John Linton ....and the ground under my feet was dry when I went to get the Sunday paper......for some reason it isn't raining.
We did the second half of the monthly billing earlier this morning and I am having trouble adjusting to the new reporting formats which require, at the moment, the mental arithmetic of combining two figures before being able to see the month on month comparison. We need a combined report which now we have had two months of split billing we will put in place for next month. The actual combined billing figure dropped by about .6% from March which is always disappointing to see. However the gross profit was greater, by over 8%, which is the highest upward movement, month on month, we have ever recorded since mid 2005. Strangely, while the total number of ADSL residential users declined the actual revenue increased slightly in all the major locations and for both ADSL1 and ADSL2 services. That almost certainly accounted for the profit increase being so great.
Overall our plan to swap unprofitable/low profit revenue for realistically profitable revenue is working though more slowly than we had expected and with far more 'hiccups' along the way. It was a very 'brave' initiative but, in reality, we had little/no choice and if we hadn't taken the steps when we did I doubt whether I would be writing this blog today. While we are still very much dependent on residential ADSL revenue/profit, and will be for some time, the trend to more profitable revenue
The new V plans we have offered to current Exetel/Vodafone customers are being well received and, while it is too early to really tell, we may well retain a higher percentage of those customers than we have conservatively estimated. In any event it is a small step along the way to developing a sensibly sized mobile customer base which we have never been able to do in the past. What is really required is to find a way to provide mobile services via Optus that will appeal to a much wider demographic. We really didn't get very far in our discussions over the past few days and we need to find a catalyst to get past all the 'me tooism' that is dominating current thinking. My long held personal views are that residential mobile is not a market for Exetel as it is dependent on giving away hardware and, in the case of the iphone and ipad, hardware that is not available to Exetel even if we could fund the provision of free handsets....which the people who would have to provide the money or the bank guarantees to do that are very, very reluctant to do.
The V plans for current Vodafone users are sold at break even to allow Exetel to 'tidy up' our overall offerings and the prices at which those plans are set cannot be used for a 'commercial offering. The easiest markets for Exetel are corporate users where the back end services and flexibilities we can provide are 'high add on value' and difficult/not possible for other suppliers to offer.compared to us funding hardware which corporates can do as well as we can....so "free handsets" are not the same "value" to a corporate buyer as they are to an 18 year old or similarly indigent person. We will pursue the 'family fleet' concept next week but that is a very difficult initiative in all sorts of ways. In the mean time we just have to work at finding something simple and different that is of wide appeal....piece of cake.
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