Friday, April 15. 2011More Interesting ChallengesJohn Linton We completed the Sri Lankan personnel and operational reviews today and in a few hours time will fly back to Bangkok for one day's r and r before returning to Australia at first light on Monday to ensure the month ends as well as we can make happen given the combination of Easter, Anzac Day and the school holidays and the disruptions they cause. I always enjoy my time in Colombo and I hope I contribute to the development of Exetel here. The growth of the company is evident in the simplefact that we have almost used up all the space that when we first moved in we barely took up a third. Similarly the complexity of the tasks now being undertaken is around double that of a year go. We have enormous challenges to achieve the targets we are aiming at for the balance of this financial year let alone the huge tasks in front of us up to December 2011. Assuming we manage to keep going at the current rates in our corporate and mobile broadband endeavours the current personnel in Colombo will reach around treble that in Australia - it is currently almost double despite the growth in corporate sales people in Sydney over the last few months and we will need the planned additional space in Sri Lanka almost right on schedule. Our major problem remains the development of supervisors and now managers which I made some progress towards formulating over the past few days and will 'flesh out' over the next few weeks. One of the highlights of the week back in Australia was one of our new 'batch of corporate sales trainees broke the record for completing her probation in less than 60 days (to complete probation at corporate sales at Exetel you need to make ten corporate sales) which broke the year old record set by one our super stars who herself is as good a corporate sales rep as any I've seen in a long career. The work also started in fitting out the new floor in North Sydney which is planned as a dedicated corporate sales/pre sales support floor for 48 personnel - assuming we continue to meet our targets. Exetel continues to be a very small company in any comparison with the companies we compete with day to day and even our recent 'growth spurt' means we only have 115 personnel in both countries. However we take business of all of the companies who are much bigger than we are (by any measurement) and it does demonstrate that personnel quality and total honesty in dealing with customers in all aspects of selling and provisioning is a very powerful set of attributes even in today's markets. The challenges that we face in continuing to grow our business all revolve around increasing the 'quality' of everything we do. Copyright © Exetel Pty Ltd 2011 Thursday, April 14. 2011Unlimited Data On A Mobile Service Re-Appears.....John Linton .....at least in the USA: http://online.wsj.com/article/SB10001424052748703551304576261191431583936.html which is surprising in that all of the US mobile carriers who had introduced unlimited data plans over the past two years had previously withdrawn them prior to the end of 2010. T-Mobile's latest offering is much higher priced that the previous offers from companies that had previously offered them and has the caveat that speeds will be slowed after the first 4 gbytes so it remains to be seen what actual amounts of data can be usefully downloaded and why this new attempt at the 'impossible' is being attempted by T-Mobile's new 'owners' so early in its acquisition. However it is a brave move against all US carrier previous experience where after withdrawing their 'unlimited' offers they all pretty much set their pricing at around $US30.00 for 2 gbytes. Exetel has been making slow progress in increasing sales of mobiles with data downloads and our current view is that we will continue to sell more new wireless/mobile services than ADSL services on a continuingly increasing basis - new monthly wireless services exceeded new ADSL services in March and wlil increase that 'lead' in April on current half month figures.That is not some sort of surprise result as the ABS figures for the second half of 2010 show the huge growth in wireless broadband take up versus the practically static 'growth' in ADSL. Exetel's figures are of course totally trivial in terms of the total market but they do represent the confirmation that the growth in residential broadband is very much in wireless - not ADSL. As a company that realised this would happen over three years ago (along with the thousands of other people with any knowledge about this business) we would have hoped to have made more progress than the trivial amount that we have made over that time....but we haven't and it has taken us a very long time to actually get the product offering 'right' - or at least 'righter' than our previous attempts. We have a very, very long way to go before we can be even vaguely satisfied with the monthly net adds we achieve but we have, for the first time in my opinion, begun to make progress towards that objective. Our near term objective is to move mobile/data sales to three times ADSL sales by August this year and to five times ADSL sales per month by December this year. While these objectives have a long way to go they are beginning to track that way and we now need to make far more efforts to bring these results to reality. I've said it before but few people agreed with me - the 'NBN2' was "planned" (and I use that word laughingly) based on Krudd and co's pig ignorance of the Australian communications markets. They assumed that ADSL would be the dominant residential communications 'tool' in their ten year build out time frame....no-one believes that now except the totally uninformed. Once more for the dummies - it won't be. Whether T-Mobile's latest initiative succeeds or not (I would think almost certainly not) the obvious fact is that mobile broadband will continue to get cheaper, faster: http://www.usatoday.com/tech/news/2011-04-13-comcast-broadband-speed.htm and become available in more places. While it may never gain 100% of the data user marketplace it will take a very big chunk of the lower usage marketplace that Stupid Stephen is basing his nonsensical 'NBN2' take up figures on. Seven years ago Exetel commenced in business based solely on providing residential services. Assuming the company lasts for ten years we will not be providing a single wire line based service by the end of 2013. Copyright © Exetel Pty Ltd 2011 Wednesday, April 13. 2011Distance Almost Always Provides Perspective......John Linton .....but it's a pity that it also forces you to see things much more clearly (or perhaps just differently) - and provides views of much darker nature. I suppose when you are always very, very busy and take your job very, very seriously over a long period of time you lose the ability to see things clearly. It is only when you have your daily routine so completely disrupted that you are forced to look at things differently and, based on my last two days, I have to say that I don't like what I am seeing and hearing. The reviews with various managers/supervisors in Colombo has been very useful in generally changing some views I had previously held and I think that has allowed us to make some very positive changes over the past two days. However I have also noticed a change in some people's positive attitudes to attitudes that are less positive and these, when 'delving' into the reasons appear to be based on less than acceptable treatment of SL personnel by Australian personnel which is being brought about by the continuing increase in interdependence between personnel in the two locations. I blame myself for the current unacceptable attitudes and behaviour I have very recently become aware of and see it for what it is. It appears that the dedication and abilities that have allowed Exetel to survive and grow over the period of its existence continue to be diluted as the company's personnel has increased and has allowed petty squabbling and other sheer stupidities of behaviour to become increasingly wide spread. It seems that Exetel is becoming more and more like the commercial organisations I have always despised - and has acquired a growing number of individual people who treat their employer as some sort of cash cow that will simply provide them with money in return for a lazy day of work in which their prime objective seems to be to disrupt the working day of others by any petty means possible. This has come as a surprise to me - again my fault - but I have obviously been deluded in what I have thought were pre-eminent characteristics of Exetel that allowed us to differentiate our small company from those companies we compete with. I don't know whether I am any longer, if I ever was, the right person to deal with what I am now seeing as it clearly didn't start 'yesterday' but has obviously been developing for some time. Perhaps the best solution is going to take time to find as for such a situation to develop has obviously been because of the way I have run and structured the company. Perhaps the best solution is to fire myself for incompetence and let the remainder of Exetel's directors run the company a different way. However that has practical difficulties in that 100% of the money that has been invested in Exetel is mine and I really don't want to hand control of that, to me, very large amount of money plus seven years work to anyone else. But I am truly distressed at what I now see and have to do something about it before the few 'rotten apples' in the barrel destroy the overwhelming good people they are currently negatively affecting. A very unpleasant view with which to start a new day. Copyright © Exetel Pty Ltd 2011 Tuesday, April 12. 2011Nothing You Do Ever Lasts Very LongJohn Linton I began the Exetel Sri Lanka review process yesterday which was made more difficult than it needed to be by the illness of the SL GM which prevented him from attending the office as he had acute laryngitis. However very little was lost as I re-jigged the review process to speak with the individual departmental managers and supervisors. As I have noted on several occasions when talking about the difficulties for any business in any country to find and develop effective managers the task is only possible at all if you have a basic recruitment policy of only employing very bright people and then giving them the opportunities to grow into management positions by giving them the freedom to make their own new decisions without curbing their boldness by 'punishing them' when they inevitably make very bad decisions. I lose count of the number of very poor decisions I continue to make each month and I am well aware that it is barely less than in the first months I was given the opportunities to make my own decisions. What I did learn very quickly was it was essential when I made a mistake that I didn't attempt to hide my errors of judgment but that I immediately sought out the best possible assistance in rectifying my error. Such assistance was rarely, except with one person, ever provided by my immediate line manager who, with that one exception, would not only have been of no help, but would have wasted precious time documenting what a fool I had been and how I should be 'punished' and how it was absolutely no fault of theirs I had got in to such a mess before telling me they couldn't help me. So it was unsurprising that the recurring theme in the reviews with different people here is an overt reluctance to make changes. I think it is more evident in Sri Lanka than in Sydney because of the restrictions we/I put in place from the beginning to prevent too many changes being made before the individual situations were fully understood and that view has persisted way past any useful interpretation of when and what changes need to made to documentation and procedures. I have tried to do something about this situation over the past nine months but have clearly failed miserably so far. I will complete the individual reviews with the remaining managers and supervisors today and will then attempt to find better ways of making progress in the future. Exetel SL's overall requirement is for the current supervisors and managers to exercise more direct control over their responsibilities and make more of their own decisions as they are the only people with a first hand knowledge of how the problems and issues change day to day and how changes in Exetel's products and services change and therefore how customer's needs and problems change. How I can assist bring that about is very far from clear to me. Having slept for almost twelve hours overnight I am hoping the remaining jet lag effects have been overcome and I can bring a clearer mind to bear on the issues. It is a major inconvenience of these short duration trips that too much time is spent sleeping or thinking about sleeping. Copyright © Exetel Pty Ltd 2011 Monday, April 11. 2011Back In ColomboJohn Linton
I started this blog entry thinking I was OK but I am struggling to keep my eyes open so I will have to finish it when I wake up....so a few hours later it's now the start of a new day and after tidying up my email I read this: http://www.itwire.com/opinion-and-analysis/beerfiles/46433-how-to-rein-in-nbn-costs which while it adds no facts to the 'NBN2' saga it served to jog my memory on a number of issues including the sheer silliness of a gullible electorate thinking that a bunch of scummy politicians could get remotely close to estimating the cost of such an expensive 'adventure' over such an enormously long time frame.Then there are the changes that Labor made to the legislation that wil cntinue to wreak havoc until they are changed: To while away some time during the long trip here I read P J O'Rourke's new book - "Don't Vote - It Just Encourages The Bastards" which, while aimed squarely at the total corruption and therefore the idiocy of US 'politics' is a mirror image of Australian, or as O'Rourke would have it, any 'democracy's political circumstances.His visceral disgust for the Democrats in the US makes my occasional despairing remarks about the Australian Labor party pale into faint praise in comparison. He wrote several chapters on various things a government, any government simply cant do and building major national infrastructures in competition with private enterprise was one of them. To put that in perspective his 'chapter' on government actions to prevent 'global warning' was barely one page and dealt with the issues in the first sentence which went something like - "There's not a goddam thing you can do about it". He then spent a few paragraphs stating the obvious that western countries would simply tax themselves out of existence while one third of the world's population (China and India) built as many more coal fired power stations and iron ore smelting plants as the west ever contemplated closing. All that would happen would be a wealth transfer between the USA and the EU to those countries. The Krudd/Gillard carbon tax initiatives are as stupid as the 'NBN2' initiative - they were designed to impress a gullible electorate in Krudd's three years of giant stupidities (whatever happened to the annual "ideas summit" by the way? Grocery watch? Fuel Watch? Do you want me to go on and name the other 35 gross stupidities swallowed up by the electorate?)) and Ms Faustus is trying to sustain enough belief in these two monumental stupidities to try and do what Krudd failed to do - make it through a first term in 'government' before her crass stupidity and naked hunger for 'power' is exposed. So, back to the 'NBN2' costings. The point is that 'NBN2' Costings is an oxymoron put in place because only a moron would believe that Krudd/Conroy could actually cost such a product in less than 48 hours during a few plane trips hither and yon. How absolutely daft does any person have to be to think that a couple of no nothing politicians could cost a ten year national infrastructure project over such a period (or any period by dozens of truly knowledgeable and competent people? Apparently the sort of people to whom the news that 13 major construction tenderers could get even close to the gubmant's conjured up guess at the cost. It's light now in Colombo so time to shower and got to work on something that has a true basis for execution and detailed costings to support the decision making - and no requirement to lose billions of tax payer dollars to prop up any egos. Copyright © Exetel Pty Ltd 2011 Sunday, April 10. 2011Lovely Day In Sydney.....John Linton ......pity we won't get its benefits as in an hour or so we leave for the airport to go to Colombo to do the quarterly reviews there. It's now a little over three years since Annette and I went to Colombo for the first time to start the processes necessary to set up a physical presence in Sri Lanka and we have returned every three months since that first visit. We are now relatively accustomed to the ways that business, and especially business with the government, there and are even used to the dreadfully maintained, narrow and just plain terrifying roads, the drenching rain or blazing sun and the distressing poverty. Basically all we take away with us is the smiling faces and unfailing politeness that have never been a feature of any Australian city I have ever lived in or been to in the 40+ years I have lived in Australia. Our company in Sri Lanka continues to grow quite rapidly (in our sense of that word) and the growth has been even more rapid since I last visited in mid January of this year. We are very near the end of the original three stages of setting up the Colombo operation which is at least 'neat' in terms of our original 'planning' and fairly satisfying in terms of the overall objectives of providing the highest quality of various services from Sri Lanka. Steve will need to return to 'finally' resolve the remaining support issues and make whatever changes that will require over the next month or so but well before the end of the third year of the company build program in July, all processes should be complete. After all this time, I still get questions about "sending Australian jobs overseas". I realise such questions do not come from very intelligent people but it still surprises me in 2011 how such stupidity can still exist - especially from people who seldom get up from watching their Korean big screen TV except to use their Chinese made PC to play their American games or get in to their Asian built car to go and buy their Mexican beer to drink with their US owned hamburgers or chicken wearing their Indonesian made clothes and shoes....you get the message.....it's called the international economy - stupid. When the ex COO of another much larger ISP dropped in for a chat the other day he asked me why Exetel had selected Sri Lanka rather than the Philippines where the costs were the same/similar, it was in Australia's time zone and the availability of 'trained call centre staff' was infinitely greater. He was obviously basing his question on the decision his ex company had made which seemed to be based on a cursory comparison between "Mumbai and Manila". I gave my reasons, which I won't bore you by repeating and we both agreed that, apart from anything else, it was the impossibility of retaining dedicated and competent people in Australia to provide call centre technical services that was the 'trigger' that lead to looking at providing those services in other countries where a call centre job was not regarded as something to be done while the person looked for other employment. We both, like so many other people in so many countries around the world in so many industries, would not consider using Australians to provide services to other people - it is not a sensible 'cultural fit' for any business employing more than a few people. Copyright © Exetel Pty Ltd 2011 Saturday, April 9. 2011A Week Characterised By Even More Lies Than Usual......John Linton ....by the usual suspects....the Labor federal government...the skankier companies in the telecommunications market.......the media generally. The two resignations from the senior 'management' of the 'NBN2' demonstrated that Stupid Stephen, Ms Faustus and Krudd have been engaged in massive deception of the electorate which should not surprise anyone except the truly stupid: You don't have to be Einstein to work out if the head of contracting and the head of costing both resign after 'NBN2' announces it can't find a tenderer to build its proposed network at the price it has publicly announced (which was based on saving Krudd from being exposed to the consequences of his election lies and was completed in a few hours on the back of an airline sick bag) and the two people within the 'NBN2' most closely associated with delivering on those lies then resign that those public lies are about to become exposed to the general public. So, once more for the dummies, the 'NBN2' has not been planned at all and all estimates as to time frames and cost were wild guesses aimed at getting federal Labor a second term in government which, thanks to the stupider sections of the electorate and turn venal hayseeds was sort of accomplished. Now, after 4 years of 'politician based lying, some real indications of what this Krudd ego trip may cost are becoming to be exposed to reality - and, lo and behold, they are not a pretty sight. Stupid Stephen in his inimitable stupid style makes a statement that "there will be no increase to the "budgeted expenditure to build the 'NBN2'. I wonder if that will finally see the end of him? I mean, even for a Labor union thug - just how many outright lies can you tell before you have to go? The other piece of total fiction came from those master practitioners of obfuscation and straight out delusion Eftel who crowned a career of insane statements about the 'health' of their penny dreadful company with this masterpiece of agglomerated just plain untrue or totally misleading statements: http://asx.com.au/asxpdf/20110408/pdf/41xxz9f8snphj8.pdf Virtually every single sentence in this, mercifully, short "announcement" just isn't true or is phrased to mislead. For some years EFTel has claimed to be "a top ten ISP". If EFTel are a "top ten ISP" (even after the relatively recent take overs of Westnet, Netspace, OzEmail, Soul, PeopleTelecom) I wonder where Telstra, Optus, TPG, iinet, iPrimus, Internode, Dodo, AAPT, Adam, M2 and even Exetel rank? And they are just the companies that immediately come to mind. Other statements relating to number of customers and revenues are simply fiction and if a combined company revenue of $A50 million per annum (and in the case of Eftel years of operating at a loss) actually supports 300 employees then it is a true financial miracle.This is nothing more than the fire sale of the distressed assets of a small, very badly managed group of failed ISPs masquerading as some sort of entity. For just one example of the lies in the "announcement" look at this piece of careless 'media' reporting of the answers given to some follow up questions: http://www.itnews.com.au/News/253883,clubtelco-initiates-reverse-takeover-bid-for-eftel.aspx Reading John Lane's comment: "My view is we'll probably need significantly more than [the 120,000 of Just how many ADSL customers is he implying that this new combination of money losing companies actually has? It seems to imply 120,000 (which would obviously contradict the weasel words of the ASX announcement) but the real number is less than 40,000 - a lot less. So much for the level of truth in this industry and in the careless media that offers comment on it. Copyright © Exetel Pty Ltd 2011 Friday, April 8. 2011Good People In This Industry Always Change......John Linton .....bad people remain exactly the same no matter how much time passes. It has been a busy week so far with very 'full days' but little to show for the work I have put in. Fortunately the work put in by many other people in Exetel has been far productive than mine. It seems to be a characteristic of weeks before I go to Sri Lanka that I try, and miserably fail, to get through everything I have to do to ensure there are no loose ends before attempting to do an extra job with the inconvenience of doing my 'main' job with a 5 hour time difference in the coming week. I think it's getting much closer to my personal use by date. Probably the highlight of the day was when I dropped in yesterday morning for 40 minutes or so on a chat between Steve and the recently ex COO at a larger ISP who approached us (after he left his former employer) to see if there was something he could contribute to Exetel. Both Steve and I knew him from years ago when Steve employed him to help him build out one of the early ISP capabilities and 'national' data networks. He had been there ever since which must be around the best part of fifteen years and I was very surprised that he would be interested in participating in a company of Exetel's size. However, next to Steve, he is probably the only other 'engineer' I have ever seriously respected over my career in this industry so I was interested in participating in the conversation. The conversation was very interesting if for no other reason than getting a first hand view of the current and future residential communication markets as seen by a senior manager of a large competitor. Not that the views of anyone in such a position are going to differ in any major way from the generally held views (at least those of sensible people) that are widely available. So I asked my questions and enjoyed 'catching up' and let Steve get on with the discussion as to what Exetel might be able to offer. I think the conversation ended up very positively and when I 'discussed' it with Steve yesterday evening we might be able to reach some sort of agreement on a mutually enjoyable, and profitable, engagement. The only other sensible contribution I made to the business yesterday was to work out what to do in terms of the $A versus the $US and the dependence the LKR has on being tied to the $US. We have gained a significant 'wind fall' advantage over the past year as the $A has appreciated against the $US (and therefore the LKR) by over 30% in that time. This has allowed us to add over 20 personnel in Colombo but not increase our monthly operating costs - in fact our SL costs have slightly fallen over that time. While that has been very positive for us it obviously raises the question of how sustainable the current exchange rates are over the coming 12 months and beyond. We looked at 'forward buying' $US and may still do that as the insurance that provides makes it easy to plan - however it is at a significant cost. While tending to err on the side of caution these days when I looked at all the numbers and digested the opinions of people with far better knowledge than mine on such matters (none) I will recommend that we not forward buy but make the assumption that if anything changes it is likely to be a continued appreciation by the $A. It doesn't sound much but even at our relatively low volumes it could be a swing of $A300,000 a year either way. I enjoyed business 'life' much more when I was only involved in sales. Copyright © Exetel Pty Ltd 2011 Thursday, April 7. 2011Market Regulation - Some Strange ViewsJohn Linton Australia's ACCC seems to have few friends either in business or in 'consumer land' if media reports and court judgments over the years are anything to go by - and given its track record that is unsurprising. That probably made its recent decision to mandate that Telstra had to lower its PSTN rental costs on some PSTN changes remarkable which was why I commented on it yesterday. Last week I had read a report about the UK telecommunications 'regulator' saying it was going to force British Telecom (the UK former government telecommunications publicly owned monopoly since sold off to private investors) to progressively lower it's PSTN line charges each year for three successive years: http://www.telegraph.co.uk/technology/broadband/8419444/Broadband-prices-to-fall.html which seemed, at least to me, an extraordinary thing to do. The charges BT makes for residential and wholesale lines are so much lower than Australians can ever dream about it seems an unnecessary aspect of pricing but presumably it is based on some EU pricing regime. The more interesting aspect of this short article is the presumption that a government agency could ever determine what should be charged for any service - particularly a service that is provided by a sold off public utility that, when it was owned by the government, established the pricing models under which services were provided. I know this is the case in Australia too but I have never agreed with such actions personally as the only mechanism that enforces them is totally unskilled and lacks even a basic knowledge of how telecommunications services are delivered. In our country it is interesting to see the ongoing pursuit of "one law for them and another law for us" in that the enabling legislation specifically excludes any 'oversight' of NBN pricing by the ACCC. Why is that? If the 'gubmant' thought that the Telecom Australia monopoly (when consigned to private ownership via the Telecommunication Acts of 1997/2006) needed that enabling legislation to specifically include ACCC oversight why is the reverse situation now the case. Why doesn't the new universal monopoly require any pricing oversight?....because we're the government and you can trust us? I suppose it is in line with the current announcement that 14 separate tenderer's bids to build the 'NBN2' are unacceptable and now the tender will be awarded to a 'friend of the government' via secret negotiation. I cant help but wonder how much money was paid to 'right' people for that piece of chicanery to take place? Or maybe it's really all straight forward and above board and some persons have saved the Australian taxpayer from being ripped off by 13 other construction companies? We live in strange times that we have brought on ourselves - well at least they were brought on ourselves by a couple of venal hayseeds that betrayed the people who voted for them and a woman who sold her soul. Copyright © Exetel Pty Ltd 2011 Wednesday, April 6. 2011ACCC Provides Some Interesting Input......John Linton ......to the ADSL pricing 'models'. Exetel has never been able to offer even vaguely attractive pricing for telephone line rental other than on its Optus services which have fairly limited coverage (400 plus exchanges mainly in capital cities and large regional centres). Telstra's pricing to Exetel (and most other resellers as far as I know) for telephone line rental was always too high for us to be vaguely attractive as a supplier of telephone services other than on Optus enabled exchanges. The ACCC's decision to reduce the maximum price Telstra charges resellers for a telephone line from whatever they charge today to the maximum they have announced of $22.00 (ex gst) is quite significant. To date, as far as my fading memory allows, the lowest 'retail' line rental is something like $21.00 for "home line budget". Perhaps I'm wrong but whatever the actual price is the ACCC's ruling, assuming Telstra Wholesale actually charges us the mandated rate, is roughly equivalent to a 25% reduction in current costs. Doubtless every reasonable telephone line seller will, or already has, reduced their line rental prices and has adjusted their call charges in various ways. Telstra Retail has been bundling line rental with ADSL and mobile for so long it will be interesting to see what, if anything, they now do. Exetel decided to offer Telstra telephone lines from early April and we must now 're-jig' our Telstra and AAPT based ADSL services to use this new pricing most effectively. We had been basing this service on a pricing of $30.00 for the telephone line rental and will have to change that today to something much more competitive. The options of how best to use this cost reduction are not clear to me at the moment and will need some inspired input by other people to allow us to gain maximum advantage from this surprising source of beneficience. It seems odd in these sunset (almost below the horizon) years of PSTN services to be contemplating for the first time a major 'marketing' campaign to offer telephone line rental as a 'positive' reason to use Exetel residential ADSL but that is the strange position we now find ourselves in. A combination of the Telstra cost reduction and 'profits' from calls made would, before the number crunching is done, allow for something like a $10.00 monthly cost reduction on a combined ADSL/telephone line rental service....depending on how 'brave' we are prepared to be or, more obviously, how brave our competitors will force us to be.It is likely that we have to move very quickly as doubtless in these bleak times other larger ISPs will see this as a 'Heaven' sent opportunity to improve their various offerings although they may be reluctant to give up the windfall profits this ACCC mandated reduction delivers to them. As Exetel has no customers using Telstra telephone line services, we don't have that problem. So, we will have an internal discussion in an hour or so and try and put new plans in place before midday today. The timing is 'perfect' as we are about to begin a 'campaign' to offer telephone line services to the large percentage of current Exetel ADSL customers who don't have them and we will also now modify offerings to new customers. We have been updating our 'research' on what the main telephone line renters offer in terms of both line rental and call charges and that, as usual, has proven difficult because of the ways that charges are presented. It will be a busy morning for quite a few people. Copyright © Exetel Pty Ltd 2011 Tuesday, April 5. 2011Just What We Need Right Now.......John Linton ....a new entrant to the ADSL residential market. I spent a couple of hours yesterday afternoon with a company that is looking to do some sort of business with Exetel based on their marketing and advertising clout and 'go to market' capabilities in a semi related field to residential communications. We had a conversation some months back but for all sorts of reasons neither of us pursued the opportunity. He called up last week and asked to continue the discussion with some people he does business with in China who he has known for a long time buying many of the products he currently sells. As I am running out, have run out, of any sort of ideas for new approaches to the residential marketplaces in Australia I welcomed the opportunity for fresh input. The people I met with were very bright, very knowledgeable and very young - at least they appeared that way to me. It took very little time for me to reach a view that they were very well briefed on the Australian communications marketplaces and even more well briefed on the various companies that operate in them.Their own ideas of how to approach various different marketplaces were similar/the same as several companies we have talked with in the past in that they were based on mass retail via the established chains supported by large amounts of advertising money. I have no knowledge of how this marketing approach works but I assume it must as so many people use it. In any event they were very certain they could make it work here and as it wouldn't involve any input from Exetel I was content to let that be a base assumption. What I had trouble understanding was why they wanted to talk with a company of Exetel's size to provide either the products/services or the infrastructures/back end services as their 'brochure' indicated they had all of these capabilities themselves or could, given their size, easily approach one of the carriers for a wholesale contract. Their answers to my very direct questions (and I tend to be a very direct person) didn't make any sense to me - and I asked them in different ways several times. While I was happy enough to discuss any aspect of communications in Australia I assumed, after the first 45 minutes or so that their objective in having the meeting was to add to their knowledge and that it wasn't remotely likely that they had any real interest in doing any sort of business with Exetel as their simply was no 'fit'. After the 'politeness part of the meeting' was over their questions all related to detailed pricing of the various components of infrastructures required to deliver different services and how they had moved over the past years and what they might move to over the coming years. They were also intensely interested in how our SL company was created including time frames and costs and how we 'solved' the language problems. As they were such nice people and so stimulating to talk to I was happy enough to be 'fooled' into providing as much detailed information as they asked for....although I might not have been as strictly truthful as I may have seemed. I have absolutely no problem in sharing what little I know with anyone on any sort of reciprocal basis but I don't think this particular meeting met anyone's definition of reciprocal. One surprising thing was that many of their questions were based on various blog entry comments I had made going back over two years and one of the people said (probably only in conventional flattering style) how much she enjoyed reading my blog every day back in China and that she recommended it to many of her business friends.....as I said...she knew how to flatter to get information. However that was definitely not their only source of Australian information as they knew the names of the companies that we were currently talking to about various visp type services and even the stages we had reached....how they knew such information is not easy to work out. I managed to learn a few things about their business and about mass marketing generally and its always really enjoyable to talk to very sharp minded people - even if they do take you for a fool....that is happening to me so often lately perhaps I really am as foolish as so many people take me for? Copyright © Exetel Pty Ltd 2011 PS: The 'NBN2' begins to stink: http://www.itnews.com.au/News/253443,nbn-co-tight-lipped-over-flannigan-departure.aspx Monday, April 4. 2011Daylight Saving Rolls Around Again.......John Linton ....... as yet another reminder that time continues to defy the laws of physics and continue to go faster and you never have enough of it to complete all the things you really need to do. I have a particularly busy week as we will go to Sri Lanka to do the quarterly business and personnel reviews at the end of this week as it seems that 'going away' generates more need to do more 'just in case'. Perhaps it yet another difficulty imposed by advancing age that there seem to be more things to do each day or perhaps its simply that it takes an aging mind longer to do things than it has in the past.....but I seem to be viewing the work to be done in any given day with less enthusiasm than in the past perhaps because as Exetel has continued to grow there are just too many things to do in any 'working day'. Even though I have 'off loaded' a considerable amount of things I used to do over the past year or so I have not seemed to have any more time than in the past. Whinging about it, either here or anywhere else, isn't going to do anything positive so I apologise for that. I think my feelings have a very 'concrete' grounding in current market conditions that are affecting me just as I think they would be affecting many other people in this business. In terms of actually operating a business like Exetel in the current conditions that seem to permeate the industry there has been a sense of uncertainty for so long that I actually can't remember a time when conditions seemed to be so difficult over such a long time. I think this is being compounded by the fact that almost all the companies that operate in this industry have ever only known 'good times'. If you think about it this current phase of the communications 'industry' has only been in existence for less than 20 years. In 1990, basically only Telecom Australia offered communication services and the internet existed for a very few people in terms of 'bulletin boards'. The fact that there was only Telecom as a provider of communications services meant there were no other options and until the Telecommunications Act was actually passed the companies that currently offer telecommunications services, with the exception of Optus, did not exist. So the current telecommunications companies only began to 'appear' in the early 1990s and almost all of those 'start ups' have long disappeared. However a fortunate few have survived and prospered via a roseate business climate that has seen only 'limitless' growth. First in dial up internet which was followed by the transition to ADSL concurrent with the phenomenal growth of mobile services and then VoIP - 15 years of ever expanding markets and huge revenue growth year after year. It was an industry that just grew and grew with an, apparently, ever more rosy future....until quite recently when everything changed. Three things happened. Firstly, Telstra 'changed the rules' by no longer providing sky high priced services that allowed every other provider to use their pricing as an umbrella under which they were content to make their own huge mark ups and therefore disproportionate profits for very little effort, or more importantly, any level of real management skills. Secondly the federal government announced it would create a new monopoly. The third event was that the booming growth in new ADSL services came to a screeching halt as market saturation arrived. So now the 'managements' of today's Australian communication companies are confronted, for the first time, with markets that are no longer growing and with a current dominant competitor that no longer provides a pricing umbrella (quite the reverse) and a future dominant monopoly supplier that completely changes the 'competitive' landscape now even though it will not be deliverable in any quantity for some unknown length of time. These changes will need to be dealt with by company managements that have never operated in any markets other than ones that expand rapidly and with a dominant supplier that, because of its market share, chose to make it easy for any market enterer to establish and grow a viable business. Today the requirements to succeed are very, very different and the degree of difficulty of operating a telecommunications company in Australia has become at least a magnitude harder....and the management of the current communications company have never experienced such conditions. If this jaundiced view point is even partly correct it would explain many of the actions currently being seen if you are inclined to look at the various scenarios that have developed over the past two plus years. I am getting the feeling that 2011 will see more changes than the past two years combined and none of them are positive. Copyright © Exetel Pty Ltd 2011 Sunday, April 3. 2011When Does An Economy Reach The Point.....John Linton .....where things are just too tough to continue? Times are tough all over according to people I have talked with over the past week or have a close second hand appraisal of other circumstances. The three major inputs for expressing that view have all been fact based in key areas of the NSW economy. My youngest daughter, after five years of a steady if unexciting job with IBM, bought a unit last week prior to its auction date and for less than the agent had said would be required. After she had been looking around (with avid support from her mother) it had become apparent to her that few if any of the asking prices of properties were being achieved and while no real estate in Sydney can ever be described as "cheap" the prices were at least becoming more reasonable since she bought her first 'shoe box' for what seemed to an unknowledgeable person like me to be an extraordinary large amount of money - but that was back in the days of the first home buyers grant whch was causing real estate price inflation at the bottom end of the market. The second 'fact' was the pricing for new cars. Both Annette and I have had our cars for years longer than has been a lifetime habit of keeping such things and have been looking at trading them in on a very disinterested basis over the past year or so - never seeing any point in using up good money to replace cars that were continuing to do a more than adequate job despite their advancing years. A few weekends ago we decided that 8 year old cars driven almost exclusively in woeful traffic conditions on roads that would be at home in a third world country town were showing more and more signs of requiring expensive 'maintenance' and we should do something sooner rather than later. So, thinking we could probably get a better deal by buying two cars at the same time we visited the brand of our choice and began the painful process of 'negotiating' a "deal". I have always taken the approach that it's easier to simply take 15% off the 'list' price and pay no more than that or, more recently simply go to a broker with the detailed specs and ask for a price that will turn out to be 20% (at least) lower than new car list price. I was surprised that this time the pricing offered by the least preferred of the dealers was around 17% off list with absolutely no 'negotiation'. I will be interested to see what the broker pricing is but it seems to indicate that new car sales are more than a little slow at the moment - if only for this particular manufacturer. The third 'fact ' was from our bank manager who continues to try and 'sell' us loan funds. During a telephone call last week he effectively said that the bank was experiencing more trouble than in the past year or so with their small business loans in that defaults were growing and the only business loan applications they were receiving were from companies that didn't meet their loan requirements and their current 'good' loan customers only wanted to reduce their loans and weren't interested in borrowing extra money but were reducing their current loans. We couldn't help him because we have never used the loan facilities we already have in place let alone borrow more money. So three 'concrete' indications that in NSW business conditions are more difficult than they have been albeit from one family's personal experiences. I wonder what the real situation is? Copyright © Exetel Pty Ltd 2011
Saturday, April 2. 2011An Interesting MonthJohn Linton As previously mentioned the highlight of the month was reaching a new record high for business data services with 117 new links added in the month - breaking, by a long way, the previous monthly record and exceeding 100 new links in one month for the first time. We also had a record SMS over IP month, a record Fax over IP month and a record mobile month. Only business VoIP and residential wireless broadband and residential ADSL recorded 'average' results. So the month ended up pretty much as planned which is always a bonus and the third quarter of the financial year exceeded the overall financial targets. The depredations of Telstra Retail continue but at much lesser volumes than last year signaling that their 'give away' budgets are running out and/or our customers are finding their offers less compelling compared with Exetel's current offerings. The loss of customers to TPG has also almost dried up with more ex-Exetel customers returning to Exetel than churn away to TPG most days. It's impossible to know what performance another company delivers over its network but the indications of the numbers involved plus the anecdotal comments by the 'returnees' seems a pretty consistent view that the TPG ADSL service is both heavily congested and that the support services are truly awful. In any event there is far less churn away to either Telstra Retail or to TPG than at any time in the past two plus years. I thought the ABS figures were interesting in a number of ways (all the usual caveats apply): ...the continuing rapid growth of wireless broadband and the 'stagnation' of ADSL being the obvious indications. It seems that in three months time wireless broadband connections will exceed ADSL connections for the first time. Shortly after that Telstra will begin to deliver its LTE services in an ever growing service area which are likely to provide better than ADSL speeds at prices that are likely to be less than ADSL when the lack of needing a PSTN line is taken in to consideration. This combination will not address the small part of the market that thinks 'unlimited' downloads are the way to go but I suspect that it will become very much more attractive to the 60% plus share of the market that downloads less than 10 gbs per month. If you owned shares in the 'NBN2' you wouldn't like the latest ABS statistics.... .....and speaking of government meddling in commercial marketplaces I was a little bemused by this article in the UK Daily Telegraph last week: http://www.telegraph.co.uk/technology/broadband/8419444/Broadband-prices-to-fall.html There is not enough detail to really understand the impact of what is being proposed but it seems to be a fairly draconian approach to 'regulation' and gives some whiff of what is to come should the 'NBN2' become a viable service. The amount of regulation that is foreshadowed in this article is directly reflected in the nastier bits of the enabling legislation for the 'NBN2' - except of course in Australia it is much easier to do because here we will have a government monopoly rather than an ex-government monopoly. We continue to make some progress in selling residential ADSL services via 'visp' arrangements with three different, quite large, organisations who, all for different reasons, don't want to go through the pain and expense of setting up the sorts of infrastructures (both networks and support and the systems that support them) and the time that takes to supply such services. It will be interesting to see just how/if these ventures work out over the coming months but if there are any positive results it will indicate yet another option/opportunity for delivering residential services in the future. We have the two best month's of the business year coming up and a truly solid March quarter is a good indication of a strong finish to what has been a more than extraordinarily difficult year. Copyright © Exetel Pty Ltd 2011 Friday, April 1. 2011"Soaring Costs Halt Tenders For NBN"John Linton .....was today's front page head line on the 'paper' version of the SMH though it's not on the web version so I can't provide the detail....(thanks to a reminder from BS the link is now up:) http://www.smh.com.au/business/soaring-costs-halt-tenders-for-nbn-20110331-1cnl3.html In essence it is reporting that NBN has halted negotiations with all tenderers and, at least in the article, cited no process/time frame to re-start them. I suppose the only surprising issue is that it is head line news that a government expenditure estimate has been deliberately under stated or the sheer pig ignorance of the person who 'bus ticketed' the costs to cover up his election lies (Krudd) has simply been shown to be the liar he has always been. The cost of any major project will always, by definition, be grossly under stated as will the time frame and the end benefits will be grossly overstated - Labor politicians = serial liars...they always have been and always will be as they constantly choose to make grandiose promises without reference to their departmental research or even common sense (who can ever forget such grandiloquent nonsensical gems of Labor lying as "No Australian child will live in poverty.....") So, apart from all of the other lies on which the 'NBN2' is based the first "costing difficulties" have appeared. Of course these costing difficulties are all the fault of the greedy and price gouging contractors and current labour shortages caused by the ongoing WA mining booms. If you believe that 4 or 5 major construction companies have colluded to pitch the tender responses at unreasonable levels or that the government of the day of the country were unaware that there was an ongoing drain of construction resources going on in WA then I guess you exactly describe why there is still a minority Labor government in charge of looting this country....it's because the electorate contains a higher than average number of 'stupids' than at any previous time. Does it really matter? No. For those idiots that thought it was going to be possible at all the end price is irrelevant. They don't consider such things as cost or delivery times being solely based on a egotistical politicians lies being remotely important just as they believe the nonsense of "fast internet" for less than the cost of ADSL and all the other nonsense that has been spruiked since the start of this fiasco. What you could find amusing, if you don't find it alarming, is the increasing amount of comment in the business press of who will buy up the partly completed NBN when it eventually becomes clear that it is not only going to go massively over the current cost estimates but that it won't go close to delivering on Krudd's and his successors lies. The articles I have read to date all point out that Telstra will be the only company interested and financially capable of taking over whatever has been built to the date of abandonment at a fire sale price and even the dummies should know what that would mean. Of course, such talk is totally speculative but the incredibly sad fact is that is being talked about at all - and so incredibly early in the project schedule. What's really going to happen? I certainly don't know but Labor politician's legendary lack of financial abilities to "run a chook raffle at the pub on a Friday night" comes to mind. Oh well, back to the real world of actually trying to run a communications company in Australia today rather than unthinkingly wrecking the whole communications delivery structure in some lying ideologue's fantasy world tomorrow. Copyright © Exetel Pty Ltd 2011 PS: Latest ABS figures released today: |
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