem to have any such dangers as I've actually never seen any presence of 'customs officers' in any of those countries airports - you simply collect your bag(s) from the carousel and walk straight out to find the transport of your choice. Oh well - I suppose it serves some purpose here that is not necessary in so many other places in the world.

I was glad to eventually get home and receive that welcoming smile and embrace that is, largely, only available between people who are unused to being apart from each other. I was also delighted to receive a boisterous welcome from our very ill, old dog who, albeit briefly, shed his very advanced years and his terrible illness to frolic like the puppy he once was. Unfortunately, for a person who is usually asleep before the aircraft takes off and has to be woken just before it lands, I slept for less than two hours on the nine hour flight home and therefore now feel very jaded as I finally get around to writing today's blog very late in the day. It's the first time I can ever remember not sleeping on any international flight.

My first priorities are to get the plans discussed in Sri Lanka implemented in Australia and to ensure that we make much more rapid progress in 'linking' the SL and the Australian sales efforts and processes. While this will be based primarily on the selling of data links we also need to now put in place the selling of VoIP, Mobile and wireless broadband services. Easy to say and actually, hopefully, easier to now do having put so much effort in to doing all of the required ground work. It will be a very exciting time over the coming months to see whether we can make the more of our ambitious plans become a reality. Over the last 6 or so months we have installed over 100 new business customer VoIP services covering multiple sites of each  of the different 'flavours' of our VoIP offering for many different sized companies and our delivery has always been rock solid in every State and Territory - as it is for Exetel itself in both Australia and in Sri Lanka.

VoIP is planned to be one of the key drivers of Exetel's growth this year as, again, it is one of those things that few Australian suppliers can do well and even fewer can do well at a good price and with solid and immediate support. In many ways it is like wireless broadband for corporate users - smaller (and larger) companies can't provide the quality with a 'corporate' offering just being a residential offering with a higher price to the corporate buyer.....and the terribly inconsistent performance because the residential service network appears to be deliberately under provisioned....at least that's the only explanation I can come up with from the tests we have carried out. It will be interesting to see how all these initiatives transpire over the coming weeks.

2011 in Australia will be different.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

....or at least some semblance of it.

I will get the flight back to Australia this evening but have a 'free' day to spend as I choose in Bangkok first. I started it well by getting up very late and then having a leisurely breakfast watching the morning river traffic on the terrace in temperatures that were very mild for Bangkok - lowish 20s I would think. As I am a very poor planner of my own spare time I haven't arranged to do anything specific so I will undoubtedly fritter the day away doing very little. Not being a fan of temple tours or tourist activities in general I will confine my excursions to a walk along the river on the recommended tourist route if my map reading skills are good enough to locate it and, as Annette is not with me which would make it impossible, have lunch at the highly recommended market at the return point of the 'trail'....assuming I find it in the first place.

Finding something sensible to do while eating by yourself (or worse drinking by yourself in some bar) has always defeated me even though I have traveled a lot over the past decades and found myself in that situation more times than I would have liked. Reading a book or newspaper is possible but not pleasant and, depending on the size and 'dressing' of the actual table, quite often logistically difficult to the point of practical impossibility. So I have done a lot of thinking over the past week which has mainly been about Exetel and where we are today and where we might be going over the coming months.

The last seven years have been very, very difficult for a start up company and particularly for me personally. When I was doing my part of the planning for this year in late November and throughout December it kept creeping in to my mind that did I really want to go through the hassle of managing a company in truly difficult times for yet another year? The short answer was - no. But then, always being optimistic, I came to the conclusion that no year could come close to being as truly awful as 2010 was (or even 2009 for that matter) and it would be a waste of so many people's incredibly hard work over the past seven years to not see out the rest of the journey and see if we can make some positive contribution to data communications in Australia. It's a small enough ambition to use up a life time on.

It will be fascinating to work through the problems associated with growing a 'business' business that is larger than the residential business it has taken seven years to create and see how close to the four years we estimate that will take as we reach the two year mile stone in two weeks or so's time. Will all the experts who have told me to my face, or to other people 'behind my back' that trying to sell to Australian businesses from Sri Lanka is "insane" along with the rest of the concepts that we are trying to put in place be proven correct? I suppose that, when all is said and done, remains the motivation.....trying to do very, very difficult things in the face of 100% scepticism if not outright derision.

Maybe it is not possible...it just doesn't look that way to me....at least it doesn't at this moment in time. All business either succeeds or fails on one premise and one premise only and if you are building a business built on meeting the various requirements of that premise then, if you have enough courage, skills and fortitude, you must, eventually, be successful. Giving up when things get very, very tough is not an option.....even for the more timorous.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

PS: Nice to see that TPG continue to employ sleazebags with no ethics and no knowledge. Somehow I doubt that Ms Wardlaw has any future in any sort of profession other than the oldest one. What it does do is confirm the problem of ripping off your customers and then having to go back to them trying to keep some revenue by having to meet the pricing of competitors who don't rip off customers and don't lie about their competitors services capabilities and costs. What a total jerk that woman must be.

Hi XXXX

I have approval to meet this price, however, our product manager is
familiar with Exetel’s offering and he believes that the offer includes a data
cap of 500GB and not unlimited internet. He also advised that the lines for
this Exetel service are not included and that Exetel expect the customer to pay
and supply the lines so that they can deliver this service, and this of course,
is at an additional cost.

TPG’s EFM service offering includes the lines. We are prepared to
meet the price with the following inclusions:

• TPG EFM (UP TO 10Mb/10Mb*) 8 wire service


• ULL Lines included (subject to suitable lines
  available)


• 500GB Data Cap per month, $1.00 per GB excess data


• Note: Jamboree Heights exchange has been classed as an
  ‘Amber Zone’ meaning Telstra deem part of this area to be unsafe and this
  may cause delays in installing this service. We will not know exactly how
  long the wait will be until we place the order

*EFM service can be supplied to
locations up to 3km’s. The established speed will depend on the quality of the
cable and infrastructure, and the distance from the exchange. Your location is
approximately 2.6km, therefore we are proposing an 8 wire service to provide a
service of 10Mb/10Mb, or close to.

If you wish to go ahead, please let me know asap so that I can have
this pricing validated. I look forward to hearing from you.

Kind regards,

John Linton

.....and I feel so much better than I did when I left Australia 8 days ago.

I got up well before dawn today to begin the trip home to Australia. Fortunately the drive from the hotel to the airport was incident free and very quick as there was little to no traffic. Even the entry to the airport was less painful and time consuming than usual and, an unheard of situation, there was no queue to go through immigration. Apart from the fact that the SL Airline lounge 'hostess' told me my flight was delayed (when it wasn't) and I therefore felt the ignominy of having a nice girl come looking for me everything was very pleasant which is by no means a usual experience at Colombo airport. The flight to Bangkok was equally incident free and the aircraft was barely one third full - I must remember to get this flight next time.

I completed the SL quarterly review shortly after lunch yesterday as I expected which gave me some time for some personal shopping without the usual rush and although I didn't manage to buy anything I made some progress on buying next time I am in Sri Lanka. So all is well in this part of the world - as least as far as Exetel activities go for
the time being. I've enjoyed my trip and I think the review has been quite useful in a number of different ways. I decided on the short flight from Colombo to Bangkok that I would discuss some new ideas that came up during the review with the sales personnel in Australia when I get back on Monday which, if they survive the harsh light of Australian cynicism might be useful as we continue to modify the directions we are taking with the Australian company.

I will spend one day and night in Bangkok before taking the flight back to Sydney which will give me some time to reflect on how best to do my part in directing the companies over the coming months as we try to execute some of the 'braver' decisions we have made over the last weeks of December and are now three weeks in to executing. I see no signs, as yet, that our decisions are not working out as planned but it's very early days and not everyone is back fully functioning from their annual holidays yet. February will have to pass before we know the results of some of the changes we have made.

It would be very, very foolish to think that 2011 is actually going to be any better than the truly horrible 2010 as far as Exetel is concerned. However, probably the influences of spending a week in predominantly Buddhist environments, I feel a lot more relaxed and a lot better about Exetel's prospects for the coming year than I did at the same time last year....I very definitely "feel the need" and I haven't had that experience for quite some time now.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

....and the largest container carrier I have ever seen is being gingerly guided away from its wharf to leave the harbour which, end to end as it is spun round, seems to almost touch the wharves on either side in the half light. I have completed 3 days of the review and should be able to complete the remaining items before lunch today - with a bit of luck. I think we have made some sensible decisions which should help us to achieve the SL company targets over the coming months but, as with all planning that involves human beings only time will tell what the actual results will be. During the review so far we have agreed to increase the staffing here by another nine people which will take the personnel establishment over 60 people for the first time.

The other significant change we have agreed to make is to turn the focus from being almost almost purely a support centre to becoming far more a sales operation by steadily building up an outbound sales force that will become an integral part of the process of selling business services to Australian companies working in conjunction with the Australian based personnel. We will continue to support residential sales enquirers in Columbo (and will increase the number of people doing that from 10 to 12) but our major personnel growth plans are to develop our outbound sales activities in Sri Lanka over the coming months.

We started to build an outbound sales force in Colombo in November of last year when one of our Australian corporate supervisors went to conduct the start up training for the first two people. Since then we have added a further three people who have been trained by the initial two. We will send one of the best corporate sales reps before the end of this month to teach them how the Sydney corporate sales staff cold call and qualify businesses for EOC and Fibre data links and how to sell smaller businesses our ADSL based business services (email and web hosting and VoIP, mobile and HSPA services). Before Clare arrives in Colombo we hope to have at least one more outbound sales person and may be two others either then or shortly after.

Our current plans are to 'twin' one SL based sales person with each of the Sydney based sales rep who will work in tandem identifying small and large businesses who might be able to buy Exetel's services - the small businesses initially being handled by the SL sales people and as they learn more handling the smaller bigger data services (EOC) with the Sydney based sales people only selling fibre services. That's the long term plan but, clearly, we are only at the very, very early stages and I have no view as to the time frame we could complete this sort of program or whether it is in fact actually possible.

What I do know is that the smaller business market place will not be able to be addressed via the very high cost processes that are in place today in Exetel's competitors and the current upheavals in the residential markets will plague the small and medium business markets in the not too distant future. As Exetel foresaw what has happened in the residential ADSL marketplaces over the past two years so we see similar changes in the small business and medium business markets this year and certainly next year. Almost all of the current suppliers to the business marketplaces have customer bases that are being charged ludicrously high prices for very basic services and are going to find themselves facing the problem that companies like Exetel will continue to offer faster services at half the price to those customers who will then turn round to their current suppliers to match or beat the Exetel offers.....

....and that will be just the start of their problems.....

 ...because they will have to use their equally high priced, vastly over paid, sales forces to 'waste time' trying to persuade their own customer base to stay with them at half of the revenue they are receiving today. Not a sensible business scenario but the 'reward' for ripping off their customers over the years and getting fat, dumb but happy on over charging for "business grade" simple data links.

At least we have addressed all of those sorts of issues in anticipation of sweeping changes in the business data link marketplaces.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

....tens of thousands of people manage to do it all round the world every year so it can't be very hard........

I had a very long day yesterday as all major review days almost always are.  When I think about it, which I did last night for a while, I have always worked in the IT industry, practically before there ever was one (and the acronym at the time was not even EDP it was ADP which will give some clue to how long ago I began this 'career'). In all of that time the one 'constant' was annual or bi-annual change - by which I mean not gradual change but very significant, sometimes, wrenching change. I wonder whether any of the 13 year old clamourers after 1 tb downloads and 1 gbps fibre connections could even understand making an airline reservation system actually work, and give a customer an acceptable experience, on 1.2 kbps links?

So yesterday we made many fundamental changes to how the Sri Lankan company will operate in the future which required some tough decisions to be made here and some even tougher decisions to be made in terms of how the Australian company will now begin have to change to operate over the coming 'new' calendar year. We have been very fortunate to date in both the Sri Lankan company and the Australian company that we have never had to deal with losing any 'key' personnel. When you look into a business future that will require a great deal of change (and a lot more people) it puts in to perspective how very, very fortunate Exetel has been, to date, in not having to deal with that serious problem and how, almost unthinkingly, we have assumed that the people who have joined the company over the time we have been in business can keep on 'growing' to take on more and more responsibility for more and more complex tasks and, also, take on more and more responsibility for first managing other newer people and then 'teaching' them to 'manage' other people.

To date we have built a smallish, vaguely commercial, enterprise with a little over 100 people in two locations. In that time we have hired approximately 10% of the current personnel with some sort of directly applicable previous experience with 90% being new graduates or graduates with very limited work experience none of which has been applicable to our industry or products/services. We have hired one very experienced person as GM of the Sri Lankan company and, very recently, a very applicably experienced Australian sales director. All other current supervisors and managers within Exetel (in both locations) came to Exetel with absolutely no management experience of any kind. We, like all start up businesses, coped with this via very close inter-action with the founders/directors of the Exetel business and therefore, in some ways, the best possible on the job training for future management positions. However that phase of Exetel formally ended when we set up the SL company where, by definition, none of the Sri Lankan employees would work with Exetel's founders and, even at the stage we are at now with 50 employees contact with Exetel's directors would, largely, be limited to a quarterly progress review every 3 - 4 months.

So, half way through this SL company review we are making plans to double the number of SL personnel over the coming 12 months and are looking at how we develop the supervisory and management personnel to make that possible. Of course, we are also basing this calendar years business plan in Australia on undertaking a very similar magnitude 'program and face identical challenges with the one 'benefit' that Exetel's directors/founders still work in the Australian operation at very 'hands on' levels. (actually I'm not sure just how much of a benefit that may be). Whatever way you look at it Exetel will only be able to begin to attempt its currently planned growth if it can dramatically lift the level of management competencies that are currently in place. Right now - I don't know how to do that and I don't think anyone else in the company does either.

The coming two days here and then the balance of the month back in Sydney will need to produce some much better ideas than currently exist. I dreamed that I was at some sort of event last night and I noticed that I was sitting next to Bill Gates. I asked him how he had managed to build Microsoft so incredibly successfully in the early days with his own total lack of management experience. I wish I could remember 'his' answer.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....the second major requirement of any manager's job - much easier said than done in my personal experience.

The first day of the SL Company review was not as productive as I had hoped for - mainly my fault and certainly my expectations were too optimistic. However there were some productive outcomes and I did get a better idea of how some of the supervisors view their abilities to do their jobs and what they can do better in the future. It did also underline my simplistic view that after being managed so rigidly over these start up years one of the key changes we need to get to happen is to provide, and have exercised, more 'local' decision making and encouraging more 'initiative' from more people in Sri Lanka. That is straight out of page one, paragraph one, sentence one of management for the under 5's but ......and I have to say this one more time......there are 'cultural' differences that make that a little more difficult than you might, at first, think.

The only 'concrete' things we accomplished yesterday were to put in place the revised sales targets and commission plans for the  inbound sales people and to present the sapphires to the four sales people who had made their first 500 residential sales and to the two sales people who had made their first 1,000 residential sales. The other interesting part of the day was to listen to five of the team leaders present on what they had accomplished over the past six months and how they were aiming to improve their team's performance over the coming six months. I found them interesting because at least two of the presentations were quite different to what I had anticipated - which is always a chastening experience.

It will be quite a challenge over the coming three days to make the amount of progress in changing the current methodologies that are in danger of becoming 'entrenched' in the SL operations and to encourage more confidence in doing things differently to the "way we have always done this or that". I think I will have trouble containing my irritation if I hear that particular phrase one more time......though it does emphasise the dangers of 'command management' especially when it is exercised from 8,000 kilometers away. It also demonstrates how quickly things change when a company grows fro a handful of people to over 50 in less than three years during times when the base precepts of the overall company are going through radical changes imposed partly by the market places in Australia and then compounded by the changes the Australian company has to go through to deal with those changes.

Whether I have the ability to convey the necessary scope and level of change that has to happen in SL over the coming months is yet to be seen. After the first day it looks like being more of a 'challenge' than I had anticipated - but then, from the first day of first visit to this country to begin the set up of a company here (and every subsequent visit) I have always felt the same way...with subsequent days gradually dispelling that first evening 'despair'. This is a very different place. However it's a bit after 6 am here and the Stygian darkness of an equatorial night is beginning to lighten so hopefully that is a metaphor of my situation.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

......I have lost count of the exact number of times I have visited this city since we decided to set up an office here but I think it is my 12th trip. The hotel doorman greets me like a long lost friend and 'everyone' else on the way to the check in does the same. This particular trip was marked by the most nightmarish drive from the airport to the hotel of the 23 trips (to and from) - which is saying something because, even though I am very familiar with it and usually close my eyes for most of it, I truly feared for my life this time.....not because it was too fast....but because it was too slow. The car, I eventually worked out was a Prius with zero acceleration and a driver who, even taking into consideration the rain, insisted on driving in the middle of the two lanes with the result that dozens of angry drivers overtook him on either the inside and sharply cutting back across or risked the oncoming traffic overtaking on the outside and doing the same....blasting their horns while they did so. The drivers preferred 'tactic' was to sit just behind the even slower trucks in their blind spot to compound the danger to all and sundry. The usual 35 minute trip took an hour and I was thoroughly shaken up by the dozens of 'near misses' encountered over that Hellish time.Not an auspicious start. However the hotel room is so familiar it's almost like coming home and the add ons are always appreciated.

I think the two day stop over in Bangkok 'worked' as I feel more relaxed now than I can remember and am looking forward to meeting with the various Sri Lankan supervisors over the next few days to determine just how we can improve all aspects of what we are currently doing and just how effectively and quickly we can switch the focus of the SL company from 'inbound' to 'outbound' activities and from an almost total residential set of processes to an increasingly business set of processes. I have this quite simple set of objectives to put in place and I'm hoping I will have the clarity of exposition to allow other people to understand the 'beauty' of their simplicity. I was hoping that the Australian corporate sales person would be here for at least an overlap of one or two days to make the explanations easier but fate determined against that simple requirement.

I was sent this 'news item' yesterday:

http://www.theaustralian.com.au/business/service-provider-dodo-mulls-float-in-energy-play/story-e6frg8zx-1225989018284

which surprised me for a number of reasons - none of them related to the head line which, it seemed to me, was strange in itself. I always love seeing figures stated by company 'spokesmen' because they provide the only real input into what a company may or may not be doing. The various numbers quoted in this case are so self contradictory they must have been 'winged' over too much alcohol you would think. 700 personnel for 350,000 customers but only generating "around $A200 million in revenue" are tough numbers to make any sense out of - surely? Even assuming the majority of the Manila based personnel are outbound sales people it is hard to make any sense of them. But - as the CEO made the statements you have to assume they are, if not totally accurate, then in some sort of 'ball park'. Perhaps the reporter misunderstood some of the figures that were quoted?

The only reason I was interested in the article was related to our own, far more modest, plans to build an outbound sales capability in Sri Lanka which, currently, we are only in the very early stages of putting in place. Our plans in 2011 are to build our outbound sales force from the six current people to around 50 people by the end of the calendar year but that is totally dependent on getting an awful lot of things very, very right and is by no means certain we will be able to do that let alone in the time frame we have set . To read that a company like Dodo have built a 500 person 'call centre' in Manila is an amazing achievement and I would be fascinated to know how that was accomplished.

It's time to start my Sri Lankan business day here now so I will leave further speculation for another time.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

I read this yesterday:

http://www.itwire.com/your-it-news/home-it/44379-broadband-users-have-more-gigabytes-than-they-know-what-to-do-with

and wondered why stating what everyone in the industry, including the majority of experienced customers, have always known constitutes a 'news item' I was curious about its figures and how on Earth the 'analysts' had reached their conclusions on the usage growth over the years.....which don't relate to our 'personal' experience at all. Now I fully understand the disclaimers (which render the conclusions useless by definition) but if someone is going to publish research like this, which would be quite valuable if it were accurate, you would hope they would base it on a sensible and rigorous methodology - not slap dash inanity.

"Stop the presses - ISPs offer down load allowances that few is any of their customers ever get close to using." It's been done for over 6 years that I know of and is, effectively, the only way the major ISPs can differentiate their services and try to get as much money as possible for an ADSL service by "selling" a download allowance that they know will never be used by the majority of the buyers for slightly (or more than slightly in most cases) more money than they would charge for an allowance that would represent what the majority of users would actually use. Every ISP does it (they have to or they wouldn't get any customers if other ISPs do it). Does anyone think that a user would actually download 1 terabyte of data in a month? (except for a few 13 year olds who think they are somehow smart by trying to beat the 'record' for which of their no life friends can down load the most?)

Over the past five years the average amount of downloads per customer has increased each year - but not by that much. The cost of IP has fallen each year by more than enough to make the increase in average down load a non event in terms of general costs. the price of back haul (either owned or rented) has not fallen as much, for all the obvious reasons, but the IP cost decline has roughly balanced the overall equation. In Exetel's case, over the last five years, the average download per customer has increased from around 4 gb per month to around 15 gb per month.....or approximately 400%. In the same period the price of IP has fallen from around $250.00 per mbps to around $50.00 per mbps (much less if you meld the cost of actual IP with the cost of cached IP). The cost of back haul (we rent the back haul from our carriers rather than leasing our own back haul for our own DSLAMs) has fallen by much. much less than that of IP - perhaps 50% or so over that time from Optus and AAPT with back haul from Telstra not moving at all from its stratospheric pricing to us.

Over 40% of our current customers still download less than 3 gb per month. 2 customers download more than 400 gb per month, less than 200 download more than 200 gb a month and the others scale down rapidly from there to a point that over 75% of customers down load less than 15 gb per month........yet today our lowest included gb plan is 30 gb (excluding the zero download/PAYU plans which are only a tiny percentage of our total customers).

Why is this? Why doesn't Exetel offer 5 gb or even 3 gb per month plans?

I don't know but I suspect its a similar reason why people buy capped mobile plans  - it's because that's the way the sellers sell and therefore that's the way the buyers buy.

I don't think the referenced 'analysis' offers any insight and certainly no realistic figures as any form of usefulness - but I've asked some of the smart people within our company to see if they can.....meanwhile I will have a shower and go and see what I can find for a leisurely breakfast on the terrace watching the river traffic.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46