John Linton's Personal Musings

.....in Australia in the second decade of the 21st century?

Perhaps the more realistic question should be does it make any difference whether a company is good or bad providing it continues to deliver its shareholders their expected return on their money invested which is the first, and largely, only 'duty' of any commercial company or, more correctly, the management of the company. I can pretty much say, after many years experience, that few if any of the companies with which Exetel deal could be described as 'good' companies to deal with; though many of them deliver a decent dividend to their shareholders. Personally I find many aspects of the companies we deal with to be appalling but that doesn't stop us dealing with them nor does it stop those companies from growing and prospering based on their published financial results.

Most of the companies we deal with have some 'slogan' (a hang over from the 1970s) or a 'mission statement' (a hang over from the 1990s) that 'encapsulates their raison d'etre. Whenever I see such nonsense I am reminded of the four LA cops viciously beating Rodney King to near death on that endlessly shown film clip with the police car in the near back ground clearly showing the LA Police 'motto' - "To Protect And To Serve".....not a lot of protecting and serving going on that day. I think the NSW police 'motto is far more appropriate and far less cringe worthy "Culpa Poena Premit Comes" which at least is suitably aggressive and ominous for what police are supposed to do - no hint of "protecting and serving" by the police in this State. I also have always been amused by the fact it is in Latin when the education standards of the majority of the NSW police force do not give any indication that they can actually understand simple English.

So the PR departments of most companies (not just police departments) provide some sort of meaningless slogan as epitomising the objectives of most commercial companies in Australia - but none of them alludes to making as much money as possible - which is fairly symptomatic of their overall attitude to telling the truth throughout their organisation and to 'outsiders'. All that illustrates is that a company/organisation begins to lie to all and sundry from its inception. If your 'motto' is a lie then what hope is there for anything you do or person you employ being any better related to your stated base reason for existing?

No company can be 'good' without having good managers of people - yet how many companies do - I had one in the almost 20 years I worked for NCR, IBM and Fujitsu. No company can be 'good' unless their basic hiring definitions and hiring skills are fully thought through and adhered to - again, how many companies have those people and processes in place - none in my experience with the same three companies over the same period. No company can be 'good' that doesn't plan with each of its personnel for them to develop long agreed lines that both benefit the employee and the company equally within agreed time frames - in my experience in working for some of the best multi-national companies in the world who aspired to doing that- it never happened other than by lip service.

How do you develop a culture in which the overwhelming majority of people employed in a company do care more about the development of other people and the satisfaction with the company's 'products' by the customers than they do about their own interests? Is it possible at all?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

PS: How's this for irony:

http://www.theaustralian.com.au/business/in-depth/stephen-conroy-pledges-lower-prices-to-come-as-nbn-trial-is-launched-in-nsw/story-e6frgaif-1226104271083

....(apologies to Walt Kelly who used this phrase to address very important issues some 40 years ago when I first became aware of it - and probably first used it in the early 1950s).

I seldom, perhaps once every three years or so, attempt to look in to the longer term future of either the Australian communications businesses or whether Exetel will still be in existence in those future days. Over the past 2 - 3 years circumstances have been so tough in so many different ways I have never planned further than a year ahead and all of my time has been spent on dealing with daily, weekly and monthly concerns....and there have been more than enough of those to fill in any time available. However, perhaps because we have begun to 'install' NBNCo connections I have actually spent some time looking at Exetel's future in an Australian communications world where a new government monopoly will exist within ten years which is already destroying everything that exists today....and, quite possibly, for all the wrong reasons.

Among the many extraordinary things I have witnessed since I arrived in this country in December 1962 has been the passing of Australia from a Federal Democracy to the Orwellian nightmare depicted in "1984". While Orwell based his seminal work on the stupidity of  immediate post WW2 communism in the then Soviet Union our loss of democracy has been at the hands of the US corruption of the political process epitomised by the Chicago Democratic "machine" that was pre-eminent for almost a century - and, obviously, not only in Chicago. Today, the future of communications has to contemplate that it will be 'designed' by the 'masses' based on their requirements to steal entertainment content and to play soul destroying games.

It is not too much of a stretch to say that today's illegitimate Australian government only exists because enough copyright thieves and RPG addicts had sufficient votes to allow Labor to cobble together an unlikely government based on the support of a few one concept crazies. If not for those thieves then a coalition government would have been elected and there would be no 'NBN2' as it is conceived of at the moment. So Australia's communications future is now in the hands of such people. All of the commercial organisations, knowledge, expertise, commitment and 300+ billion dollars of capital investment that played their part in providing whatever communications services exist today is destroyed by the votes of 'the mass' - democracy in action in Australia in 2010.....where 'democracy' has morphed in to panem et circenses.

So the future. Well it is an Orwellian one. The government controls all communications to and from every person at a cost only an incredibly inefficient government can rack up. The last government communications monopoly, Telecom Australia, demonstrated to anyone who is old enough to remember how much can be charged for so little - but, of course that won't happen again the current government asserts - but gives no reason for that assertion. Of course it will be the case - in the history of humanity it has consistently been the case for 5,000 plus years. While it's hard to conceive the current bunch of ill educated Labor lightweights and complete incompetents being capable of destroying what was left of Australian democracy - it is happening.

As I am not planning on developing a lecture series in telecommunications mis-handling in Australia 1980 - 2020 it doesn't matter about developing that thesis in any more detail. Understanding the big bits is all that matters in terms of Exetel (all other communications companies) over the coming years. So, we now have a putative national communications network put in place by 'democracy' and venal politicians instead of multiple technologies offered by multiple commercial competing interests....and this is a good thing? Because?....it doesn't matter any more - it's a given and has to be dealt with.

As I said, I don't think about longer term futures very often and one of the reasons is that it is much too difficult. But the major change in this future is that there is no real competition as it currently stands. This is highly beneficial for Exetel - a company that is tiny (comparatively) in terms of today's giant (Telstra) plus the 'sub-giants' that scale down in geometrical progression from Telstra (mind the first gigantic step - it's a lulu). Should the commercial blasphemy of "a level playing field" actually exist in the future as the current government insists it will - ('NBN1', our boys in Afghanistan and Iraq will be back for Christmas, there will be no carbon tax.....) but commercial reality insists it never can,then I can see that Exetel has an extraordinarily bright future providing it continues to change. I can't see much of a future for a lot of other companies though and I can't see much of a future for residential end users enjoying very much at all.

I will have to write a 'position paper' over the coming months to underpin the obvious changes that Exetel will need to make to optimise our 'position' in the coming years - assuming the conclusions I have alluded to do in fact become reality.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

The July month, always a difficult one, will finish up quite well for Exetel with all areas of our business above the quota's set for them - something that hasn't been the case for a while. It's always good to get the first month of any financial year away to an above target start because it doesn't happen that often - it seems optimism is always a part of setting the first months target for a 'clean sheet' year. We also finalised our customer referral offering for August which I think better uses the 'promotional dollars' that Optus has provided to us by passing all of them on to our current customers rather than using them for new customers. I feel better about giving other people's money to our 'friends' rather than to 'strangers'.

So just as I was contemplating a job well done I received another 'threatening email' from AFACT. Why they would bother with a company of Exetel's size (we have less than 1.5% of the residential ADSL market in Australia) I have no idea other than they want to pick off what they perceive to be the weakest ISPs first....an attitude/tactic I personally despise. Personally, I wish they had won their law suit against iinet but they managed to lose an 'unlosable' case via appalling legal advice and even more inept case handling than usually occurs when egotistic lawyers assume their grand intellects actually comprehend the minor complexities of technology - my personal experience is that while, at least in our case, our instructing solicitors may take the time to understand the points at hand, experience is that eminent SCs  spend no time at all (let alone asking questions that may reveal their ignorance of the topics) and therefore almost never have a clue - as was amply demonstrated in the AFACT vs iinet law suit.

If they had won their 'unlosable' law suit rather than obtained the very poorly worded negative result with a more cogent dissenting opinion we would not have this lingering uncertainty. Now, we have to go through the whole thing again because so many people lied and were not held to account for their lies. I suppose Exetel will have to spend more money getting new advice from the best SC in terms of real understanding and knowledge of copyright law in Australia and whether the AFACT vs iinet law suit has changed his original advice that we have no obligations whatsoever. A PITA, but one more waste of money and distraction in our working lives. Exetel obeys the law in every thing we do - we always have.....not just because we are essentially honest and caring people but because in any sensible business you really don't have an option.

It is therefore really annoying to have organisations like AFACT attack your company, not for any legal or ethical reasons, but because they are the sort of people who, when they were five years old, were the play ground bullies and they never lost their lust for propping up their damaged egos by hurting the weak. Those infant psychopaths grew up to be despicable adults whose personal weaknesses are propped up by using other people's money to inflict pain on others. I can't be sure; but I think Exetel has gone further than most ISPs to comply with Australian law to the letter and to assist copyright holders as much as we are legally obliged to do to protect their property. Personally I intensely dislike thieves and recognise that the internet has allowed theft of intellectual property on an hitherto unknown scale. It needs legislation followed by enforcement - no even marginally honest person can disagree with that and better governments than we currently have in Australia have put in place measures to address this issue.......

....it just isn't something Exetel should be involved in.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

of writing a daily blog - despite fierce opposition from "'er indoors" as 'Arfer' might have commented.

Perhaps writing a daily blog for that length of time qualifies me to comment on the value/lack of value to a commercial organisation  of having its CEO wite a blog - as that was the origin four years and a few days ago of me doing so. It was at a quiet lunch in London while Annette was attempting to test the limits of her credit cards in Oxford Street that I had a 'catch up' lunch with an old colleague from my IBM days at my favourite fish restaurant in London - Bentleys. I had never heard of "blogging" which he mentioned in the context of his CEO being convinced it would be a good idea for a CEO of a giant Japanese electronics company operating in the USA to do. That particular CEO made an attempt to write a daily blog but after struggling to post 4 'issues' over the first month abandoned the project.

My colleague cited the overwhelming beneficial reasons containeded in two articles from highly respected US business schools which set out the benefits of why senior executives should take the time (and effort) of writing a blog, possibly a daily one for best effect, and cited  apparently sensible research to support the 'case'. (subsequently he sent me the links to the articles). It was a novel idea to me and one that seemed to be easy enough to do. So what with the pleasure of talking to an old friend, stunning food and far too much of the liquid that accompanies such food I accepted his bet that I couldn't write a regular blog over any length of time which became daily over a year - with some minor allowances for "days off" due to travel/lack of internet access.

I won that bet and subsequently continued to write this blog for another three years without ever missing a day (I don't get sick and internet access continues to become ever more ubiquitous). I long ago gave up keeping count of the seven different benefits that would accrue from this exercise but I can confirm that the writers of those articles were quite correct, in every respect, in citing the material benefits of a daily blog:

"Dramatically higher 'media' exposure of your company, lower pricing from current suppliers, new lower pricing from suppliers you have never dealt with, invitations to address 'associations' that would not otherwise have happened, greater 'regard' by your customers, a flood of suggestions and ideas from your blog's readers and a far better understanding of the company by your employees."

I haven't quoted those benefits verbatim (I lost the article links some time ago) but I think I have conveyed pretty much the exact 'sense' of what was cited. I can confirm that all of the cited benefits have accrued to Exetel in quality and quantity that I would not have (in fact did not) believe(d) before I wrote a word on my return to Australia a few days later.

I am often asked how it's possible to be able to write a blog every day. In my case the key to being able to do this is to set aside a time of the day that is easy to 'reserve' (in my case early morning after I have read the 'media' from around the world on line that relates to our industry) and while I have my light breakfast. When I am away from Australia that time changes to late at night but otherwise it is the way I start each day. Habit is easily inculcated in to any human and the key to daily blog writing, at least for me, is to use habit to optimise whatever amount of 'discipline'  is required - no more than any other aspect of business life.

The second most common question is "how do you find things to write about every day?" Again, in my particular case, I read about our industry widely and there are seldom days when something in the daily media doesn't provide a topic or issue I think is worth commenting on. There are days when that isn't the case which is when I simply write about what is uppermost in my mind concerning Exetel's business operations or plans. I have no doubts at all that what I write is not either appreciated or of interest to many of the surprising number of people who have read my ramblings over the past four years but then it would be impossible to do that for someone of my abilities.

If you have a daily shower then writing a daily blog is no more onerous than that simple (and in the case of the shower - essential) habit.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

For what it's worth 25% of people who are in the Armidale, Kiama and Willunga trial areas immediately (within 48 hours of the email advice being sent to them) responded that they wished to take part in the NBNCo trial. If you were to assume that the 'average' positive response to such email advices is typically around 5% then you could conclude that the end user's view of the NBNCo offering is five times more enthusiastic. Allowing for the fact it's free probably lowers that assessment but nevertheless, and allowing for some further take up due to people not actually receiving that email yet, I would have expected a higher take up. We will arrange to call the non-takers over the next few days to determine whether they actually received the email and why they weren't interested in a trial connection. Perhaps the fact that there are a high percentage of students in Armidale renting premises accounted for the solitary positive response in that area as an example.

So.....while it's far too early to make any sort of 'judgement' on what percentage of users, while they have a choice, will take up the fibre service I think I would be less happy rather than more happy if I was the Labor government. Not 'concerned' (and certainly not "alarmed") but somewhat disappointed. I think one 'straw' was this press release yesterday:

http://www.minister.dbcde.gov.au/media/media_releases/2011/224

I think it gives some sort of view of the level of anxiety in the government and the DBDCE that a small company like Exetel can quietly post some information on its web site (no press releases/no marketing activity of any kind) that affects a few hundred people and have that become a source of government vindication a day or so later. To have the Exetel pricing juxtaposed to the stupid Internode pricing so brutally was also very interesting (a significant benefit for Exetel and a devastating 'swipe' at Internode who apparently fail to see the difference between commercial activities and political trickery). I only cite the press release in the context of the apparent desperation to find 'good news' in the 'NBN2' adventure and what a strange source was used to find that sort of comfort.

Exetel will, of course, follow the installation ease/difficulties and time frames of the fiber installations with great interest as we will the views of our customers who are undertaking the trial. We expect no problems in either of these aspects of the NBNCo performance as the network connections used will be totally 'empty' during the trial period and maximum speeds will be obtained. The 'litmus test' will be to see how many trialists sign up for a post trial connection and the how many of other ISP's customers in the trial areas sign up to Exetel.

So - now it begins...just how will the 'NBN2' be accepted as it gradually becomes available to more potential users and before those users are faced with no choice? A much clearer 'picture' will emerge between now and Christmas.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

0 - The number of entries required to complete four years of consecutive daily blogs.

On Friday we sent out emailed 'invitations' to those of our current ADSL customers in Willunga, Armidale and Kiama who are covered by the NBNCo trial areas. By Monday morning we had received requests to take part in the trial from around 15% of the total 'eligible' and we commenced submitting those 'orders' to the NBNCo yesterday via the cumbersome, '19th Century' facility they have made available at this early stage of development. It will be interesting to see just how the installation time frames and process actually work out and just how 'seamless' a disparate array of end users actually 'fare' with these new processes. By this morning we had received positive replies from 24% of the customers we emailed which, in other circumstances, would be an excellent response but I am surprised that a free trial of a new technology didn't generate a much higher percentage of acceptances.

It will be interesting to see what experience these trial users actually enjoy as I already see various 'claims' being made about 'how much better' one ISP's NBNCo service will be than another. I am assuming people who make such statements are lunatics whose comprehension of both reality and communications networks is far removed from the actuality of the NBNCo network. My knowledge of network engineering is far from comprehensive but it doesn't have to be to understand that NO ISP can influence, in any way at all, the 'performance' of an NBNCo service from the customer's home location to the hand off point between the NBNCo network and the ISP network which is in, currenty, a capital city data centre. Every end user customer connected to the NBNCo network will have the identical experience (whatever that may be) between those two points.

This is the same experience that has always existed on the Telstra, Optus or AAPT ADSL network for ISP's who use those services. If Telstra, Optus, AAPT and now NBNCo have enough bandwidth on their back hauls from pick up points to delivery points then there will be no congestion on that part of the network for anyone. If they don't then the subsequent congestion will affect all customers, irrespective of ISP, equally. Presumably even the lunatics and dummies can understand that simple piece of networking 'lore'. All an ISP can do to negatively affect the performance of an NBNCo service is to under provision the CVC (the cross connect between NBNCo and the ISP) or the IP bandwidth made available to the NBNCo services which only the truly paranoid would consider possible. Why paranoid? Because it would be so obvious that it is being done that no-one would use such an ISP's service. Then again, even the lunatics, dummies and paranoids could not hype their conspiracy theories about an ISP's fibre performance if, like Exetel, ISPs published the performance graphs of all of the bandwidth links used in customer data transit.You have to wonder why that isn't done?

I assume this particular line in lunacy has commenced because Internode published very high NBNCo prices (which will never be used in 'real life') as part of their political campaign against CVC charges and requirements rather than do what the more sensible NBNCo customers have done - point out a better price structure to NBNCo. The subsequent hysteria in the media shocked even me who never expects any knowledge or even commonsense from the overwhelming majority of 'journalists' covering the communications industry. The only issues that will determine NBNCo end user pricing are real commercial ones and those are not yet in place and won't be until Telstra and Optus work out how they will approach wholesaling NBNCo fibre and then selling those services to their own customers. In the mean time it would be nice if Australia's communications media took a far less hysterical line in what they choose to write.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

1 - the number of people considered by the overwhelming majority of the human species as most important in any decision or action.

There is a sadness in our house this morning. We drove our youngest daughter to the airport yesterday afternoon to catch a flight to the UK where she will take up a position with IBM after working for that company for the past five years in Australia straight out of university. Of course it was long past time she should have 'left home' and it is absolutely the right thing for her to do, both personally and for her career, but there is parental sadness just the same.....tears all round in fact for much of yesterday morning especially accompanying the final hugs.  

I have a strangely empty week in terms of events or projects. We will concentrate on making the first month of the new financial year a successful one and do the remaining planning for August. I would expect to spend the majority of the week on our two current longer term projects which are to develop a 'killer' small business product set offering and more tangibly measure the 'quality' of our support operations against their goal of "ensure every caller is happier at the end of your conversation with them than they were at the beginning".

As I have mentioned on several occasions small/medium business VoIP sales have grown enormously since we put that program in place and small business mobile sales are now beginning to show accelerating growth. Our business ADSL has always been relatively strong and are now working on adding the remaining services in to one business 'package' that includes optional consulting support and VoIP hardware. This will not be a 'quick' process but we have made a lot of progress since we set up the outbound sales operation in Sri Lanka with over 30 sales people in Colombo now and continual hiring an increasing number of sales people every month. An enormous amount of effort is still needed to bring everything we have planned in to successful existence but we continue t make progress.

The other ongoing major development is the ongoing improvements being made to support and associated services. When we established these services in Sri Lanka three years ago we set an objective to provide the best support and problem resolution available from any Australian communications company. We based this on paying the highest remuneration, by far, only employing stable and degree qualified personnel and delivering the best training we could to ensure that our investments in this key aspect of our business had the absolute minimum level of staff turn over as we continued to grow the number of people in each of these functions. After three years we have met each of these objectives with the average time in job now a little over two years and our personnel turnover has been maintained as less than 5% per annum.

Our customer feedback mechanisms of complaints, suggestions, forms, TIO complaints (not only do we have the lowest level of TIO complaints we have almost no Level 2 complaints and we have a net reduction in complaints quarter by quarter) and the fault handling rating survey all show positive progress. Using these different mechanisms we have seen considerable progress towards our support/problem resolution goal of 'ensure the caller is happier at the end of your call than at the beginning' and we now need to further enhance the ongoing achievement of that goal. Perhaps uniquely, Exetel's directors read every suggestion and complaint made by an Exetel customer and direct the resolution of those issues personally. We need to improve both the 'measurement' of how well we deal with all calls/emails and to integrate that process, once it is as objective as it can be made, in to the remuneration plans for all Exetel employees.

Both of these longer term projects will undoubtedly fill up any time that is available over the coming seven days.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

2 - the number of suns we will have by the end of 2012?

.......of copper line telephone calls.

One of the eventual benefits of the current Labor governments 'NBN2' is the fact that it allows a customer to terminate the monthly rental of a PSTN line and reverse the current situation where ADSL runs over a mandatory copper telephone line to where telephone calls run over the same fibre line used for data. The obvious benefit is that whatever amount a user is currently paying for a telephone line service will no longer be necessary and telephone call charges will be much less - for most users. Of course this assumes that the customer already has a VoIP capable router and telephone handset(s) and the technical competence to plug in these simple to install devices...not a biggie.

As with wireless broadband being able to get rid of the expense of having to rent a telephone line will be very beneficial to all but the remaining technophobes - a saving of $20.00 to $30.0+ a month should be more than enough incentive to almost every current PSTN user....at least you would think so. As someone whose company has not used PSTN for over four years and only uses MOIP to make and receive mobile calls I haven't actually considered VoIP as anything but a given for all of that time though I am aware that there are still people who make statements about its "limitations" - similar to the people who said the automobile would never replace the pony and trap in 1910....only worse....as Labor's 'NBN2' mandates the termination of the PSTN so it's not as if anyone has a choice.....eventually.

While this is a very long way into the future generally it is here now for those end users involved in the NBN trials in Tasmania, Kiama, Armidale and Willunga. We sent out the 'invitation' emails to current Exetel customers in those locations last Friday and will send a further email on Monday advising them how to test VoIP over their fibre connection if they have compatible equipment/handsets or how to buy that equipment from Exetel is they wish to do so. Exetel have been providing VoIP services for over four years and well over 20% of our current residential ADSL customers use our VoIP service with at least that number using some other company's VoIP service. Assuming the Labor government's 'NBN2' proceeds as planned this provides a participating ISP with the opportunity of increasing the percentage of their customers who use the ISP's own VoIP service quite dramatically. It also poses a threat to 'stand alone' VoIP companies who will almost certainly see their businesses wiped out as, as far as I can see, there is no way that an end user won't use the 'free' VoIP service that every ISP will include in a Labor 'NBN2' service.

I have commented on the extraordinary increase in the Exetel corporate VoIP services - more than 100 last month and almost 150 this month with a week still to go - but the future growth in residential VoIP usage when/if the PSTN is terminated will be even larger - over a very long time frame. For Telstra and Optus this will make little difference as they already have the exchanges in place to deal with large volumes of 'voice' calls but for non-voice carriers it will require very careful planning and execution as well as a fair amount of additional capital expenditure. I did some ball park numbers earlier this morning and it is quite a financial challenge......

......but the upside in terms of revenue and additional hardware and support sales and, 'profit', is quite surprising.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

3 - always a crowd and the most unfortunate number of human beings involved in any aspect of life - will always end in tears.

We have made a sensible amount of progress towards our July targets and are now more likely than not to meet our overall revenue and new customer targets with only business data running behind finishing the month on or above target (though business sales in July are very difficult and usually only pick up in the last week - indicated by 14 new sales on Friday). Too early to become complacent but July is always the most difficult month to bring in on target so the results are very pleasing after three weeks. Business VoIP sales and residential mobile will both set new records in July which will be the first time in Exetel 'history' that a record for sales of any product has been set in a July.

We spent much of the last five days working on the customer referral scheme, and therefore ADSL offerings, and the plan pricing for NBNCo services in the current very limited trial areas.We sent the emails to those Exetel customers in Armidale, Kiama and Willunga yesterday evening offering them a free install and free service until 30th September 2011 and published the monthly charges beyond September 30th on the web site:

http://www.exetel.com.au/residential-fibre-pricing-mainland.php

We will add much more detail to the web site NBNCo pricing as it gets closer to the time that the services will become available to other than current Exetel customers in those and the other NBNCo coverage areas. Personally, I would have liked to have continued with ur Tasmanian 'pricing model' of providing a fibre service based on a monthly port charge plus 20 cents per gigabyte downloaded (no charge for uploads) but the 'me tooism' entrenched by the ADSL marketing processes was judged to be 'a common sense too far' for the current hysterical fibre environment.

The other major time spent was on the Exetel referral scheme for current customers. We have also been discussing this on the forum and have got a reasonable idea of what could be possible. I am far from convinced that some of the more 'radical' suggestions would actually be financially feasible and it will take more work next week before we make any financial decision. However we have got a series of sensible suggestions from current customers and some interesting ideas from our own people so we should be able to come up with a quite exciting referral scheme next week.

Apart from the 'big issues' we had some quite exciting indicator 'events' during the week. One of the most important 'events' was that one of the two Sri Lankan sales people who is currently in Australia for training made her first business data sale from go to whoa from her own efforts - in less than two weeks. It was a good example of Exetel's "business sales process" but a very good indicator of how outbound sales is developing for the Sri Lankan sales personnel and has an absolutely massive impact on Exetel's future.

The other very significant 'event' was the outbound sales force in Sri Lanka racked up their second successive month of more than 100 business voip sales in a month - and with five working days to go they may well reach 150 new business voip sales in a month. Again this is an indicator with significant ramifications for Exetel's future plans and developments in a post ADSL world.

So, a productive and more enjoyable week than most.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

4 - An over used number but, if I had to choose, then linked to "Yorkshiremen" is my favourite.

....as 'NBN2' moves from wild election winning promises to actual cost of delivery.

We have made some progress over the week to date in terms of making our customer referral more 'attractive' and in making other similar changes to several other aspects of methods of operating. Our six months free promotion will be ending in a few days and we have an ability to use a similar amount of carrier new business subsidy in a different way or simply continue the continue with the current type of 'free months' promotion at a reduced rate. We will make up our mind over the coming weekend as to what we will do/which direction we will take after discussing the various options with those of our current customers who wish to make known their views.

We will also send out the 'invitation emails' to those of our customers who are in the 'NBN2' trial areas in NSW and SA later today offering the free install and no charge use until September 30th 2011. This trial allows a customer to retain their ADSL service and use both ADSL and fibre 'side by side' while continuing to pay only for the ADSL service. On or before 30th September they select which service they would like to keep. If they don't want to continue with the fibre service then they are not charged for it to be removed and they simply go back to using their ADSL service at their contracted price per month.

The real issue is what price we set for 'NBN2' services. The Labor government has made a major issue in their litany of idiotic statements about the benefits of an 'NBN2' along the lines of "more speed at the same price of ADSL2". At 'NBN2's' wholesale pricing today that simply isn't going to happen....at least not from Exetel. Why? Because the monthly port cost of the lowest speed fibre service and the 'back haul/CVC' cost is higher than even Telstra Wholesale charge for an ADSL2 service.....and is almost double the cost of an Optus ADSL2 service.....and that the fibre cost is going to get much higher once the 'trial phases' end and the POIs move to their planned 121 locations instead of, as they now are, in CBD major data centres.

Along with the other activities this week we have been looking at how we price fibre services via the 'NBN2' for those trial customers who might wish to retain a trial service beyond 30th September 2011. It doesn't look good to us and is complicated by not having fixed quotes from back haul providers to and from the different 'NBN2' POIs. Its easy enough to work out a capital city price but nearly impossible to work out a price for Kiama and Armidale let alone Willunga. Good or bad we now need to provide pricing for any of our current ADSL customers who wish to participate in the 'free trial'. Our problem is that we don't know the actual costs of the back hauls to/from the POIs that will eventually be put in place. So it's a more than usually difficult task and one that will burn up the remaining time this week.However we will email the trial customers today and put the NBN pricing on the web site by COB.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

5 - The number of fingers and toes on each hand and foot most humans are born with - makes no sense when you think about it.

.......bring to mind the worst excesses of Abraham (This will hurt you much more than me) Lincoln and Chairman (I know what's best for all 500 million of you) Mao?

There are a lot of things to fill a day when the marketplaces in which you operate continue to go through continual changes over a sustained period of time. Most of the things present some degree of 'challenge' which is concomitant with most situations in commercial life. The human species is genetically 'programmed' to deal with continual change better than most/all other living entities on the planet which is why it has 'risen' to dominate all environments except extreme cold, extreme heat and deep water that exist in their various forms over the last 50,000 or so years. However, if you look at any changing environment a little more than cursorily you should see that some humans cope with change better than others and even some of the 'copers' eventually suffer from change exhaustion. From the limited amount that I can see  think more than a few previously very 'coping' people in the Australian communications industry have reached the 'exhaustion' stage.

The most obvious example in 'modern history' were the actions of the lunatic Mao Tze Tung and his "cultural revolution" which consigned the nascent PRC into chaos, starvation and misery unequaled in the planets history and was responsible for an estimated up to 70 million deaths of the people he consigned to that living hell - conceived and carried out by one man who was clearly clinically insane and millions of very young psychopaths whom he influenced. Just one more example of humanity's greatest weakness. Apart from the forced actions of lunatics in leadership positions (think 'NBN2', Carbon Tax) the day to day actions of every aspect of human 'society' produces too many changes on too many occasions generated by people with too much power and too little knowledge using people with too little intelligence and too much self interest.

If Mao Zedong's "cultural revolution" is a 'modern' reminder that the human race has major flaws in its genetic make up then it is also a reminder that change, even possibly beneficial change, is not something that can be accomplished by decree nor can it be accomplished in short time frames....but that's only 5,000 years of human history demonstrating that is the case - without exception.....and who bothers to read, let alone study, history these days. Among a huge number of contenders for the prize for most stupid act of achieving a beneficial change in a relatively short time at the most horrendous price in terms of human life and least effect must go to the war between the States from 1860 to 1864 which ended in the deaths of 4% of the male population of the USA and destroyed a significant part of the country for three generations while achieving practically nothing that wouldn't have been achieved more humanely anyway in only a slightly longer time.

What has any of this got to do with mild business change within the Australian communications industry in the early 21st century? Well, it may not seem apposite but in its way it is destroying an increasing number of people's working lives for no good reason at all judging by the number of people losing jobs with very little chance of continuing their careers in the previously preferred direction and at their previously preferred remuneration levels. The 'NBN2' has eerie echoes of Mao's "cultural revolution" and Lincolns "civil war" (apart from the huge loss of life and immense infrastructure damage the "civil war" resulted in the most devastating continuing negative effect on the whole of the world to this day - the US armaments industry) in that silly, uninformed (and in Mao's case just plain insane) people make ill informed decisions that ruin unknown numbers of people's lives doing something in the most expensive way possible to achieve practically nothing - other than very bad things for the huge number of people crushed, one way or another, by their irrational decisions.

Then again - perhaps it's the weather.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

6 - the number of days it took a minor Semitic god starting on October 23rd in 4004 bce to create the planet, everything on it and the rest of the universe.....at least according to another lunatic, the late and very much unlamented, Bishop Ussher.

......which could be a little different this year.

The new year continues its steady start at Exetel with an increasing number of our operations meeting the DBD targets which is always a good thing. For most companies in this, and probably most other industries, the focus in July is on how to present the actual results of last year's activities in the best possible light....either to the ASX if they're public companies or to their limited number of shareholders if they are private companies like Exetel. In Exetel's case there are only three shareholders and they have access to all of the companies figures on a day by day basis as they all work full time at Exetel - so our shareholders never have any surprises - good or bad.

I will be particularly interested in Telstra's results this year to see just what their large expenditure on 'win back' activities delivered to them. I couldn't work out how the six month results could be described the way they were presented and it will be interesting to see the twelve month 'picture'. The normal comic turn will be the Eftel results which will have to explain how the company has been so successful it had to give away 75% of its shareholding for nothing to allow Dodo to inject enough cash (circa $2 million) to stave off its creditors (the $2 million didn't go to its shareholders). Doubtless it will be described as the latest successful Eftel acquisition rather than the desperate end to a poorly conceived and incredibly badly managed business failure.

As usual the iinet results will be presented in such a confusing way in terms of actual figures and such a hyperbolic way in terms of marketing spin it will take someone far more skilled than me to work out where the company is heading. Similarly the TPG results, which will be reported much later, will make for interesting reading. Although they are much more simply presented (previously no iinet like obfuscation) the underlying trends will be fascinating to read. Optus' twelve month results, from what I can gather, will only be 'saved' by their mobile growth (as usual) which is no bad thing but unexciting - to me. AAPT's and Vodafone's results will also be interesting in terms of how a major sale on the one hand and a major network problem on the other will impact their results. The only other results I am personally interested in are those for Macquarie Telecom - not for any other particular reason other they are reseller of communications services that are a guide to some of the things that Exetel wants to do in the coming year.

The overall 'performances' of the major companies over the past year will tell us a great deal about the most likely things to happen over the coming twelve months with the minor companies adding some 'colour' to that 'picture'. Of course, the year will be well under way before those results are published and the ABS six monthly statistics will be even later. I see the coming year in a far more relaxed way than I felt at the start of the two immediately previous financial years and I'm hoping that isn't because I have become so worn out by dealing with the unrelenting problems of the last 30 or so months that anything looks better. There are increasing numbers of moments when I am quite excited by the changes we are making and the new targets we are beginning to put in place. We have put in so much time and money into building the 'foundations' that will allow us to change our business it is a pleasure to think we might now in a position to make some real progress.

In the mean time we need to ensure we 'make our July numbers'.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

7 - the number of hills upon which the greatest city the world had ever seen were built.

....only the inexperienced expect the good times to be unending.

I read this earlier today:

http://online.wsj.com/article/SB10001424052702304567604576451911276767854.html?mod=WSJ_Tech_LEFTTopNews

which I found a little surprising because the US wireless providers are rolling out LTE across more and more of the major cities and, as it notes business is booming, there seems to be no reason why employment wouldn't be increasing rather than decreasing. Perhaps the US wireless companies have developed new levels of efficiencies? Perhaps they are preparing for a downturn? I am receiving an increased number of resumes from people who have worked/are working in the communications industry for various lengths of time over the past few months to a level of approaching one a day so that seems to point to some sort of overall decrease in the number of people employed in the industry in Australia. To date we have employed one very senior person from this increasing number of enquiries though we have been tempted to hire others on more than one occasion.

One of the major problems that most/all Australian communications companies are facing at the moment is what to do with all the dead wood they have accumulated during the easy years of easy sales of first mobile telephones, then wire line re-selling followed by the boom in ADSL. The easy dollars concealed the poor hiring and even poorer management of the growth of most Australian carriers and providers and the growth also went on long enough to permanently obscure the capabilities of the people that were hired and the ability of any level of management to do anything about that ongoing problem. The perceived need for more and more people together with inadequate hiring standards and management involvement in the hiring and subsequent personnel development processes has built a major ongoing problem starting with the 'dilution' of standards and continuing on through that self consuming scenario.

This is nothing new nor is it 'reprehensible' - it is a common problem experienced by almost every company that goes through 'a boom period' which makes even bad decisions appear to be almost good because the markets keep growing. But then the music stops - saturation of markets eventually stop the growth dead in its tracks - it is almost never a graduated slow down. When the easy dollars stop pouring through the door any company has to make 'adjustments' but few actually manage to make these 'adjustments either in a timely manner nor do they make the correct 'adjustments'.....because the decision making management seldom actually know the capabilities of the people they employ and any knowledge they do have is now enveloped in the panic and subsequent obfuscation of the managers they have put in place during the good times. How does this sort of task get done?

http://gigaom.com/2011/07/18/cisco-layoffs/

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8645864/Macquarie-urged-to-cut-1000-jobs-as-shares-slump.html

Every part of any company facing this scenario is simultaneously and suddenly negatively effected....except Human Resources who I have observed over the years increases in numbers disproportionately while a company is in a 'hiring boom' but remains the same size, or gets larger, during the inevitable firing 'boom' - there is even more work, and a lot more expense, involved in getting rid of employees than there ever is in hiring them in the first place. Yes I know, a very cynical view, but as night follows day this is what happens when a company has been stupid enough to allow anyone but senior managers with an in depth knowledge of the company's requirements become involved in hiring decisions. Would there be anyone at Cisco who would know whether their planned 9% employee reduction was going to only get rid of unproductive employees? Would anyone at Macquarie Bank know which 1,000 people to fire?

It seems that I am now not the only person who recognises that NSW is in a recession and has actually never recovered from the GFC. As I have noted in these ramblings several times over the past two years business conditions have been increasingly bad in most of the State. It will continue to get worse for all the starkly obvious reasons that are now being reported but have existed for a very long time. I take absolutely no pleasure in making that assertion - indeed I only commented on it over the last 2 - 3 years because it so negatively affected Exetel. I guess that was why I commented on the cited articles - even in booms, sensible companies look at their personnel growth because they know there will inevitably be a bust.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

8 - the proverbial ball behind which it is really bad to be.

......which means for those of us whose knowledge of Latin and/or knowledge of catch phrases is less than stellar - sieze the carp.

There's a lot of uncertainty in many aspects of the Australian communications industry at the moment; at least based on the various actions and statements by the larger suppliers and the major carriers that seems to be true. I seldom hear from our suppliers on 'weekends' - perhaps once every six months or so but this weekend must have been different.....I was contacted by every supplier but one. All but one of those contacts was a request for a meeting or a request for my thoughts on a new 'initiative'. As I have met very recently with our three carrier suppliers and most of our other major suppliers I found this level of contact, astonishingly on a week end, more than bewildering. I have no doubts about where Exetel 'stands' in levels of importance to our suppliers (around tenth or lower in buying size and importance) with the size of purchases being miniscule compared to those of the top three (who buy from each other) and everyone buys from Telstra:

Telstra, Optus, AAPT, TPG, iinet, M2, Internode, Adam, Dodo, (perhaps Exetel) so it surprised me that Exetel would merit attention from our suppliers and not in these cases from our usual contacts within those suppliers.

I have commented many times on how tough the last three or so years have been with major future structural changes likely in some unknown future time and the massive shift by Telstra in its approaches to various markets. I have probably spoken too much about Exetel's planned moves away from the residential market places that currently dominate our operations and our desire to counter the changes we see happening by moving firstly to addressing medium /large businesses and, in this financial year, moving to address the SME markets. These 'ideas' are hardly incisive/shattering insights in to the current states of the various market places - or so I would have thought. However all of the contacts I had over the weekend, bar one, were based on 'working together' to make our ill defined plans to target 1,000,000 small businesses work better. While it's true that we have been building two quite successful sales forces; one to address medium/large businesses and have begun to develop a second very promising sales force to address SME businesses these are both only in the very early stages. At least one, possibly, two of the weekend approaches are well beyond our current capacities or even the capacities we plan to build towards over the coming year....but they did 'spark' some new concepts.

I had intended to do some 'serious' work on defining how we could accelerate our 'penetration' of the SME markets which are a massive opportunity for us (and, apparently, everyone else) over the balance of July but it would seem the amount of effort we need to put in to this are of our business is much more than I had originally planned. The major attraction of the SME markets are that there is no current provider that offers services to them that aren't simply residential products at more expensive prices with the same terrible support they provide to residential customers. (a cynical view but basically quite correct). The other major difference in this 1,000,000 potential customer market is that it can't be addressed by the ways the larger providers use. So the 'trick' is to find an explicable product set and, far more importantly, a new way of supporting that product set that will rapidly 'scale' if the business plans are successful. That is not an easy thing to do - if it was, it would already have been done.

So - we need a lot of new, good and most of all practical ideas, to take advantage of this opportunity. We have at least three major advantages over all of our competitors in addressing these opportunities which may have accounted for my weekend email receipts.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

9 -  the number of elements in the annual event that always entrances me and has done since I attended a live 'performance' at, coincidentally, the age of nine.

......is actually not true at all....in fact it's often the reverse.

There are so many things to do when you run a business, of any small to small medium size, that you could 'work' all of your waking hours and never complete all of what is required. If you own your own business then you tend to work harder if that was possible. If you then decide/have decided for you that you need to change the business from its main areas of operations to different ones in very difficult business conditions you can truly begin to understand that working every second of of every waking hour and then dreaming about business when you go to sleep that some people claim to do may well be true.

Exetel, and probably the rest of the Australian communications industry,seems to be going through one of those periods. I wouldn't know where to start in terms of defining what the main driving forces are that is causing this upheaval other than to take the easy option and say it all started when Telecom Australia was 'privatised' in such a stupid way which lead to the current Labor governments meat cleaver approach to attempt to remedy that error in the worst of all possible ways.....by re-creating a new government monopoly to replace the monopoly. I am a sensible person, in some ways, and I have enough knowledge of history to know that all stupid errors by any group of people from local communities to 'world bodies' are self correcting over time.The problem is always that while the time passes during the correction process all sorts of people get very badly hurt.

So, in our small way, Exetel has had to spend the bulk of the last four years dealing with some very large changes in the 'general marketplaces' in which we operate and the even greater changes we have decided/had to make to deal with those changes within our company. The most obvious change has, of course, been Telstra's decision to regain its lost market share by changing itself from the most expensive provider of simple residential communications services to, in some cases, the least cost supplier with the consequent massive changes to market shares of those services it deemed important to its medium and longer term future. The results of Telstra's efforts over the past few years have not yet become apparent (unless you keep the books within an Australian communication company) but they will become more apparent in the near future. Currently all that is apparent is that the number of small ISPs and small communications providers is even more rapidly disappearing....but that isn't even a vaguely relevant fact (unless you are one of them).

The major effect of the new circumstances has been, and will continue to be, on the largest communications companies - they are the ones that for two decades have been able to grow under the 'umbrella' of Telstra charging sky high pricing allowing them to grow and prosper by setting their own prices only slightly lower than Telstra's and taking advantage of the 'natural' growth of the market places. They actually didn't have to do anything but make Telstra's services available via a wholesale agreement and then let the inherent growth make them rich. That has now irreversibly changed in two major ways. Firstly Telstra won't allow that to happen any more and secondly the 'natural growth' has stopped with ADSL, wire line telephone charges and even mobile voice all reaching saturation points where there are no net new customers or revenue volumes.

But that isn't the really 'bad news'. The really bad news is that EVERY larger competitor to Telstra has built up a huge amount of 'fat' both in terms of number of people employed and the number of systems and processes they have in place that simply don't work effectively (in some cases don't work at all). ALL of these companies are now confronted with two massive problems that 'economy of scale' make even more difficult to solve. The first is that they no longer have good enough management throughout their 'hierarchies' to actually run the business efficiently.....worse the management at the top of their organisations no longer knows how the hierarchies and processes within their company actually operate - who/what is good and who/what is bad. The other element is that the pressure on revenue/profit is going to be almost impossible to address via a saturated market and the consequent constant loss of customers to Telstra's ongoing win back programs coupled with the lower ARPU that has already brought about.

That twin 'disaster' scenario will only become apparent over the coming financial year.....although it has been happening for quite a while now. The saturation/market forces of the Australian communications market places will 'hurt' large providers who have 'economy of scale' more than they will hurt small providers who still know what everyone in their organisation does and how well they do it. If any of the people involved in managing in larger companies had ever paid attention in whatever history classes they were exposed to they would be aware of the fallacy that 'economy of scale' only works, where it works at all, in a rising market. In falling markets large organisations have no idea how to effectively 'right size' - especially at the top of their organisations.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

10 -  For people of my age; irrevecobally associated with Paul Collin's daughter