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