John Linton ...but I really don't know where the past ten and a half months have gone.
It was a busy week but when I try to remember anything that was achieved over the last seven days I really struggle to come up with something productive (just as it has been for virtually every week this year). For whatever reason(s) it seems to take a lot of time to stay where you were before you put the effort in to thinking about how you can improve something - or some one - if you really want to waste your time. So another week disappears and the end of this financial year is a week closer. Frighteningly close in fact and we have achieved very little compared to even the modest ambitions we started the financial year with.
We did make some progress in beginning to implement a new, or at least heavily, revised set of tactics to address what we see as being the prevailing directions in some parts of the residential marketplaces. By the end of May we would hope to have settled the directions for ADSL, wireless broadband, voip, wire line and mobile telephony. All of these services have changed an enormous amount from this time 12 months ago and we have been too slow to recognise just how quickly and dramatically each of these services have changed in terms of how they are being offered by the leading/largest companies. The current situation, in case you haven't noticed, is that prices have fallen for all of these services over the past 12 months or so by over 15% with more inclusions and with 'median' pricing for ADSL services falling by more than in any previous year that I can recall.
While our suppliers, except for Telstra of course, have been reasonably accommodating this is the first year I can ever remember that end user prices have fallen significantly more than our buy pricing. This, obviously, makes business extremely difficult and if it continues then it makes it impossible. While we have mitigated the effect on Exetel by generating more 'corporate' profit than we have lost in residential profit on a dollar for dollar basis to date we need to improve our performance quite substantially over the coming year and more rapidly increase the percentage of total revenue generated from corporate and non-ADSL residential services. Easy to say - much harder to do. The new residential plans have worked well in terms of the Telstra based plans and we have yet to see the effect of the new Optus based plans introduced late last week.
So the 'blood bath' continues as we enter the last, crucial, six weeks before FY2011 is just a rapidly fading memory. There are so many things we do to salvage what can be salvaged from this worst business year I can remember that they only cheering is that it can only last 6 weeks - which is a pathetic way to look at business. Perhaps FY2012 will be even harder/more difficult - there is no real reason to think it won't be after what has happened over the past two years. Then again there are significantly less 'competitors' than there were two and a half years ago and we have changed Exetel quite considerably over that time.
Time to do more sensible things on this bright, sunny if not particularly warm, Sydney morning.
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