John Linton's Personal Musings

John Linton

....'little people' always get trampled by big people in any dispute.

One of the enduring naiveties of media reporting on communications services in Australia is the media commentator's almost childish lack of understanding about how large commercial companies and government institutions operate and the calibre and ethics of the personnel employed within such organisations. It may be an exaggeration to say that to succeed in such organisations a person needs to have had surgery to remove any aspect of fair dealing but it seems to help career progression in many large organisations I have dealt with and been employed by over the years. So I found this:

http://www.itnews.com.au/News/258715,opinion-the-nbn-must-end-the-telco-blame-game.aspx

as a quintessential example of my view that media commentators are naive to a point that makes their views on what is a quasi monopolistic industry that involves government regulation completely irrelevent.

I am not saying that the communications industry in Australia is alone among Australian industries in having these characteristics but it is one of the few that, over time, have attracted the very worst examples of naked greed and uncaring attitudes that go beyond whatever you regard as the next most predatory group of companies and regulators. So the 'NBN2' is going to, somehow against all logic and previous experience, be somehow better than all other communications suppliers in the history of federation? And you believe that because.....well there is absolutely nothing to suggest that a new monopoly will act any differently to any other monopoly that has existed for the past 4,000 years for the simple reason that monopolies have no reason other than to act in the best interests of the people they employ (the people they employ make all the decisions with no counter balance of a competitor) - which is never in the best interests of the people they 'serve'.

The cited article took up the "you must agree never to blame us for anything we do wrong" clause of the 'draft' 'NBN2' wholesale supply contract. That single, ludicrous, clause sums up a monopolist's attitude to everything and foreshadows the nature of the future services they intend to supply - before any infrastructure has been put in place. It obviously means that the 'NBN2' has no intention, from the very start, of actually delivering services that will consistently meet the base standards wholesale suppliers expect and every wholesale customer must give up all rights to redress for such non-delivery. Welcome to Labor's new monopoly. However it is far more serious than that.

It demonstrates the sort of people and their mind sets that are being employed by the 'NBN2'. What sort of person do you think that might be? Do you think they are people that, beyond the commercial or technical skills they have developed along the way, are going to be more interested in delivering the best possible service to their customers or are they going to be people who are going to be totally interested in delivering the best possible remuneration to themselves? Toughie....but the first desire to control the quality of the service with the draconian “must not… criticise or attribute to NBN Co any fault or blame in connection with Customer Products.”  - there is a pretty clear indication that customer satisfaction isn't high on any KPI within the organisation.

So it isn't the clause itself which is the real problem. The real problem is that the new monopoly is being built out of people that hold such views as being of pre-eminent importance to protect themselves from what they know will be the results of their inherent laziness, sloppiness and don't give a damn about anybody but themselves attitudes. Tell me how it can be looked at in any other way?

PS: Is this the record for an ISP opening and closing in the shortest time. "Lots of second hand Cisco equipment"? Reminds me of a similar approach.

http://www.itnews.com.au/News/258978,fortana-internet-services-back-online.aspx

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

I read an article yesterday (which was in print so I cant cite a URL) concerning the changing attitudes of the current generation to work versus their personal lives. Like all such articles it generalised because it is clearly impossible to particularise on such a topic and, obviously, no research could actually be done that would be possible to provide any sensible 'statistics'. However this article was in a reputable business publication and was by a pair of reputable academics - at least as far as I could judge. The thrust of their writings was that 'Generation Y' was totally different to the 'baby boomer' generation and 'Generation X' in their attitudes towards their jobs and careers than those two previous 'generations'.

They were putting forward the view that 'Generation Y' was far more relaxed about getting a job and retaining it let alone building a "career" than previous 'generations'. This was a US based article so it may not have any relevance to anywhere else but it was well written and relatively cogently argued in as far as it could be. Personally I have serious reservations as to whether the overall attitudes of people starting their working lives in the mid sixties is recorded anywhere - principally because no-one at that time would have thought of trying to analyse it. I am not going to use my own personal experience to extrapolate from as my personal circumstances were very different to the overwhelming majority of other people of my age that I knew at that time.

The article claimed there were significant differences between the attitudes of people joining the work force today and those of the previous two generations. Ignoring that this claim is based on no rigorous research but on interviews with some 3,000 people (approximately 1,000 from each 'generation') it is highly subjective and subject to 'memory modification'. Obviously the clearest recollections were from 'Gen Y' and perhaps this caused the writers to believe there was a significant difference. Their overall conclusion being that previous generations were far less 'adventurous' and far more easily satisfied to stay in jobs that didn't bring them fulfillment than the current generation was prepared to accept. They cited very low first and second job lengths of employment as 'proof' of this view as well as the comments of the interviewees that were all along the lines that most 'Gen Y' responded that they were not concerned about developing a career until their late 20's/early 30s when they would have a better idea of what they might like to spend significant time in doing.(there were no doctors, lawyers or accountants in the group interviewed).

As an 'employer' I found the results of this article worrying to some degree. I don't think it is really any different to anything that I have seen over my time in business. I would have liked to have seen two, in my opinion, very 'telling questions' in the survey. They would have been:

1) Do you currently live at home with your parents?

2) Do you plan to buy your own 'home' in the foreseeable future?

I think the answers to those questions would have explained the attitudes to 'careers/jobs' better than any of the extrapolation that attempted to do that in the article. It's always important to check any opinion given concerning making better employment decisions. Obviously employing 'good' people is the essential requirement for any company to remain in business - let alone grow. Interviews are the only opportunity of gauging the likely success of the applicant both in the short and perhaps, the medium term. The better questions asked within this brief period the better the hiring 'decision' is likely to be. I don't think this particular article helped in that way except to make the point that such people write articles without any factual evidence for their opinions and, certainly in this case, no possible personal experience of what past 'generations' of people commencing their working lives may have had in mind at that time.

PS: For those who are interested in a digest of the recent LTE forum this is as succinct as I've read:

http://technologyspectator.com.au/nbn-buzz/nbn-must-face-wireless

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

A bit blurry eyed from watching the soccer much earlier this morning. A mesmerising game which was only ever going to have one result in retrospect but which, at least for the first half held out some promise of an upset....not to be. There's always next year. Well...lets hope so.

One of the things that has been exercising my mind as we look at what we might do next year is to return to the way we started - and, yes, I do remember what an unmitigated disaster that became of that. For those that don't know what I'm referring to Exetel started providing ADSL services in collaboration with another start up company because at that time Telstra Wholesale had a 'published' wholesale price that gave significant discounts at 1,000, 3,000 and 5,000 ports per month. The price drop at 1,000 was about ten dollars or so in those early days which was a great deal of money. The next two price drops were not as great but they made a huge difference to the viability of a start up company's ability to make any sort of profits.

Unfortunately, for all concerned, only one company could have the contract with Telstra Wholesale and that wasn't Exetel so 12 months later as Exetel was beginning to 'boom' (relatively speaking) the other company behaved despicably and nearly drove Exetel out of business and indeed it took us a long time to recover from their actions. Justice was served by that company going broke shortly thereafter. The scars are still very fresh and I never expected to be contemplating a similar scenario some six years later - but I am. The reasons are the same as they were in late 2003/early 2004 - Telstra Wholesale is selling ADSL ports to some/all of their wholesale customers at prices that are ten to thirteen dollars less a month (more than likely lower than that for all I can tell) than they are to Exetel.

I have no problem with Telstra Wholesale selling to other companies, with which Exetel competes, at whatever prices they deem to be in their best interests - that is entirely their decision. However the fact that they do means that Exetel cannot offer Telstra based ADSL services and remain in business. Again, not a problem, if any commercial entity can't compete in any market then it should get out of that market while it still controls its own destiny. There are only three scenarios as far as I can see. Firstly we could keep providing Telstra Wholesale ADSL services at competive market prices and make a loss on doing that - very unattractive proposition. Seconly, we could 'sell' our Telstra Wholesale provided services to another ADSL provider that buys at $10.00 - $13.00 less than we do who could continue to provide the services at our prices and make a profit.....sensible for us but maybe not so highly regarded by at least some of our customers. Thirdly, despite our experiences of April 2004, we could buy the services currently provided by Telstra Wholesale through another company which (like the old arrangement) may allow both companies to buy at a lower price from Telstra Wholesale.

A dangerous arrangement for many reasons that are immediately obvious and for a whole lot more that would soon become apparent. We have had two approaches  to do something like option three over the past 12 months but the companies making the approaches have not been very different to the original company which nearly ended our existence all those years ago. On Friday of last week it occurred to me that there was an option to taking the extreme risks involved in such a decision and while watching the soccer earlier this morning it occurred to me that there were possibly two 'versions' of option three that had far less risky than the options we have currently been presented with.

The risk of 'buying' services through another company, as fully demonstrated in April 2005, is a major, major deterrent. However if that risk can be eliminated by buying services through a totally trustworthy company then the 'risk' elements are eliminated and the price advantages are achieved. Simple really.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

We, pretty much, completed the work on residential ADSL offerings yesterday and, courtesy of our carrier providers, have improved the value proposition of all plans for all levels of usage quite significantly. These new plans saw an immediate 'boost' of take up of the Telstra plans but saw a dramatic fall in the take up of Optus plans - a truly puzzling result when you consider the plan costs became lower and the included downloads became higher. It was a totally unexpected result of baffling proportions. We will obviously have to re-present the Optus plan proposition because this current result defies all logic that I have ever seen used in this business. I think it is the most unexpected result we have ever generated from a plan change.

Some time over the weekend we will have to find a different way of presenting the pricing of those plans but, right at this moment, I don't know where to start. Perhaps the 'scummy' nature of their presentation was a step too far and much too radical for a conservative company like Exetel? In any event we will need to make some significant changes to try and correct the current major negative results. Perhaps we need to offer free months instead of rock bottom monthly charges?

We continued to see an increase in mobile sales and, perhaps, more significantly the majority of that increase came from 'standalone' sales - new customers only buying mobile services rather than current ADSL customers adding mobile services to obtain discounts from their ADSL services. The other trend was an increasing number of customers buying multiple mobile services. As I mentioned earlier in the week - residential mobile services will exceed residential ADSL services for the first time in Exetel's 'history' this month.This is, almost as surprising a positive reaction as the negative reaction to the revised Optus plans - and we add no real value whatsoever to the mobile services.

We had a very solid corporate sales week getting close to our pretty tough net plus revenue target which looks pretty certain to be met over the two remaining days of May next week with another 100 link sales month. Another of our latest batch of probationers reached her probationary target (10 sales in less than 4 months) during the week and the remaining four probationers continue to make good progress. Smaller business sales made by the Colombo based outbound sales reps continue to increase and their sales of VoIP to small/small medium business customers has already set a new record in May and will, with a bit of luck, reach 50 this month for the first time....a quite remarkable achievement.

The new Google cache (provided by Google) has finished its 'self population' process and is now providing an additional 800 mbps of fast IP for Exetel customers - mainly youtube content. This brings the total 'IP' capacity deliverable by Exetel to just on 10 gbps - a far cry from the 10 mbps we started with in February 2004 - a 1,000 fold growth over 7 and a bit years. The remainder of the net work upgrades planned for FY 2011 may not be completed by June 30th but the fifth Sydney PoP and the second Brisbane PoP are well on the way and may, if the provisioning Gods smile for once, may 'go live' before the end of the financial year.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

There are many aspects of today's residential market places that remain impenetrable to me and to anyone else within Exetel and if our major suppliers know any more than we do they are not sharing that information with us. From the public record comments available to anyone who cares to read them it would appear that only the efforts of Telstra are resulting in any significant positive progress in residential markets and that is being achieved by a relatively short term expenditure on 'marketing programs' (money) of previously unheard of magnitudes. TPG also make some similar, if far lesser magnitude, claims of progress but, according to the figures on the public record, their progress appears to be rapidly slowing - at least in top and bottom line terms.

As for the rest? From the little can be gleaned from obfuscatory public pronouncements nothing is going particularly well which, apart from the few real figures that become available every six months via public reporting, is confirmed by the almost deafening silence emanating from those companies that, in the past, were vociferous in their claims as to the progress they were making. This is reflected in the 'industry media' - where there seems nothing is reported day after day over the last months. Mind you, what used to be 'reported' was hardly worth reading but at least it gave some insights in to what could have been happening in various market places  based on what was not being 'said' rather than the actual statements being made.

Despite the constant comments to the contrary the only 'action' over the past year or so (apart from Telstra's 'win back campaigns') has been in the soaring usage of mobile devices to send and receive data. Apart from the teens and mental teens twittering, tweeting and SMSing until their thumbs dislocate the sheer density of more serious data users in cafes, airport lounges and taxis tapping away on keyboards in public places is a sight to behold. It is becoming a severe test of the human species base design when you see ears filled with mobile telephone connections (or ipods) with fingers or thumbs blurring away on miniature keyboards while trying to drink and/or eat something. I know this scenario has been around for a while but this may well be the first month that Exetel receives more orders for residential mobile services than it does for residential wire line services - if not this month then a month in the not so distant future.

The published 'statistics' on the number of mobile services in use across Australia are the sheerest nonsense (they would be impossible to collect) but what is available is the revenues from mobile telephony from the three mobile carriers which gives some sort of view of how mobile data usage is increasing month on month. There are also the various 'pronouncements' from the various mobile carriers themselves, both in Australia and in the US and the EU, which indicate quite spectacular growth in the volume of mobile data usages over the past few years and particularly in the past four quarters. In the USA the third major mobile network is about to deploy an LTE service (lagging behind the other three by almost twelve months) and that can only increase the growth curve.

So as the proverbial Freddy, and everyone else in this industry with some semblance of thinking abilities, has known for some years the saturation in various residential communications market places (particularly wire line telephony and wire line broadband at the lower usage end) was an inevitability and the amount of revenue (and certainly profit) those market places could deliver were going to be severely squeezed.....and so it has come to pass. Mobile delivers new market places and uses but as it does so it vacuums up an increasing part of the 'old' market places and uses. Mobile and VoIP between them have changed revenue and profit sources beyond all recognition over the past five years and are set to do it to an even greater degree over the coming five years. Even email is being affected with a marked decrease in usage....pushed aside by SMS and 'tweeting' in terms of ending its exponential growth.

Early in the life of this 'blog' I commented on this scenario - the speed and breadth of this mobile data change has more than met the 'predictions' that were derided by the unthinking as little as four years ago.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....to at least two large Australian technology providers based on this comment by Telstra's John Stanhope (assuming it was accurately reported from his address yesterday in Melbourne on the subject of Telstra's use of overseas call centres):

"“Increasingly, we are finding that it’s our customers who want to go online. Many of our customers
don’t want to talk to a customer agent,” Stanhope said. “They’d rather make their transactions – such as
changing plans, ordering new services or activating additional features – on their PC or smartphone.”
The Telstra CFO noted that the company wants 35% of its transactions to be online by 2013, up
from around 10% now. He cited other improvements to be driven through Telstra Digital including
new email bill enhancements and new online ordering for business customers."

When Exetel commenced offering residential communications services the FIRST thing we did was to begin automating every process that could be automated. That concept is, of course, a company life long project to which there will never be an end in terms of automating new processes and 're-automating' previous processes to improve them. Before the first six months of offering residential ADSL, telephone and mobile services (July 2004) Exetel had user facilities on line that already allowed the basics of customer support to do the things Mr Stanhope is talking about making available in 2013 - 10 years after Exetel (and almost certainly other service providers to some extent) has been providing them, and so many other customer facilities.

We can have no way of knowing just how many/what percentage of total transactions our customers complete on line as opposed to how many/what percentage they complete via our call centre. When we bothered to keep web statistics our customers would visit the Exetel user facilities on average three times each month to look use those facilities to either obtain information (download usage, call spends etc or to process a transaction such as a plan change, added service or to print previous bills or to make an information change) whereas less than 8% of total customers would actually call us to report an actual or perceived problem with their service or query/resolve some billing issue. 300% on line vs 8% by telephone in crude terms.......a far cry from the figures allegedly applying to Telstra.

We are also talking to two other suppliers of communications services about providing 'back end' user facilities for their customers based on the current Exetel user facilities as neither of those companies, their own words having been shown what Exetel provide, "have anything like that level of function and sophistication" available to their own customers....followed by "it would take us years to get such facilities developed internally and it would cost a huge amount of money". Perhaps that's true - personally I doubt it - but what is probably true is that they have no internal process where user facilities that integrate, financial, operational, network and support could be agreed upon by their many internal departments and then executed by yet another (IT) department very easily.

I take little comfort from this scenario as I see it/hear about it every day concerning our own interfaces to the various companies with whom we deal. It does tend to point out that even the largest Australian companies don't put in enough effort to use the technologies they sell to their customers very well within their own organisations - probably due to the cumbersomeness of size and the inability to get their 'warring' department structures to work effectively, and continuously, towards common goals. Inevitably the failure to use the technology that is available to them continues to demean the human beings who work for them by having them do repetitive tasks that can be more easily, more accurately and far less expensively be done by machines.

Overseas versus local call centres wouldn't be debated if there was no need for them in the first place.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

........because, apart from anything else, there can never be enough spectrum. Such statements are common by idiots who have never visited London, New York, Los Angeles or any other megalopolis where over ten million people are crammed into an area one tenth the size of greater Sydney and happily used a wireless broadband service for serious applications....

....or some other BS as reported in this article on Telstra's planned LTE deployment:

http://www.computerworld.com.au/article/387620/telstra_track_4g_lte_2011_/

Apart from Mr Mercer joining the long line of ignorant dummies whose stupid pronouncements on wireless broadband return to haunt them, the major point of this 'development' is that significantly faster wireless broadband speeds will now become available and, in some areas those speeds will begin to approach the fastest speeds available from ADSL. Nothing Earth shattering in itself but simply marking another milestone along the defined path mapped out for mobile wireless development - not quite 100% 4G but so close it makes no end user difference.

How/when Optus and, possibly VHA deliver similar speeds via similar technology later this year remains to be seen but both of those companies are on the public record as saying they will do so. Similar things are happening in the US and in the EU with LTE/4G networks already in operation and, apparently, not suffering from spectrum availability issues. It's very early days for these new, increased, speeds and doubtless the "never be enough spectrum" nay sayers will continue with their 'proofs' - in the meantime, as has been the case since mobile broadband 'appeared', an ever growing number of users will continue to use it at ever increasing speeds and continually lower costs.

The significance, if that's the right term, of this week's 'announcement' (it was actually 'announced' more than a year ago) is not what effect it will have on ADSL but the implications for the future 'NBN2'. Stupid Stephen's current pronouncements that 12 mbps is the base line speed of the 'NBN2' now means that, at least, Telstra's wireless broadband will be as fast as the 'NBN2' is planned to be in the future - but it is deliverable 'now' with a mapped out growth path that will ensure it keeps getting faster. Cost and geographic availability are both likely to be better than the 'NBN2' for a significant number of people and the lower data downloads implicit in wireless broadband are likely to be more than sufficient for an increasing percentage of broadband users....I seem to remember making these comments getting on for four years ago now.

As someone who uses wireless broadband and a mobile MoIP telephone, and has done so for some considerable time, I find no limitations in doing so. I don't play rpgs or pirate movies - a usage 'pattern' I share with a largish percentage of adult internet users. Whatever percentage that currently may be it is more likely than not to continue to increase which, inevitably, means that the possible maximum market for the 'NBN2' will continue to decrease. The 'NBN2' never had any appeal outside entertainment internet users, and most of that appeal was for illegal downloads. So, you could take a sustainable view that the current federal government is spending a huge and unknown number of tax payer's dollars to rot the minds of the Australian population by making anti social behaviour patterns more prevalent and encouraging the theft of other people's intellectual property.....powered by a desperate desire to cling on to keeping their noses in the trough.

Panem et circenses ring any bells?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....the result of on line publications removing revenue from sales of printed versions and the consequent 'belt tightening' - reduction in journalists and standards required? I read five or six newspapers (or at least scan their business and tech sections each day)  but only pay for a print version of the Sydney Morning Herald in recognition that I don't want the SMH to disappear or to be forced to drop its standards even more than it already has because more and more people don't pay for a print version and therefore its revenue from that process and the associated advertising revenue continue to decline. Although I do pay for access to the Wall Street Journal I read four other 'foreign' papers free and more than a dozen tech on line publications on line without paying for them.

So is this what you get when news publications no longer have journalists with an education or an IQ above their shoe size:

http://www.smh.com.au/business/telcos-set-to-reconnect-to-customers-20110521-1extj.html

For this dummy to accept any of the "facts" he uses to put together this piece of nonsense is mind blowingly simple minded but to then simply print statements showing that the person giving him the "facts" is contradicting himself within the same sentence is just plain moronic. However that isn't really the point. The real point is that technical services of quite significant complexity (and that require the end user to connect to those services via equipment that they own, and even more to the point, set up and fiddle with themselves,) cannot be compared with some dummy querying the charges on his bank or credit card statement. The fact that the 'complaints' processed by the TIO are generated in a completely non-sensical way simply destroys any vestigial credibility to this meaningless piece of nonsense posing as rational journalism.

Let me state that by writing the above words I am not, in any way, suggesting that the "problem resolution processes" deployed by many large and small and every size in between communications service providers in Australia are 'perfect' (they are far from that in many instances). What I am saying is that using any false information from the TIO to justify anything is just the sheerest nonsense. However all of that is beside the point. A rational person would look at the situation in very different ways - principally differentiating the ways technical services are provided to end users who are significantly involved in the quality of service they receive and how a majority of users of technical services have an overwhelming desire to pay as little as possible for receiving those services.

For as long as communications services are bought by the "average Australian" it must be obvious that a significant number of users of complex services are not going to have the skills or knowledge to sensibly trouble shoot problems that they may encounter from time to time in using such services. They will pick up viruses from time to time; their hardware and cables will become unreliable and eventually unusable - although "I haven't touched anything"; their children/co-users will fiddle with complex settings and render their connections unusable - etc, etc. To drive a car you need a license - to operate a much more complex (if not anything like as publicly lethal) device you need nothing but the ability to pay for it. So any incompetent fool can buy a complex router/modem/ATA/wifi device without having a clue how it operates and can then blame any subsequent mishap on a completely different commercial entity. Problems with CPE account for around 90% of all "service problems" Exetel encounters - and I doubt the statistics are very different for any other Australian comms provider.

There is, however, an issue with "customer satisfaction" in the resolution of "problems" with complex technical services that will never be addressed by any current or new enquiry into anything. You will never be able to educate the "average buyer" to the technical expertise level required to use communications services without problems and the providers will never be able to afford to hire and retain enough qualified technical staff to deal with such customers. As price 'demands' by technical services customers continue to escalate to the point where 'free' is the only basis for their purchase - the apochryphal 'Freddy' could tell you what will happen in the future.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

....so the wife can watch a "Royal Wedding".....does that say it all or - does it say it all?

I was trying to get my mind in the right frame of mind to think about doing some work on next year's business plan (May is almost over and nothing much has been done) but I read this:

http://www.smh.com.au/national/turned-on-tuned-in--disagreed-20110520-1ewn0.html

and choked on my toast. I understand that Australia's media is trivial to the point of non-consequential but for Heaven's sake! If Ms Seren Trump is an example of someone whose "business will be transformed by the NBN2" then - enough said. Someone choosing to run a business from a location in Armidale which requires them to transfer files to a client by hand carrying a hard disk to them (assuming this is something done regularly) is a total moron and the only 'case' she is making is that the current nanny state has gone beyond all known bounds in using tax payer money to assist this incompetent idiot (and, presumably, millions more just as stupid in the future) play at working from home instead of moving down the road in Armidale where she can get ADSL or ADSL2 like 20,000 other residents of that city.

The largest pork barrel in the history of Federation is being used by an illegitimate prime minister and two hayseeds to further trivialise a probably already past redemption Australian society to a point of complete inanity. Anyway, irrespective of what will REALLY happen over the coming years, Australia's tax payers will become $50 billion poorer to provide a more expensive equivalent of Foxtel/Pornography/Antisocial RPGs to the parts of Australia that Foxtel itself deemed to be commercially non viable....oh and to provide nincompoops with file transfer capabilities that the rest of the country has deployed for over a decade. It's hard to put hard work into a business that is based on becoming the equivalent of the government promotion of gin drinking in Georgian London as medicinally beneficial to the restive population of that and other large cities of the time.

But then Australian governments have served the citizens of Australia well over the decades in their promotion of alcohol, tobacco, poker machines, horse racing etc as being sensible and healthy aspects of life to be forced on the electorate so why not further vegetate the population by institutionalising a larger majority of the population and ensuring that by removing the remaining benefits of living outside major cities no-one in regional areas of Australia will ever be able to progress their children's lives as they have been able to do in the past. Perhaps that massive downside, identical to their support for tobacco etc, has escaped the orange roughie?

What a terrible way to start what should have been a productive day. Time I hurled this notebook computer through the window and made a sensible contribution to society.....even if that only turns out to be contributing to the profits of the retail industry by having to buy a new computer.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

The week was very productive in a series of minor ways that are important for the future.

We completed the compliance testing for the 'NBN2' (apparently Cisco router's purchased by Exetel will in fact connect to Cisco routers purchased by NBNCo - that's a great relief) and we ordered the equipment, rack space and cross connects to allow us to connect to the 'NBN2' in Armidale (and other NSW locations). While the theoretical commissioning time is 14 days we will be happy enough if the new PoP is operational before the end of June. This will be the fifth Sydney PoP (the others being Verizon, AAPT, Equinix and North Sydney) and are part of the planning to build multiple levels of redundancy into the Exetel network to meet the ever more demanding standards of corporate customers - as well as, in this case, to connect to the 'NBN2'.

As more of our corporate customers are asking about future inter-operabilty for IPv6 Exetel has taken the appropriate steps to provide reassurance to make that happen for any corporate customer that wishes to do so. While there are no companies using IPv6 at the moment Exetel has worked with both NTT and Verizon to provide IPv6 connectivity (neither Telstra nor Optus have made any sort of testing available as yet) and have now made IPv6 available as a standard part of Exetel's corporate services. So another 'first' for Exetel and although it is not something that will help either us or our customers in the near future it is important to some corporates that there is a demonstrable capacity to implement it.

Also over the past week the Google cache started to deliver real data to a gradually increasing number of users - mainly youtube content at this stage as the server cluster continues the process of building up which will take some time but we have allocated 6 gbps to Google on Sunday early morning to boost the process for 12 hours. In theory the Google cache will add something like another 1 gbps of mainly US content for Exetel users before the middle of June. 

We spent a fair amount of the week simplifying and increasing the value of residential offerings and have,with the help of two of our carrier suppliers, significantly improved the ADSL and wire line offerings - at least for some segments of the market places we address. There are a few more things we need to do before the end of May but I am, personally, happier with what the offerings now are than I have been for quite a while - probably for well over 18 months. We will now have to see what happens over the next week or so.

So a week of bits and pieces but, overall, every part of our business moved in a positive direction.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....at least it is for people who pay no attention to the actual 'length' of the day in terms of sunrise and sunset times. In Australia, June 1st is deemed to be the start of winter in this country  (just as December 1st is deemed to be the start of summer) but the actual rotation of the planet Earth on its access would dictate that it actually starts on June 21st - as is the case in every other country on the planet as far as I know.

Whatever the actual situation is with winter (and a very reliable barometer is my wife who mark's the start of winter as being when she returns the electric blanket to the bed arrangements) this 'winter' is likely to be a very cold one for more than a few companies in the communications business. I don't base this on any deep knowledge of how any other supplier operates other than the continued increase in background 'noise' derived from our suppliers and from the contacts being made by some of our 'fringe competitors'. Like the older and less physically robust birds that visit our gardens, winter is a time when only the younger and stronger birds make it through to the warmer months at the end of each year. So it seems, at least to me, that the Australian 'boom economy' is actually about to enter, or has already entered, the winter season.

I base this on the 'facts' that three of the retail outlets I have used on and off for the past ten or so years have closed their doors in the past few weeks and that two of the suppliers Exetel has used since our early days no longer answer their telephone. Another indication of much tougher times is our residential bad debts, although still miniscule, have doubled over the past few months from less than 0.1per cent of monthly revenue to 0.2 per cent. There are other indicators of tougher times in the ways that our suppliers act in terms of 'better' offers to us but more obviously in the much better offers they make to other wholesale customers. While nothing I have cited points to anything concrete the agglomeration of so many indicators does show that the tough times we have been going through, in terms of the various residential markets in which we operated for the past two or so years, are showing little or no sign of easing.

If there was any doubt about how widespread the 'pain' caused by Telstra Retail's "win back campaigns"  actually is you just have to look at the wave of 'new' pricing' for residential communications services that is beginning to appear almost everywhere you look lately. Some of this is the long overdue 'correction' of over charging by some of the more pretentious providers but most of it isn't - it is a genuine reduction in 'real' pricing. So where did these suppliers get the ability to make reduced offers? Impossible to say but probably true to say it was not done without great pressure from some source or another.....the source/cause being falling sales/sales revenue that has to be addressed by internal efficiencies (resulting in lower sell prices).

How all this will work out remains to be seen - good for most communications services buyers - not so good for communications services sellers appears to be inevitable. I would hazard a guess that the people who will be most affected will be the employees of the larger, and maybe the not so large, communications companies who will need to find alternate career paths as their current suppliers try and find the efficiencies required to 'repair' damaged income streams and profit margins. This certainly seems to be borne out by the number of unsolicited resumes I am receiving lately.

It appears it is going to be a tough winter for more than Currawongs this year.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

This article points out the bleeding obvious but does illustrate a situation which is not going to be easily dealt with:

http://www.smh.com.au/technology/technology-news/netflix-chews-up-more-bandwidth-than-any-other-website-20110518-1et2h.html

With several similar services  (FetchTV as the current obvious example) likely to be offered to Australian users over the remainder of this calendar year the trend of average bandwidth usage per customer is set to accelerate. As an example of trends over time the average customer download usage for Exetel customers has increased from a little over one gigabyte per customer per month in April 2004 to around 5 gigabytes per customer per month in April 2008 accelerating to 13 gigabytes in April 2010 and is now North of of 20 gigabytes in April 2011. This is at a time when over 50% of Exetel customers download less than 5 gigabytes per month.

Those of you that look at our web site on occasions would have noticed the progressive changes in download inclusions over the past few weeks as we consider the implications of the tsunami of video offerings that some percentage of end users will require over the coming months. The most obvious example is FetchTV which while being able to be delivered via multicast from approximately 400 exchanges will not be able to be delivered that way to the other 2,000 plus exchanges used by Exetel (or any one else's) customers....only Telstra will be able to do that. Of course, 400 exchanges cover around 80% of Australia's broad band users so it isn't going to be any sort of real problem in the short term but, even so, the usage patterns of customers will inevitably rise significantly and very quickly.

Depending on just what transpires over the near future it seems inevitable that Exetel will no longer be able to use Telstra as a supplier of ADSL services - unless there really is a true split of Telstra in the relatively near future. While it's true that Telstra Wholesale prices have declined from their stratospheric levels of 12 - 18 months ago they still charge Exetel well above their own retail prices and, possibly much worse, far higher prices than they charge our competitors. We need to see what actually transpires over the next twelve months or so but if 'movies on demand' does become the same devourer of bandwidth here as it is becoming in the USA then Telstra's port and back haul costs will make it impossible to deal with. I suppose this would not be as large a problem if you believe that the 'NBN2' will actually be delivered in enough places to provide a new alternative to Telstra at realistic prices but I am of the opinion that won't happen either at all or in any realistic time frame to obviate the problem.

The costs of re-dimensioning any network to deal with the demands of movies on demand will pose a significant challenge to any network owner. I, of course, have only a vague idea of the actual capabilities of the different networks deployed by the various suppliers but the growth statistics in the cited article are harbingers of significant change and investment requirements. With the 'NBN2' complicating almost every aspect of providing services today the complications of providing services tomorrow that require significant investment today are even more complicated.

As Malcolm Fraser once said........ "where did I put my trousers?"

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....all is right with the world.

Well the good, personal, news this morning is that my youngest daughter was offered a new position with IBM as a rep in one of IBM's UK business units - so her trip to England was not a waste of time and money. It occurred to me that my children are the third generation of our family to work in the IT industry as my father worked for NCR in Japan, the Philippines, Kuala Lumpur and Hong Kong from before my birth eventually selling the first NCR computers throughout the Asian region. It will be sad for her mother and me but a great opportunity for Catherine - so a great, personal, start to the day.

We continue to adjust, upwards, the inclusions in the current ADSL plans and are making some beginnings of progress in getting these more correct than in in the past. It has been a very long job and there is still no real 'end' in sight to this analysis - not that there ever has been I suppose. As I stressed yesterday - I blame my totally appalling 'negotiation' skills for this situation (there was a time when I was pretty certain I could tell when people lied to me - clearly that ability is no longer available to me). However I am assuming that if we work hard enough for long enough - using brighter and more experienced people than me - we will get back to a situation that becomes more viable for us over the coming months.Maybe we will 'finish' this current round of adjustments by the end of this week if some things finally go right.

We will need to do the same thing for the mobile broadband and mobile telephone plans before the end of June on the basis that I must have contributed to getting those buy prices as wrong as I got the ADSL prices. While we make some progress in developing those services the progress is not anything like fast enough in today's terms. This is due to any number of factors but mostly its our lack of 'bright ideas' and we need to fix that major issue before we can expect an increase in progress. Again, our buy pricing is not going to make things any easier and some hard decisions will need to be taken on just how best to improve our rates of progress in the coming new financial year.....nothing new in coming to that realisation.

One aspect of our current business that has benefited from 'bright ideas' (and enthusiastic management) is the ongoing development of corporate sales being made out of Sri Lanka. These are, at the moment, mainly in the small business business markets but we are not far away from signing our tenth large business customer from the efforts of the SL outbound sales personnel. This has been a highlight of the 'daily struggle' and is encouraging enough for us to escalate this program more quickly than originally planned. The new 'batch' of trainees are also developing more quickly than in the past which is also pleasing to see. Perhaps this is an indication that the people mentoring and training them are doing a better job based on having more experience than in the past?

Perhaps the sun replacing the seemingly continuous rain of April is having an overall cheering effect?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....my best friend is 'cheating on me' with my main competitors.

The definition of a 'secret' is a fact known to one person. Therefore it is unsurprising that there are no secrets in the Australian communications industry.....or any other industry or circumstances where more than two human beings exchange information/casually chat. I have never paid any attention to 'gossip' or any other aspect of relationships between our suppliers and their wholesale customers on the basis it that it was none of my business and I had enough things to worry about without considering such things. However, over the past two years or so (as things have become progressively tougher in various aspects of this and related businesses) it has become impossible to ignore thinking about just how some of our competitors manage to make the offers that they do when they buy base service from the same or similar wholesale suppliers.

As part of some possible future 'deal' I exchanged some highly confidential pricing information with a company that we have been talking to in a not very serious fashion for some time, on and off, about a possible collaboration. As time has passed and business has become no easier these desultory 'talks' have started up again over the last week or so to the point that we may seriously consider doing something in the foreseeable future. To determine whether there would, in fact, be any real advantage in doing something(s) jointly we exchanged some buy pricing information from a range of our suppliers. My 'heart break' was caused by seeing that we buy so badly compared to at least one of our competitors and, in at least one instance, they are buying one major service at a price almost 25% less than we are paying. Doubtless they buy in larger volumes than we do but such a difference makes it impossible for us to compete in that particular market.

As I thought about it yesterday evening and again this morning it became evident to me what a lousy job I have been doing for the past few years in trying to build sensible commercial relationships with our various providers and just how unsuitable I am to have attempted to undertake such a responsibility. I have caused unnecessary stress to our employees and our customers accepting wholesale pricing that is far more expensive than that provided to our direct competitors with all the negative consequences that imposes on everyone associated with Exetel - except for the suppliers who make disproportionate profits from what we buy from them. What a total dummy I have been and how stupid can one person be without noticing?

So, when I get over the self flagellation, it will be necessary to find a way(s) to deal with the results of my stupidity on a permanent basis. How that can be accomplished in the mess I have created is not going to be quick or easy and, right now, I haven't got a clue as to how to go about it. I am assuming that once you realise what a total idiot you have been, and once the disappointment, anger at yourself and the sheer despair of being such a complete tosser passes then rational thought will allow a recovery process to be put in place....but then, that was what I thought I was doing while creating this situation.

There definitely is no fool like an old fool.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46