Monday, May 16. 2011A Very Enjoyable DayJohn Linton I had an Exetel free day yesterday for the first time in a very long while. Perhaps t was the very late start to the 'computer' day caused by whatever it was but by the time that was fixed there was very little time to complete the Sunday 'chores' before driving my youngest daughter to the airport. She is going to London for three days to meet some people at IBM who she has applied to for a transfer from IBM Australia. Very exciting for her and I really hope she gets the job despite feeling a regret that we will see very little of her for at least two years and quite possibly longer than that. She has worked for IBM since finishing her IT degree some 5+ years ago and it has given her a very solid basis for continuing a career in the booming technology marketplaces if that's what she wants to do. Her current 'boy' friend (if you can apply such a term to males in their late 20s) is also planning to go to the UK to do his MBA so that allows her to keep one set of her options open. Annette and I then met up with our eldest son and had a leisurely lunch (which was surprisingly good) at one of the 'strip' of restaurants that now comprise half of the rebuilt Finger Wharf at Woolloomooloo. We chatted on about this and that for a couple of hours until the sun no longer warmed our part of the world and drank some very nice wine to go with the very nice food (I can't remember when I last had a decent, unfussed with, piece of beef). It occurred to me over lunch that four of my five children have all taken up jobs in IT from the time they graduated and three of them worked part time in IT throughout their studies from late high school. As Annette had been her usual abstemious self we we able to drive home without incident. While we were driving home I thought about today's graduates and what they wanted from their "20's". We recently had a spate of resignations (if three can be described as a spate) from the graduates we have employed in corporate sales trainee roles which has caused me to re-think that, to date, very successful process of building a corporate sales team. Each one of the resignations were because the people concerned wanted to 'take three months off' to go and do something more interesting than their current jobs. Their time with Exetel had varied - 25 months 20 months and 8 months but I found it difficult to understand why people would give up a career that they were beginning to do well at to "do something more interesting" for three months after barely starting their working life. Times have obviously changed considerably and I haven't been aware of these changes. It is something that we will need to much better understand and change in our recruiting processes. I would like to be able to say that when we got home that I did something useful but that would not be true. I dozed in front of the TV for a while before arousing to pretend I was interested in the news and then an old movie. It was only when we eventually went to bed that I realised that I had done no 'work' and for the vast majority of the day I hadn't thought about Exetel or the Australian comms markets. A very strange day in that respect and perhaps an indication of days to come. Copyright © Exetel Pty Ltd 2011
Sunday, May 15. 2011My Internet's Suddenly Slowed To Dial Up Speeds.....John Linton ......bloody Exetel. I have seen the statement many times since February 2004....and it came to mind earlier this morning when MY internet slowed to "dial up speeds". But having been around a while I instantly remembered that I had, because I'm terminally lazy, been deferring renewing my AV licence because that would involve getting up, going to another part of the house and retrieving my credit card. So I renewed my licence, painfully slowly because of the capabilities of the newer viri that try and prevent you loading AV software, and eventually after much swearing and disk cleaning and removed the viri that had accumulated on my disk while I was breaking every rule I have painfully learned since I first used internet seriously. So it made my usual late Sunday start two hours later than it usually is - but at least I didn't ring up some help desk and abuse the unfortunate person who answered my call for being employed by a "hopeless" company which "steals from its customers by using two cans and a piece of sting for a network". I don't know how stupid such people are to actually think that any network that runs well for a long time would suddenly "run worse than dial up" - these same people are always affronted when the CSR asks them if they done an up to date virus scan recently. They tend to 'scream' "of course they have" and slam down the phone - never to be heard from again. Presumably they had yet to understand that large networks don't suddenly lose 95% of their function and the most probable explanation lies within their own control. I haven't looked into detailed analyses of support calls for some years now - leaving that level of detail to the people who operate customer support - but when I did the number of 'customer equipment problems' versus actual carrier line problems was over 9 to 1. As the 'average' user gains more experience (and AV software is more widely deployed - and used correctly!) I would have assumed that the 9 to 1 ratio would have dropped quite considerably over the past few years...but, as I said, I haven't checked. I need to do that now as we progress in planning for FY2012. The number of support engineers required to cover 16 hours a day, 7 days a week is not inconsiderable even for a network that remains as uncontended and stable as Exetel's (particularly when you strive to have an average response of under one minute). While the average experience/knowledge of ADSL customers in general has significantly increased the same number of "bloody Exetel" seems to exist. There is also the post 'NBN2' announcement scenario where carriers seem to be more tardy in upgrading exchange back hauls than they were in the past and that is becoming a growing issue. It will be interesting to see what percentage of support calls are now caused by exchange back haul contention. In general terms we have settled the major parameters for next year's endeavours which are based on even more conservative thinking than in any of the past years. This is unexciting and, in many ways just plain boring, but the many uncertainties in the market places we address and the many uncertainties in how and what other suppliers to those market places may do makes this a very difficult time to be 'aggressive' or even 'brave' (thank you for the reminder Sir Humphrey). However, as anyone who has been in business knows, being boring is something that you plan to do at your peril - particularly in a company of Exetel's size. Therefore we need to deal with the issue of ensuring that 'life' for each of our individual employees is 'exciting' while planning on an overall set of plans that are very far from exciting. That is itself is challenging enough to remove some of the boredom. Copyright © Exetel Pty Ltd 2011 Saturday, May 14. 2011Maybe It's Yet Another Sign Of Age.....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.
Copyright © Exetel Pty Ltd 2011 Friday, May 13. 2011Money, Avarice And Death.........John Linton ........a cautionary day. Yesterday was an interesting day in some respects. Annette and I had our 'annual' meeting with our bank manager to go over the events of the past year and listen to what he could do for us in the coming year. We do a fair amount of personal business as well as approximately half of Exetel's business banking with St George (the other 50% with Westpac) and its interesting to compare the differences between the way the two banks operate despite the fact that St George has been 'owned' by Westpac for some time now. Over the years St George has continually been the more, by a wide margin, accommodating of our two banks in that if we approach both of them with the same request St George will respond very quickly, and usually very positively and Westpac will still not have got back to us with an answer by the time we have made and executed the decision. This is, obviously, partly to do with the capability of the long term St George manager compared to the various different managers we have had at Westpac over the time we have used both banks but the overall difference is obviously in procedures and 'bureaucracy within the two organisations. We also met with the representative of a company that has expressed an interest in buying Exetel over the years - not because we believe they are actually interested/capable of buying Exetel but because it's always interesting to listen to what other people in the industry have to say about current marketplace moves and the companies involved in them. It is a useful way to spend the time it takes to drink a cup of coffee and, while not on this occasion, you sometimes 'learn something to your advantage'.....especially if you ask questions carefully using the mental equivalent of triangulation. The more I attend such meetings the more I realise that this industry continues to change in ways that I am not just uncomfortable with but that I don't relate to at all. That is, of course, entirely my problem. What is quite apparent is that times continue to be very tough for almost all companies involved in providing communications services whether it is zero cents a minute international voice services or huge integrated services supply. The saddest part of the day was attending the funeral service (strangely, given my advancing years, only the third one in my life to date) of someone who was very kind to me when I first came to Australia as a teenager and who helped me develop in to something useful in my first real job. (he was the person who showed me how effective listening was compared to talking when I was 18 - I have never forgotten to do that since) Both he and his wife provided me with more than one meal when food was something that I sometimes couldn't afford (having squandered my weekly pay on more important things like poker machines or trying to impress a girl by buying her a meal I simply couldn't afford) and they also made my first and second Christmases in Australia less lonely than they would certainly have been. Apart from being so kind and generous to me personally, he was a good and decent man and it was sad that so few people attended his funeral - he separated from his wife many years ago and he had no children. I wish I had seen more of him - I learned a great deal from working with him in my early career and never forgot what I observed and was directly taught. I should have done much more to return the kindness and tuition. Just your average business day really. Copyright © Exetel Pty Ltd 2011 Thursday, May 12. 2011It Sure Doesn't Look Like KansasJohn Linton There are many aspects of operating a start up business through the various stages of its existence - bearing in mind that 50% of start ups don't make it past 18 months and only a very tiny percentage of start up companies ever make it past their 5th year of existence. I read this yesterday: http://www.adelaidenow.com.au/business/internodes-hell-of-a-ride/story-e6frede3-1226053623272 as an example of one company that has grown and prospered over the past twenty years and is one of only three Australian communications companies that existed 15 years ago (in some form) that has survived and grown over that period (the others being TPG and iinet). It simply confirms that the Australian communications industry is no different to any other industry in Australia or, almost certainly, any other country. Operating any business is seldom (if ever) easy and the factors that affect ongoing success are numerous and sometimes uncontrollable. There are a tiny number of companies that have lasted 100 years and those that have, with a few obvious exceptions, are in businesses today that bear little or no resemblance to their origins (banks, automotive manufacturers and base metal refiners or resource prospectors being the major exceptions that spring to mind). However the information delivery and processing industry has a higher percentage of long term companies than any other industry sector with the possible exception of banking although, of course, it is an industry with, at the most generous of interpretations, has only existed for some 210 years. No company in the communications industry can claim to have been in existence for the whole 210 or so years and with the possible exception of AT&T and C and W (if they really stretch their claims to their origins) or IBM and NCR can really claim real ties to existence in the 1800s. So communications companies, with the obvious exceptions of national carriers in the EU and the US and much of the old Empire and Commonwealth are pretty 'new'. The obvious conclusion to draw is....well....not so very obvious; at least not obvious to me who has been in this strange industry since his late teens. So, in beginning to try and 'design' a sensible financial and operating plan for Exetel's eighth year of existence I am finding it a quite different experience to past years. This is partly because after two of the hardest years of my, and doubtless a significant number of other people's, commercial lives it is harder than it used to be to 'predict' just what will now happen over the coming years. The reason I mentioned the Simon Hackett article was the quoted statement: "He (Simon Hackett) said Internode was placing "two bets on two possible futures" for the While this may well be just some off the cuff/spur of the moment comment it does serve to illustrate (if it's even vaguely true) the sort of changes that many companies now have to contemplate in this industry. Internode, like almost all/all current companies that grew and prospered while Telstra watched its market share drop like a stone in ADSL services now have to contemplate a future where Telstra has changed the 'landscape' and the 'NBN2' if it actually continues to exist will change it even further. So, like the fictional Dorothy, the present is very strange and very different and she made that observation before she met her weird co-travelers. Just how very, very different will the future actually be? Copyright © Exetel Pty Ltd 2011
Wednesday, May 11. 2011And The Winner Is......John Linton .........Skype - whose founders yesterday turned the idea of free telephony into an $US8.5 billion sale in less than nine years: Personally, I have never used the Skype service but clearly close to 200 million people around the world do and they make over 200 billion voice and video calls in a year. Not bad for a couple of guys who dreamed up the Skype concepts in 2002 and made them work well enough for Microsoft pay such an amount for a company based on the antithesis of Microft's own financial operating guidelines. They have ten times the number of telephone voice customers than Telstra which, while not a large telco now, makes an interesting future for Microsoft that has over 90% of the world's computer users as its customers with the opportunity of adding a totally seamless Skype interface (and advertising) into every new edition of Windows or Windows 'service packs'. An amazing marketing resource that can't be duplicated by any other VoIP provider. Apart from anything else it underlines how important VoIP already is in telephone technology right now and how even more important it is going to become in the future. We could not operate Exetel without VoIP and that has been the case for over four years. It isn't simply the cost of calls (though that would make operating a company in Sri Lanka very much more expensive) it is the ability of VoIP to allow us to integrate our provisioning and support process data base into our telephone system via Asterisk - we send over 1,500 messages to end users via email, SMS and voice each day via automated processes from our B2B systems with our suppliers directly to our customers. For other, much more sophisticated VoIP users than Exetel, VoIP has allowed them to deliver far more functionality to their processes and has cut operating costs far more significantly. VoIP, and particularly Skype's implementation of it, demonstrates just how far VoIP has replaced 'conventional telephony', since 2002. Virtually from the very beginning of broadband internet, VoIP has been the key new technology that has delivered new processes and massive cost savings to every individual and commercial and government entity that has adopted it. VoIP has reduced telephone usage costs by 50% to 80% to any commercial company that has deployed it but has also allowed those entities to provide customer services that just can't be done using PSTN or ISDN telephony. Together with corporate VPN connectivity VoIP has transformed commercial and government operations. I, like the overwhelming majority of people who use VoIP (I only have VoIP at home and the office and MoIP on my mobile) it has been years since I noticed any difference to "standard telephony" - if anything the VoIP service has less line distortion than a PSTN/ISDN service when I have done a side by side comparison. Apart from making Mr Zennstrom and Mr Friis mega wealthy beyond, presumably, their wildest dreams the Skype sale to Microsoft provides interesting speculation as to just how Microsoft will use this acquisition to recover their pretty ambitious outlay. While one company, even one as big as Microsoft, cannot 'change' world telephony practices overnight it will be interesting to see just what they will do now they own a cut price telephone company. It will be interesting to see whether this transaction begins to change the minds of the remaining dinosaurs in those commercial entities that have 'held out' in their refusal to consider VoIP services. Copyright © Exetel Pty Ltd 2011 Tuesday, May 10. 2011When You Can't Beat Them......John Linton ....copy them. Exetel has done, for a company of its size, a lot of innovation over its existence but we have really struggled to come up with really attractive ADSL plans over the last year or so. We have tried many different things over the last two years but have been unable to match Telstra's ever escalating "win back" programs nor TPG's "unlimited" packaging with their 'pretend' telephone service. We simply couldn't find a way of overcoming Telstra's marketing budgets nor could we bring ourselves to adopt the tactics of the scummier ADSL providers in terms of under provisioning and under resourcing provisioning and support facilities. That left very little leeway and practically no real paths to follow other than to just let the residential business we have built over the past seven years gradually decline - which still might be the best option. It's very difficult to make any real decisions under such circumstances. So having watched the inexorable progress of Telstra's "win back" programs based on throwing lots of money at our customers to get them to change we almost reached the stage of saying there's nothing more we can do and we will have to give up on trying to convince our customers and prospective customers that "all that glistens is not gold" and that contended networks, poor quality support and expensive or fraudulent "add ons" are not really delivering what they think they will. We came to the 'brilliant' realisation that if the marketplaces we address think that either TPG's or Telstra Retail's offers are the best in the ADSL market then we should simply combine the appealing features of both (large downloads from TPG and 'win back' money from Telstra) minus TPG's contended network and minus Telstra's high priced add ons. Too easy. So we found a way that we could do something like that and if we can persuade one or more third parties to work sensibly with us to make it happen we will offer to both new users and our current customers 'copies' of TPG's plans with $200 or so cash "win back" (for new customers) or "loyalty bonuses" (for current customers). So that would mean that we would give away as much cash as Telstra is offering (it may well have gone up recently but we have no real way of finding out) and as much download as TPG is offering (without having to use the sub-standard TPG network). Of course we don't have even TPG's marketing dollars (let alone Telstra's) so it is not a lay Will it work? I don't really know but no-one in Exetel has any ideas on how we can address the realities of the current markets so combining the principal attractions of the two current major 'market leaders' may well be the next best thing. If we can put the various 'logistics' in place we will provide a new range of plans (prefixed SOPJ) some time in the not too distant future. It is a strange feeling to become a copier rather than an innovative thinker but it's clear that no amount of innovative thinking can address a monopolist's cash give aways and the 'general' ADSL buyer appears to believe that all networks are equal in performance and that prompt and competent support is something they will never need and has no value to them so the only criterion for supplier selection is price. Fair enough. We'll just have to wait and see. Copyright © Exetel Pty Ltd 2011 Monday, May 9. 2011Nannyism Is Now Out Of ControlJohn Linton There are far too many 'imponderables' affecting today's residential communications communications marketplaces for me to make any real assessments of in any meaningful ways. The 'fate' of residential ADSL seems to be determined by ever more raucus advertising and, in Telstra's case, by ever more intrusive telephone marketing 'get this free' offers - we received either our eighth or ninth last week - which provide me, should I have been in a position to take up the offer, with ADSL at 20% less than Telstra Wholesale charges Exetel for the same service. To get this service at such a low price I would have two buy two other services at very high prices but presumably the average person who gets such an approach is already paying Telstra those ludicrously high prices or hasn't got the mental arithmetic skills to understand what they are committing to while on the telephone. (a recent churn away from Exetel to Telstra said he thought he was signing up for $80.00 a month but his first two bills were for $120.00 per month but he wasn't able to do anything about it because Telstra told him that's what he agreed to). I reached this 'conclusion' while doing other things last night - probably as a result of torpor induced by over indulgence at Mother's Day lunch or the sheer silliness of whatever was on Foxtel which was providing background noise and giving an excuse not to be involved in conversation allowing the mind to wander in other directions. 'Free' is very much the deus ex machina (or should that be 'MacGuffin') driving most ADSL marketing programs at the moment - well, if not 'free' then at least heavily discounted to an unusual extent. I think it was around 10.30 pm that I decided I had been getting nowhere for so long, over two years, trying to understand how to offer appealing ADSL plans that thinking about how to do that any more was pointless...there just has to be better things to do with a life. Australia has become even more of a nanny state than the Scandinavians over the past four years: http://www.itwire.com/it-policy-news/regulation/46995-stop-the-free-calls-rip-off-says-accan ...for goodness sake - just how far is this nannyism going to go under the current non-government. Yesterday's precious princess who couldn't accept that downloading while making calls on a mobile telephone device was cause for a TIO complaint and this bit of sheer nonsense beggars belief as to what is expected of communications providers. The demands for free services, or expectations that free is some sort of absolute right of consumers has become a total joke. The telecommunications suppliers are now 'hurting' their users because the !@#$%^&* government doesn't answer telephone calls promptly???????????? It must be the begining of the end when such thinking gets media space/time! Because of my background, education and age, I simply don't relate to how things happen and are spoken about now. As Harry so aptly said in 1971 - "a man's gotta know his limitations" - and I am pretty sure I have reached mine. After more than 15 years of trying to work out the best ways to provide whatever the latest communications services were/are at the lowest possible prices to residential users I have reached my use by date and need to do something both more productive and more enjoyable.Unfortunately I am pretty sure I have neither the education or experience to do anything else so the future looks pretty bleak for me. Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46 Sunday, May 8. 2011For Those, At Least Five Mothers.....John Linton ......who read my scribblings on a semi-regular basis - Happy Mother's Day. My mother is no longer with us (and would think that Mother's Day was in September anyway) and my children have come to rely on their grandfather to organise and pay for lunch to celebrate the occasion although their grandmother also has not been with us for several years now.....so the celebration has become pretty much a non event except for sharing the best smorgasbord in Sydney. I did spend some time yesterday looking at the Optus ADSL2 plans but made only a very little, if any, progress. The problem is, at least for Exetel, that our current pricing of back hauls and ports gives us almost no room for honest changes with only apparency available to us. I cited the precious darling yesterday who complained to the TIO that he couldn't make a mobile phone call while downloading from the internet as a definition of how completely unrealistic residential buyers have become - and how quickly amazing new technology (fast internet downloads on a mobile handset) has become a ho hum, foot stamping annoyance when it impeded a precious princess simultaneously making a voice phone call.......the equivalent of a car owner complaining that his car won't go at its rated speed with the handbrake on. One suggestion was to offer a 'build it yourself' plan option where any customer/prospective customer could select the components of their ADSL service based on a monthly price they were prepared to pay. So, for instance they could select a price they wished to pay each month and could then select from a range of downloads, uploads, 24 hour or peak/off peak usage, speeds, email accounts, spam filtering, hosting services, support hours etc that they wanted included in that price. This would be immensely difficult to do but might be a truly new way to offer residential services. How such plans could be invoiced remains a massive hurdle to this attractive concept. Annette just read me an article from the Sunday Sun Herald (which has completely broken my chain of thought on new ADSL services) reporting that the CEO of AAPT is rumoured to be joining the NSW Public Service as head of infrastructure. Having tried and failed to sell AAPT last year in its entirety and ending up selling off the residential ADSL customers such a move would be unsurprising - it appears inevitable that the remaining parts of AAPT will be also sold off sooner or later....either to TPG or iinet....or some such entity. We have been concerned about AAPT's future as an 'independent' supplier for some time and much more concerned following the ADSL sell off. As the third largest supplier to Exetel, and most flexible supplier to deal with we have consistently considered the possible future dangers of the relationship. While Paul Broad's possible move from AAPT and his $A2 million a year remuneration package (as reported in the same article) to the delights of being a senior public servant is labeled as speculation in the article it will soon be confirmed or denied by whatever takes place in the near future. Should he in fact leave AAPT then it significantly adds to the uncertainty of the future 'independence' of the company and makes it almost inevitable that the remainder of the operations will be sold off sooner rather than later. The thought of being a wholesale customer of TPG or some other such operator is not a pleasant one. Oh well, it's a second beautiful Winter's day in Sydney so time to do some chores outside and then trek up to Elanora for mother's day lunch. Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46 Saturday, May 7. 2011A Return To 'Traditional' Winter Weather......John Linton ....in Sydney with a cloudless light blue sky and a crispish temperature promising a warmer day.....spirit lifting and allowing a full option weekend. I have quite a lot of work to get through before Monday but, for once, I don't intend to do more than the bare minimum which is a review of the Optus ADSL2 market approaches based on some possible changes to the pricing and offering of the current ADSL2 services. Because of the various 'difficulties' engendered by the Telstra 'win back' campaigns (now reported as stated by David Thodey as rising from 4,000 a month to 60,000 ADSL services per month = 720,000 per year if that is a true month on month figure) and therefore smaller ADSL suppliers reactions to that pretty massive pressure on their installed customer bases, it is difficult to keep up with the various changes to what is appealing most to the different types of ADSL market places. We have constantly looked at how to improve our ADSL services since we first offered them in January 2004 and have made countless improvements and changes to the residential offerings every year since then. The inescapable pressures of Telstra's 'epiphany on the road to win back' some two and a half years ago has made life, at least for Exetel, very difficult since that time. From what the suppliers and carriers we deal with say - Exetel is not the only communications company that has 'suffered' from Telstra Retail's activities. But, that's normal commercial life - market leaders always react, eventually, to smaller companies chipping away at their customer base and in Telstra's case the huge 'marketing' program has produced huge results - even if it did so with as yet unknown future consequences for both themselves and many other retail market suppliers. So it's difficult to predict what would be the best way, assuming there is one, to structure a residential communications offering in the short and medium term. While not related to ADSL this article pretty much defines the major issue with current residential communications customers: This precious princess is offered 'the world' and expects to get it because he is entitled to it. However the current market place he, and Virgin, are operating in make user expectation and service delivery some considerable distance apart: "....and is unable to download data while on a phone call." ?????????????????? This sort of expectation is the result of two decades of "everything is free" marketing by the mobile carriers that now ensures that customers like Mr Shmulow are dissatisfied with the amazingly good deal they got and blame every apparent issue (dialing the wrong number for goodness sake - boy, is that stretching credibility) on his supplier. Mind you printing this precious darling's wild accusations in my daily newspaper says very little for Fairfax's journalistic and editing standards. But, as I said, it does define the problems currently facing all residential communications suppliers - expectation has exceeded ability to supply a fair while ago. So.....getting back to residential ADSL.....similar issues have to be dealt with. I wish I, or someone else within Exetel, knew how to do that. Copyright © Exetel Pty Ltd 2011 ABN 350 979 865 46 Friday, May 6. 2011The Problem Is Not Accurate Prediction.....John Linton ......although that has to be a key starting point - the real problem is having predicted accurately being able to achieve what is required in those accurately predicted circumstances. I have spent most of this week going through the preliminary steps that are required to produce an operating plan for the coming financial year. In my methodology, which is quite simplistic, I go back to the equivalent time last year's assumptions and decisions and examine what happened to those assumptions/decisions in terms of actuality versus forecast. The most disturbing result of the last few days was that virtually every assumption we made a year ago has turned out to be very accurate but the plans we made to address those assumptions proved to be, largely, inadequate. While we already knew this having slogged through this most difficult year in Exetel's existence, it is chilling to see that while you can pretty accurately define future market conditions and likely 'events' you are so powerless to address them in any ways that will mitigate their impact. So it was a 'sobering' week for me and not encouraging in believing that the next six or seven weeks will be any more useful than the equivalent period last year. Without plunging too deeply in to the 'gloom and doom pool' it was significant that we actually managed to grow the business, pretty much in the directions we wanted to over the almost 12 month period but not, by any means, as much as we had planned and we certainly failed to achieve our planned targets in residential ADSL and residential wireless and only really 'marked time' in residential mobile and voip services. The 'bright spots' throughout the year were the business market developments which, although not meeting the targets planned for them in May 2010 continued to progress month on month throughout the period. In beginning to make decisions on what could be possible in FY2012 the major issues remain pretty similar to those of a year ago. While it would perhaps be overly pessimistic to consider things might be as tough or tougher than over the past twelve months that is, at least, a possibility and any sort of planning would have to assume that could be the case. So a pretty big down side to any sensible business planning for the coming year. On the positive side are the fact that the company is a 'year older' and the initiatives we took two years ago have generated more experience in our inexperienced personnel new hires over that time.......and well over half Exetel personnel have been with the company for less than two years. Another 'plus' is that there are significantly less competitors than there used to be but that carries the negative that the remaining competitors are bigger than they were two years ago. Overall, I don't think we made any progress over the past week or so in determining the key objectives for FY2012. Worse than that though is that such thinking tends to become increasing conservative as you assess the likely problems that may be encountered in the future. It very much depends on your mind set at any particular time when you try and address future issues and if you allow yourself to become too conservative then you will almost certainly fall into the 'self fulfilling prophecy' situation where you anticipate the worst and therefore 'plan' to make it happen. Conservatism should never play any real part in planning anything - apart from anything else it is demotivating for the people who will be involved in carrying out the plans. One of the things that we may use with residential ADSL plans is to not meter downloads in the 1 am to 9 am period. The new plans we currently offer just have very large download allowances for the month which are more than 99% of our users download but I continually hear about "the negative effect of not offering free downloads like every other ISP". ( a bit galling for Exetel who pioneered the whole off peak concept back in March 2004). I don't see how it appeals to anyone with a 200 GB down load plan but it might be worthwhile. The only benefit in considering things from a conservative view point is to be able to see just how dull things would be if you ever planned anything with a conservative outcome. Copyright © Exetel Pty Ltd 2011
Thursday, May 5. 2011Telstra Finally 'Discovers' VoIPJohn Linton I got around to considering what David Thodey said the other day/evening about Telstra's sudden embrace of VoIP: http://www.zdnet.com.au/telstra-invests-600m-in-voip-upgrades-339314187.htm I have always understood the very negative things various Telstra personnel have said about VoIP over the years have just been a refusal to face the reality that they made a fortune out of PSTN voice minutes which were being eroded by the sensible people using VoIP at something like a quarter of the overall monthly price. Exetel has been using VoIP itself and sellling VoIP services to business and residential customers for five years and many other suppliers have done the same. What did give me pause was the comment that Telstra was going to spend $A600 million over the next five years to make the service viable for business users and that they wouldn't be offering it to residential users because they couldn't guarantee the quality without the upgrades: "Telstra would not yet launch VoIP services to consumers, Thodey said, I take this as a slanderous swipe at every other VoIP provider in Australia that has offered VoIP to residential customers for over five years without a problem (we have been using VoIP at home since 2005 with no issues) - then again we don't use the apparently deficient Telstra PSTN except from our home to the exchange and therefore, the only conclusion this statement can infer, is that we don't have to chance using the under provisioned Telstra back haul. But that obviously isn't the case because we have thousands of VoIP residential users of our VoIP services using a Telstra ADSL infrastructure in almost every location in Australia where Telstra ADSL is available. So perhaps it's just another Telstra stupid and obviously untrue statement to try and justify why they are still refusing to offer VoIP services to protect their PSTN call revenue. The other interesting point about the comment on investing $A600 million into the PSTN network is they obviously view that investment, to be made over a long time frame, to be viable financially. That would seem to mean that they don't think they'll be decommissioning very large parts of the PSTN in any time frame less than five or so years....which is an interesting view of the NBN2's current viability. Sure, the ROI on such an investment would be very short and the amount, for Telstra, is trivial (far less than the cost of this year's win back programs) and certainly any actual use of 'NBN2' where the PSTN is 'ripped up' would be a seamless transition......but.....interesting in that regard. Exetel, as a not very large company, has had zero PSTN telephone lines in its North Sydney office since we moved from our old offices some three years ago and has only had four telephone lines in its Colombo office since that was opened about the time we moved from to the current Australian offices. We have well over 5,000 smaller business customers using VoIP over 'residential grade ADSL' and I'm sure every other reasonable sized ISP (with the possible exceptions of Optus and AAPT) have many more than that. So I guess we could say that Telstra has finally concluded it has to stop ripping off its smaller business customers via its PSTN call charges but still insists on ripping off its residential customers by pretending - against all evidence - that VoIP somehow doesn't work over its own network. A true Red Queen nonsensical statement....but, sadly, by a sensible CEO of Australia's dominant communications company. Copyright © Exetel Pty Ltd 2011 Wednesday, May 4. 2011The Time Has Come.....John Linton
......not just to talk of many things (not shoes and ships and sealing wax nor of cabbages and kings) - but to make some serious assessments of what is most likely to happen over the coming two financial years. Each time we begin the year's major planning process (for the coming financial year) we start by trying to assess what 'market conditions' will be over the next four quarters and the most likely 'trends' we will encounter. At this time last year we predicted pretty accurately (it was pretty damn obvious) that FY2011 would be an extremely difficult year for companies such as Exetel and also for companies much bigger than Exetel.....and as FY2011 draws to a close that 'prediction' has proven to be 110% (or more) correct.The difficulties encountered over the past twelve months have been severer than our most pessimistic views in May 2010 'predicted' and, if anything, conditions generally are worse now than they have been to date. Looking forward over the next 24 months is not looking any easier than it did 12 months ago which means, if that assessment is correct in the various 'areas' assessed, we have to make a series of very, very tough decisions. One of the first 'bellwether' scenarios being assessed at the moment is the ongoing supply of 'NBN2' fibre services in Tasmania. These have been very poorly received to date even though NBN(Tas)Co makes no charge for the actual monthly port rental. The main reason is the sheer stupidity of the political pork barreling in selecting three small 'towns' which had very little demand for such services as the initial location for fibre services (totally decided to improve Tasmanian State Labor election chances and the next federal Labor election chances resulting in spending over $500 million dollars to connect far less than 1,000 users. It is an early indication of the danger of mixing cheap politics with technology decision making particularly when the overarching egotism of Labor politicians is the key component of the decision making. If we were to look at the lack of success Exetel has achieved to date and the lack of success the other ISPs who have made fibre offerings in Tasmania (on the assumption that the figures Stupid Stephen has provided are accurate) we would be foolish to continue to offer such services there. Of course this may positively change once NBN(Tas)Co 'lights up' additional areas where there is more demand but it is approaching 12 months of that not happening with only vague promises and a great deal of talk of 'budget difficulties' which don't give us much confidence to continue to lose money in the current bleak conditions. We either have to invest more money or cut our losses in the near future. Right now it would require a lot of persuasion to invest more money. And that scenario, while not being very large, pretty much describes more than a few other scenarios - no positive near term future outlooks therefore requiring much longer term planning than we have ever been able to do in the past. While being neither a walrus nor a carpenter we do have to discuss some very difficult things over the next month or so and then make some pretty bloody minded decisions on future directions for Exetel as a supplier of communications services. I doubt that it's only Exetel holding similar views. The only positive aspect, if this outlook is correct, is that it will pose equally tough, perhaps tougher, decisions for most of the companies with which we compete. Copyright © Exetel Pty Ltd 2011
Tuesday, May 3. 2011Numbers Are Not Looking Good For 'NBN2' Pricing.....John Linton ...at least they aren't looking good to Exetel. We started the "NBN2 compatibility testing" yesterday - something we have never had to do with every other carrier we have ever connected to. Essentially (and I have made no attempt to understand what we are having to comply with) the testing is to ensure that a router that Exetel buys from Cisco can connect to a router that 'NBN2' buys from Cisco. To say that Exetel, or anyone else, would be 100% sure that such a test would be 100% successful and that the test itself would be completely unnecessary is a foregone conclusion. Why would an ISP using standard Cisco equipment NOT be able to connect to a carrier owned Cisco router? The first example of how a government monopoly adds unnecessary cost to providing a government owned service - it reminds me of doing business with a previously owned government owned communications monopoly. If you read the pricing released so far here: you will get your first hints of how much more an 'NBN2' connection will cost the 'average' end user. This pricing is not 'final' and maybe the speed 'bands' are also not final but at the current pricing of an 'NBN2' 12 mbps service with 10 gbps (approximately what 60% of people on ADSL2 get in terms of download speed and use in terms of downloads the cost to the ISP is going to be something around $15.00 more than, say, Exetel currently pays for an ADSL2 connection from Optus. If you will never be able to get ADSL2 where you live/plan to live then you may well think this is a sensible step forward. If you are one of the people who already gets that speed it might start dawning on you that $A50 billion taxpayer dollars (which the 'majority' of you voted to make happen) are being spent to rip out your current internet structure and make you pay more for a service which will not deliver you your expected "100 mbps" speeds. Perhaps you see those figures meaning something else - I was never very good at reading government reports. I only raise the issue because we at Exetel, and doubtless other people at other companies, have spent so much time since Krudd made his 'NBN1' election promise trying to work out how to maintain competitive broadband residential plans in the fiasco that emanated from that crass stupidity. Now that we are beginning to see how an 'NBN2' service would actually be charged we are not seeing anything we like and definitely not seeing anything our residential customers will like. If it wasn't for the condition that the government has demanded that Telstra most decommission the PSTN once an 'NBN2' service becomes available the 'NBN2' would never get a customer - which buyer, even one as stupid as a Labor voter in the last two federal elections, would choose to pay more for less? Of course the actual ISP/RSP contract may well change over time to provide more realistic pricing/speed equations than those cited in the document I am quoting from. Maybe other much larger company's 'NBN2' contracts already contain different 'structures' - I would have no idea. However we are going to have to put some pricing in place in the near future, assuming we pass the current testing, and it is looking like a difficult piece of arithmetic from what I've seen to date. Perhaps it will turn out to be too difficult for us - that's the way it's looking right now - though we will meet with our current carrier providers during May to discuss what they may be able to offer. Copyright © Exetel Pty Ltd 2011 Monday, May 2. 2011Times Are Not So Much Tough.......John Linton .....as boringly tough. It's actually sunny in Sydney this morning which is always a plus - something you don't realise when you have an extended period of cloudy and rainy mornings - hopefully that change in weather will set the 'tone' for the week. I have a fairly crowded schedule over the next five days with a series of meetings scheduled 'outside' the company as well as a continuation of the internal meetings addressing current issues on top of the work that needs to be done on the FY2012 business plan. I can still remember the days, not long ago at all, when a meeting was an unusual event within Exetel. It seems to me that the different pressures (Telstra win back programs, 'NBN2' uncertainties, various competitor's and supplier's reactions to the first two points) under which the markets have been operating over the last two years or so are producing a 'dullness' that is influencing working days equivalent to the long rainy period that Sydney has suffered from recently. It's obvious a personal view as it's only based on what I read in the media and what I hear and read in my personal correspondence. I had a series of email and telephone exchanges over the weekend with two people I know at least well enough for them to have my email address or personal phone number. Each of these 'correspondents' addressed very different users but they both had the same theme - doing something completely different to what they were currently doing as their current working days were providing no real interest to them. When I listened to what they were saying I agreed that it was a period in the industry when, for long term people the combination of the 'NBN2' and a saturated ADSL market had produced days of 'sameness' for a long period of time now and much of the constant change the industry has generated for the past 20 - 30 years is very definitely missing with a huge amount of mental and physical energy going into maintaining current customer bases and market positions by the majority of companies in the Australian communications markets. While we all agreed the current situation would change within the next two years we tended to indulge ourselves about how we missed the 'old days'. I suppose all that shows is that each of us is not well equipped to deal with static technologies and markets. However it is a fair point that today's markets, apart from being very tough, are also, perhaps for the majority of suppliers, very boring - at least in superficial terms. It isn't exciting or even very satisfying to operate in marketplaces that have apparently lost any interest in innovation and are based solidly from the customer end on price reduction and from the supplier end on customer retention leading to the inevitability of lower margins and supplier failures. Unthinking customers, in any industry and in any marketplaces, tend to drive out innovation or even acceptable service as providers and choice reduces......and perhaps that is as it should be (banks, insurance, oil, minerals, political parties all being pertinent examples of how buyers reap as they sow). In most markets there is no need for a diversity of providers - the base product (money, oil, coal etc) needing no innovation or development to 'improve' them....they are based on immutable objects that a 'silicone valley' cannot invent improvements to. So my conclusion was that little can be done in today's residential markets to improve customer service or service while there is so much uncertainty constraining the 30 years of innovation and change some of us have become used to. If by some miracle there ever is an 'NBN2' in this country then the people who made such a thing possible will see why you need silicon valleys to move an industry forward rather than the dead hand of government. But the current 'NBN2' decisions have been made by a worthless egotist and then allowed to continue by people who have less than zero experience or knowledge of how and why communications technologies, and their delivery, have been optimally achieved over the past 1,000 years. If they had they would know that, not once in a millenium, has any government made any contributions to progress except negative ones. Copyright © Exetel Pty Ltd 2011
|
CalendarQuicksearchArchivesCategoriesBlog AdministrationExternal PHP Application |