Wednesday, August 31. 2011A Very Good Month......John Linton ....far better than July and, with the minor exception of residential ADSL (where total new customers were slightly lower than August last year but revenue from those fewer customers was well up on August 2010) we had record months for new mobile customers, by a very,very long way with a day still to go, and will almost certainly exceed 150 new corporate customers in a single month smashing the old record of 131). So a good all round effort in terms of sales and revenue - a great relief after the struggles of the last few years. I can almost feel the give as the wheel finally becomes free of the mud. I also realise that one month does not a financial year make........but, as Forrest would say - "one less thing to worry about". Not that having one less thing to worry about reduces the 'worry list' noticeably and there are more than enough quite obvious signs of things that need serious attention if not completely re-thinking in our current business to more than adequately fill any time that may become available for their consideration. One of the more immediate considerations is the annual IP bandwidth 'negotiations'. We received an invitation for Steve and I to attend NTT's global conference on IP and other issues. One of the sessions was headed "How To Deal With The Plunging Price Of IP". We have already advised one of our current IP providers that we will not renew their contract for IP services beyond the current end date and will shortly make it very clear to the other providers what we expect this years contract renewal prices to be. Unfortunately I can' find the time to attend (much as I love Tokyo) but it will be interesting to see what Steve learns from the speakers ad the attendees. I have always disliked these 'negotiations' and am pleased that I will not be involved in them this year. I am always embarrassed at the lies told by suppliers about the state of IP pricing which is overtly and blatantly contradicted by easily referenceable facts published in many industry reports. So these 'negotiations' start, from the supplier's side, with our account manager and usually his product manager for IP spinning a pack of lies about current market pricing which, when I was acting on behalf of Exetel, would be refuted by me giving them various references to what is on offer from every other supplier but them. There would be some huffing and puffing followed by an ignominous retreat 'to consider what we may be able to do about meeting your price' - on their part. Very occasionally over the past almost eight years a very foolish supplier representative will (presumably at the urging of his management) tell us that we should go and get the pricing we cite from someone else because "that pricing is impossible to provide". On those occasions we have done exactly that and, no, we never 'bluff' about something so serious. From the limited information that I can find, the largest buyer of IP in today's market in iinet who buys their IP from Telstra - something I found strange but assume it's because of some sort of overall discount from the pricing they pay for other Telstra services. Looking at what we 'know' about the price iinet pays Telstra (and we can't possibly 'know' what their contracted price is) we are looking for a per gbps price of around 50% less for IP in this year's negotiations. My view is that all IP from SX or NTT is the same and with the exception of the TPG/IP1 service which I accept is of lesser calibre there is no justification for paying any more than the SX wholesale cost for the size IP we are contemplating. Perhaps buying direct from SX would save a lot of embarrassment all round....but then NTT do have better Asian routes and are able to provide SX at very close to our target price. So, I am pleased not to be directly involved in such discussions any more and even more pleased that I can relax today and see what the final sales results for the month are and complete the final internal discussions slightly revising September's targets. One sleep to go. Copyright © Exetel Pty Ltd 2011 PS: Who said the nanny state syndrome wasn't all pervasive in Australia. Frequent Flyer points on emergency charters?
Tuesday, August 30. 2011A Better Place To Be.......John Linton ......as Harry Chapin once observed in one of his most memorable songs. (at least memorable for me when I saw him sing it in a Minneapolis high school gym on a freezing night almost forty years ago - or it might have remained memorable for the trip from and to Rochester on icy roads with the return trip made even more interesting by the quantities of Jim Beam, hash browns and funny tobacco consumed on the trip there and during the long 'concert'). For some reason the words of that song have been in my head for the past few days and as anyone who has had that annoying experience they just won't go away. Perhaps its a longing for far simpler days and the sometimes passionate, sometimes strange, sometimes devastating relationships of your early 20s that recalls the music associated with those times. It's possible that I was never happier up to that time than in the back seat of that bald tyred, eight year old clapped out Pontiac that night....quite possibly significantly enhanced by the chemical influences at work within my head and body at the time. We are having the best business month for, well, for as long as I can remember and August will finish well above all of our key planned targets in most areas of our business. This a very good thing to happen when you are going on holidays in two days time and, obviously, infinitely better than the reverse. Of course the stresses and strains involved in trying to do too much in too little time prevent any euphoria developing and yesterday had more than its 'fair share' of jolts and idiocies mostly generated by the parasitic clowns and drongos employed by the Commonwealth Government who seem to inject a never ending stream of time wasting idiocies into my life at the least opportune times. However, what can you ever expect from people who have never held a real job in their lives and who have no concept of how to make any sort of contribution to the society in which they live? I sometimes wonder about how deeply cynical the sense of humour the person who coined the phrase "public servant" must have had. I think this recent article clearly defines what a "public servant" considers to be the entitlements of their job (all judges are "public servants"): So perhaps the Chapin song is caused by a desire to go somewhere/do something where I don't have any need for contact with people who work, and I use that word in its loosest sense, for commonwealth government departments whose only purpose seems to be an adjunct of Centre Link where the unemployable are given telephone and internet services to keep them amused (and off the streets) for periods of some days of the year to provide an illusion that they are 'earning' the money paid into their bank accounts - the equivalent of the work for the dole scheme put in place for parasites who can never grasp the concept that they are responsible for their own lives. I think its mostly the frustration a relatively hard working person feels when they realise that the taxes they have paid for almost fifty years have been frittered away paying for these no hopers to screw up everything useful in Australia in whatever way their severely restricted reasoning abilities can think up. Perhaps it is just another sign that the strain of working very hard to accomplish very little becomes too much to bear when you, yet again, realise how completely hopelessly Australia is run by the 'executive' layers of worthless dross that permeate what is laughingly termed Federal, State and Local Government public services. It is at moments like these that I long for an Australian version of the cultural revolution where all 'senior public servants' would be sent to the far North to dig canals for ten years with the only shelter being what they erect themselves and the only food what they can find in the most arid of Australian landscapes. Alternatively - just shoot them like the parasitic vermin they are. I hope your morning has started better than mine. Copyright © Exetel Pty Ltd 2011
Monday, August 29. 2011Wireless Broadband - Still A Mystery To ExetelJohn Linton We are still trying, and failing, to find a sensible way of offering mobile data services to a wider demographic. Our current offerings are only good enough in the market place's 'eyes' to maintain overall numbers of customers where they have been for the past eighteen months while other providers rapidly grow there customer bases, taking advantage of the rapidly growing demand for wireless services. Price/cost comparisons seem to show that the prices we offer for the download inclusions are as good or often better than the main competitors and the quality/speeds obtained on our 'premium/layer 2' service are superior to all other Optus resellers or Optus itself. It is a conundrum. It also surprises me that the take up of the premium services continues to out strip the standard services. I very much doubt that I will be able to come up with something that will turn this situation around over the next three days (having failed to make it happen over the past three years) but it is deeply frustrating to fail so badly for so long and after putting in so much effort....and investing so much money. I have been contacting some of the customers who have canceled their Exetel mobile data service to see if I can find a pattern over the past few weeks - I haven't found anything at all and it would be reasonable to say that what I have found is even more frustrating. Of 46 people with whom I have been able to make contact: 18 said they had no further need for the service as they were using the data allowance from their mobile phone plan 11 said they swapped to Telstra because of better coverage/faster speeds 8 said they switched to another Optus reseller as Exetel's coverage was unusable 6 said they switched to Vodafone for a much better deal 3 said they had no further use for any wireless service I realise the sample size is far too small to mean anything sensible (especially the 8 people who switched Optus resellers looking for an improvement in performance) but it probably does point out that Exetel's ability to promote wireless broadband after almost 4 years of trying different things is woeful. Some 2 - 3 months ago I conducted another mini survey by contacting 100 recent new customers as to why they selected an Exetel service. 62 said it was recommended by a work colleague with a further 31 saying it was recommended by a family member or friend...the other 7 said they were Exetel customers and simply bought it from the user facilities. On the plus side, of 48 who had used a mobile data service from another provider 38 said the Exetel/Optus service was noticeably faster with the other 10 saying they hadn't noticed any difference. None said it was slower. I will, as usual, buy one or other of the short term wireless services while I am in the EU and also look at the general pricing per GB per 'dollar' as well as seeing what speeds are now available in London and Paris as well as the depths of the French and English rural areas and compare those performances as I have done over each of the previous four years. I will also make some attempt as my current mental exhaustion returns to normal via intakes of French cuisine and viticulture and try and work out just what we need to do to improve our wireless broadband performance. I have no high hopes for that happening, but hope springs eternal. Copyright © Exetel Pty Ltd 2011 Sunday, August 28. 2011Only Four Sleeps To Go.......John Linton ....and August will have ended in a 'blink of an eye' and a big bird will be winging us to Europe. It's really good to have our delayed annual holiday so close but like most other people faced with that imminence all it really seems to do is remind you of how much you now have to pack in to the remaining four days. I didn't see much of Annette yesterday until quite late in the day as she made several shopping trips in between which she remained in her study trying to deal with the ever growing amount of business issues that only she can do. I remained chained to my key board for almost the entire day trying to finish the revisions to the September targets and the other trivia that takes up what passes for a life. September is, usually, a better month than August for communications companies with the no disruptions due to school holidays and many business customers getting their new financial year budgets approved. For residential business (which is also usually negatively affected by school holidays) it is also the 'dog days' before the various large suppliers begin their 'Christmas Specials' which are always introduced to prop up any miscalculations of planning for the first quarter and to try and alleviate the non buying effects that Australia's annual shut down from mid December to mid January always brings. So, September is usually a pretty nice month with sales increasing over the first two months of the financial year, assuming you've got everything right, and before the peak business sales months of October and November and the subsequent panic promotions of 'Christmas' by those companies whose targets for the first five months of the financial year are behind expectations. So, for most communication companies I have been associated with, September is pretty much a 'bell wether' month when, if sales don't lift from their July/August average levels you know you have some problems - if they do lift then all you know is that you will face increased competitive actions from those companies that are missing their planned targets for the then coming three months. Hence the freneticism in one part of Mosman at the moment. Deciding just what the current figures may mean in terms of adjusting the September targets across the product/service range is a demanding set of tasks. As we consider whether or not to accelerate, and by how much, our investments in our business/corporate sales, provisioning and support personnel the current sales performance levels are a vitally important indicator - at the lowest micro levels. In other words the actual performance of each of the sales people we have hired over the past 2+ years needs to be assessed in terms of actual success (or failure) in revenue generated and how it has improved over successive quarters. Easy enough to do in simple sales/month and revenue/month so far terms but far more difficult to do for the real meanings in terms of future performance across a range of key indices. So the next four days will be busier than usual - though sometimes I wonder how that can be possible. Copyright © Exetel Pty Ltd 2011 Saturday, August 27. 2011A Good WeekJohn Linton The week finished on a high with good contributions by some of our newer sales people allowing us to 'sail past' the corporate August quota with a full three days to go and some hope of setting a new record for monthly new corporate sales. Mobile sales will also pass the pretty tough targets set for them which for a company that has never made more than a few hundred net new sales in any month over the past seven years is really good to see.Surprisingly, residential ADSL sales will reach a post Telstra win back campaign high and our other smaller revenue contributing services are all above the August targets set for them. So with the week end plus three full 'working days' to go we will have a record August - following a record July - a good way to start the year particularly when you are planning to take the vast majority of September off. I had a pleasant end to the week being invited to lunch by the CEO of one of Exetel's major suppliers. As expected the major topic of conversation was how we could do more business together in these strange days of a possible new government residential telecommunications monopoly and how that might affect 'corporate' business assuming it lasts in its currently proposed form beyond the next election (whenever that might be). Neither of us thought the impact of the 'NBN2' would have any effect at all on corporate business even assuming the current Labor government gained some sort of legitimacy after the next federal election and stumbled on with its announced plans. The only issue that has to be seriously considered is what sort of time frame might exist in physically closing down Telstra capital city exchanges and/or removing the copper infrastructures on which business/corporate EOC services depend. Exetel has done quite well over the past two years in selling business customers 10/20/30/40 mbps services using multiple copper pairs and our sales of these services increases month on month. It will be three years this December that Exetel made the decision to build a business/corporate sales force and we hired the first four sales trainees in early March 2009. Since that time we have gradually built the business sales force to 24 people in North Sydney and a further 12 people in Colombo who between them sell over 100 medium/medium large business services a month and have now begun to sell small business services with the objective of achieving 1,000 sales per month by Q1 in 2012. We discussed how our supplier could help us speed up the growth in monthly sales of larger data connections - something they and Exetel are anxious to do over the coming year. We agreed that we would work together to sign off on a joint investment plan with the aim of increasing medium/medium large corporate data sales from the current levels to 500 sales per month by Q3 2012 and then to 1,000 a month by Q3 2013. Exetel is almost two and a half years into 'proofing' the 'blue print' of how this could be achieved but we lack the financial resources to make it happen in such a time frame. If a much larger supplier actually was prepared to make the financial investments required via a joint venture then the possible time frames could be made to happen. As with all ambitious plans there are many quite difficult scenarios to be dealt with. However, like all plans that are based on clearly defined, and realistic, opportunities and are also based on executable processes that can't be copied by current or future competitors it is only a matter of adequate funding and management skills to make them happen. Exetel, has demonstrated that it can sell these sorts of services better than any other company in the medium/medium large business marketplace out selling, in terms of orders placed per month, the much larger wholesale customers of two of three of our current major providers and being told we are growing faster in selling these services than all other customers of the third. Perhaps it is too ambitious to think that a company of Exetel's size could become a very large, perhaps the largest, supplier of communications services to Australian business but I really don't see any major difficulty in doing that (the current suppliers are so truly awful) if the financing costs can be put in place....and of course if we can continue to grow the required management capabilities Copyright © Exetel Pty Ltd 2011 Friday, August 26. 2011The Days Speed Past.......John Linton .....and it's almost the end of August. This will be a good month for Exetel in terms of revenues with practically all aspects of our business performing above (or in the relevant cases - below) the levels set in the business plan. Perhaps that only means that the various targets we have set are too modest and therefore too easy to achieve? Whatever the reasoning the company overall feels 'tighter' than it did towards the end of the last financial year. Being part of running any sort of business or other type of organisation is a very significant responsibility particularly when the decisions you make have effects on many other people within the operation and, in the event you supply services/products to end users, any decision you make has at least a 'ripple effect' on many tens of thousands of other people. The article I cited yesterday brought back memories other than those of aspects of long forgotten technologies. Together with those happy thoughts about my very early days of association with what was to become the IT industry were less happy thoughts about some of my and other people I worked with experiences with "managers" who I had the misfortune to encounter over those early years. I could best sum up my experiences of being "managed" in those first two decades of my business life by saying that I was unfortunate enough to only ever have one manager who I remember with any sort of enthusiasm. (given other people's experiences perhaps I was actually fortunate to have had one I have positive thoughts about). I was not particularly disadvantaged by those experiences, partly because I was a 'natural survivor' (ten years at boarding school from the age of seven teaches you to survive better than any other scenario I have subsequently encountered), and partly because when I became involved in 'selling things' my sales performances protected me from the sheer indifference and often casual 'brutality' of the "people" appointed to be my first and second line managers. When I worked for smaller companies than IBM in Australia at more senior levels (Sperry Univac and then Fujitsu) I realised that management lack of care/interest in employees reached to the very top of those companies with CEOs completely incompetent to carry out their responsibilities (this from detailed first hand observation and experience) and who would struggle to remember the names of more than a handful of people within their organisations. So what has all this self indulgent rambling got to do with anything? Probably very little other than I have begun to notice that Exetel has grown to a point where I would struggle to know how the people management within Exetel is being done. This has happened gradually over time and the slowly increasing number of people employed in Exetel's two main locations. This is entirely my own fault and although I could point to the unbelievable onerous nature of operating a small/medium business in the Australian communications industry over the past three years - that is no excuse for beginning to become like the people I have despised all my working life.......too busy looking after my own interests to properly carry out my 'managerial obligations'. I see too many instances of people not adhering to the few simple tenets of discharging a manager of people's duties. I don't like what I am currently seeing and need to address the issues when I have fully understood them. I am hoping that a few weeks in Europe doing very different things will help me revive my flagging spirits and allow me to address what I have clearly neglected for far too long. Copyright © Exetel Pty Ltd 2011 Thursday, August 25. 2011Back In The Day....John Linton .....things were so very different. I read this article earlier this morning: and while it certainly didn't bring 'tears to my eyes' it did instantly transport me back five decades to my early days in the nascent IT industry to when there were only a handful of 'computers' in Australia and I was one of the few people who could actually program one of those few - using machine absolute which required actually using binary code to set instructions directly in to the machine's registers via punching up paper tape via a hand punch from the coding sheets written in pencil (to allow for the frequent mistakes). Those were amazing days and probably easily the most enjoyable of my business and personal life - everything was 'brand new' and the computer world was totally free of the wankers and con men that were to invade the industry once it became 'commoditised' and required no real skills. If any industry ever has it's "golden period" then the mid 1960s was that period for the computer industry when the IBM 1400 series was about to be replaced by the 360 series and Cobol and RPG made it possible for computers to be programmed so much faster than absolute that it may may been a different world - which was in fact what it was becoming.....the IBM PC was only a few years away which was to change the concept of computing and business forever. As for communications services, it wasn't until Univac implemented ARTS for the Atlanta airport control towers in the mid 1960s that you could talk to a computer via a terminal (based on a typewriter not a VDU) in any sort of interactive way using a standard telephone line at 1200 baud (roughly equivalent to 1.2 kbps) and it wouldn't be until the late 1960s until you could use a VDU to 'talk' to your 360 computer. From the early 1970s transaction processing systems began to make major strides (in those days almost entirely based on the needs of air lines) and it really wan't until the the late 1970s that video terminals began to become common place in business environments. It would take the release of the first IBM PC in 1981 for computer screens on office desks to become commonplace and not until Bob Metcalfe founded 3COM in the mid 1970s that those individual PCs could talk to each other and larger computers and it wouldn't be until..... .......Oops - back to 2011 and the realities of a commodity market where IBM sold its PC operation to the Chinese many years ago and Annette dropped a brochure next to me offering 'unlimited mobile' from a company called Amayasim for $39.00 a month/no contract (courtesy of a customer's suggestion). Even that brief look back at a few of the things that have happened in IT/Communications over the past 50 years demonstrates the foolishness of basing any communications service on anything that is in production today. The average 'life' of any idea/concept/service in this industry is less than nine months and the 'life' of the infrastructure used to deliver any communications service has dropped from 100 years (copper telephony) through 15 years (fibre submarine cable) to something less than five years for the latest iteration of GSM speeds/functions to less than one year for the new 'must have' mobile handset and getting less as each year passes. It makes you realise just how difficult it is for any communications company to sustain any sort of growth or even ROI when so much thinking is needed just to work out what to do next month. Copyright © Exetel Pty Ltd 2011 Wednesday, August 24. 2011Wireless Data Services - Three Years LaterJohn Linton As a long term proponent of wireless mobile I keep reasonable records of the performance of our own HSPA service (via Optus Layer 2 - not the Optus Layer 3 version) and have done that for four years as of today - since I was given the first 'trial' dongle. For almost three years now I have also kept records for a Telstra mobile data service for simplistic comparison purposes - my ability to 'test' either service being restricted to where I live and work and a few over night excursions to NSW and Victorian country towns. For those who can be bothered to remember quite a lot has happened over four years and today's mobile broadband experience is quite different to those early days of indifferent signal strength and coverage. As someone old enough to remember what Telstra's and Optus' mobile telephone coverage was like in 1991 and how that has developed over the past two decades I have not been at all surprised at how mobile broadband coverage and abilities have developed over the past four years. I have been least surprised by the cost of using a mobile broadband service over that period - while the average speed on my Optus service has quadrupled the cost of the service has fallen by 80% - if you like - the cost/speed performance of a wireless data service has improved twenty fold in three years. The speed improvement on the Telstra wireless broadband service has improved more than five times (using a borrowed 4G sim from an acquaintance) but the fall in cost has not been as dramatic as that of the Optus service. I pointed out four years ago that the concept of an 'NBN2' (or as it was then in Krudd's lies to the electorate an 'NBN1') for regional areas of Australia was a pointless waste of tax payer money as the commercial mobile companies would be providing mobile data services to those areas at no cost to the tax payer and at a lower cost to the end user long before the government would make those services available. I also made the point that the planned development of GSM through LTE and beyond would continue to provide speeds that would exceed those of ADSL before December 2011 and would then proceed along the pre-defined path to speeds beyond those delivered via fibre and at a fraction of the cost to either the provider or the end user. So what do we see four years down the track from Krudd's lies? Less than 1,000 end users have an 'NBN2' fibre connection while far more than a million end users have a wireless broadband connection that rivals the speed of a typical ADSL speed connection at half the price of ADSL. Telstra has already begun live testing of LTE speeds in capital cities and Optus They are the facts. Four years ago the lying Krudd and then the stupid Steven (a 'parrot' of the most mundane) made all sorts of statements about the unsuitability of wireless for regional Australia and those lies and stupidities can now be seen, by even the naivest and technologically illiterate person as being as untrue and stupid as when I first commented on them in September 2007. Everything that was then published about GSM development over the past twenty years has been put in place exactly as it was planned - on time and at the predicted pricing. There seems to be no reason to doubt that everything now planned to come about over the next ten years for wireless broadband will happen in exactly the same planned time frames and predicted costs as the previous twenty years. Why would it be any different when every country on the planet is making it happen? Wireless broadband, as "predicted" over four years ago will continue to meet more and more current ADSL user's needs as each month passes. The fact it doesn't need a 'telephone line' to make it work also means the price advantage of wireless over ADSL will continue to widen. The soon to be released ABS figures will demonstrate the facts of this situation more clearly than I am able to do in a personal blog...so that will have to wait until September 18th. Copyright © Exetel Pty Ltd 2011
Tuesday, August 23. 2011Has 'Spring' Come Early?......John Linton ....it certainly seems to have, if the earlier than usual breeding activities of the local Mosman avia are any sort of guide....but in business?...is the long winter of the communications industry finally coming to an end? Over the past few days the extremely tough conditions that have prevailed in the various markets in which Exetel is involved have become much easier - almost benign in comparison. I don't know whether this is just some confluence of coincidences and aberrations or whether it is truly a sign that many of the protagonists who have been running such aggressive 'campaigns' have 'run out of steam' simultaneously. Whatever it is, there is a very real 'up turn' being experienced in terms of order intakes across the range of our activities. Perhaps the almost three year 'winter' that has engulfed the Australian communications industry is finally ending?....that is almost certainly wishful thinking though there is a very, very different 'feel' to so many aspects of our business at the moment. Business has been so hard for so long and so unrelentingly demanding as well as being so unresponsive to almost everything we have tried to make happen that it is now coming as a surprise that in almost every aspect of the business there are signs that most things are becoming easier....perhaps not easier but not so incredibly hard as they have been for so long that when things 'just happen' it comes as an overwhelmingly pleasant surprise.....because we are not doing anything different and, if anything, the general finacial state of Australia is getting bleaker by the day....so it isn't a result of better general marketplace scenarios. It also isn't Telstra abandoning its 'win back' campaigns as they seem to be continuing at the same intensity. What is noticeable from the daily residential ADSL churn away/churn to reports is the sudden absence of any company but Telstra Retail on the 'away' section and an increase in the range of other companies on the 'to' section. What is also noticeable on the daily business data sales is the much 'bigger contributions' from the newer sales personnel which is making the quite tough new year's targets look too easy to achieve. As well as those two major contributions, Optus mobile sales continue at a rate three times greater than the previous Vodafone based plans and while that is still very, very small in overall marketplace terms it makes an impact on Exetel's profit and cash flows. Certainly the general business 'news' is overwhelmingly depressing both in Australia and in the EU and US media I read on a daily basis. It seems that 'recession' is a distinct possibility in Europe and the USA which will certainly impact Australia assuming the Bluescope, Qantas, ANZ et alia retrenchments don't already clearly signal that. (two 'international software companies I know of in North Sydney are planning to close their Australian operations before Christmas is some sort of further indication that even the IT business is not experiencing happy times). It just makes it more puzzling that, if only briefly, the 'market conditions' we are experiencing are apparently moving against the general trends. The current 'good times' are very welcome and I am not complaining at this sudden easing of 'tension' in day to day business activities. It is just a scenario for which I can find no explanation nor can I see any 'tell tales' or other indications in the media or in the 'behaviour' of other companies - quite the reverse in fact. It will be interesting to see how the remainder of August plays out - unless everything suddenly goes in to reverse it will be a better than on target month. Copyright © Exetel Pty Ltd 2011 Monday, August 22. 2011New Markets Are Proving To Be Harder Than We ThoughtJohn Linton There is always something that seems to prevent me from reaching sensible decisions about some aspects of Exetel's endeavours and these 'road blocks' are occurring more frequently than I can remember in the past. Perhaps its simply that my memory is even more unreliable these days? Perhaps there are more complexities about Exetel's business and the market places in which we operate than there once were? For whatever reason it is becoming very annoying that I seldom reach a sensible conclusion having spent quite a considerable time thinking through a scenario or try to find the answer to some particular problem. It all used to be so much easier - define a problem - think it through over a few days and get a solution. For whatever reason that doesn't 'happen' lately. Clearly either the problems/opportunity developments have become much harder or our combined reasoning abilities have become more inadequate. While its almost certainly true that saturated or changing markets are more difficult to address it seems to be something more than that. The particular issue that we are finding difficult to resolve is providing a really 'attractive' offer of communication services to small businesses. Over the years we have had no trouble in 'attracting' small business customers who basically use our residential plans for business purposes and we have many thousands of such customers. We have had a steady growth in small businesses who use our 'B' (business) ADSL plans that include various business services such as domain name hosting, email, fax, SMS via email and /29s as well as ADSL and more lately mobiles but we have not found a 'killer' offering to address that particular market....which we believe is very important to our future plans. In contrast to our current difficulties with developing small business offerings our ongoing results of selling data and other services to medium/medium large companies continues to be very successful and the levels of success being achieved each month continue to grow - month on month. Why is it so? The most obvious difference is that medium/medium large businesses have, for years, been outrageously ripped off by suppliers to those markets and Exetel's business data services are often 50% less for a faster and equally reliable service (if the business is using a Telstra service they are often paying three times more than a faster service from Exetel would cost). Perhaps because the small business uses a residential service for ADSL there isn't the obvious financial benefit of paying a similar amount to get a service with more inclusions? That's as far as I have got in determining why we are not selling more small business services. Whatever the reasons are we need to find solutions to them in the not too distant future. Brave words and I don't have any ideas at all on how to do that. In the remainder of August we really need to come up with something radically different to what we are currently doing but I just can't 'spark' any new ideas. Suggestions would be very welcome. Copyright © Exetel Pty Ltd 2011 Sunday, August 21. 2011One Of The Tougher Decisions.....John Linton ....that companies like Exetel are now faced with is - is there any future in continuing to buy residential services from Telstra Wholesale? It's a strange scenario as the only reason the Exetel became involved in providing end user services was because Telstra created a wholesale operation that allowed start up companies (as Exetel was then) to enter the business. Nevertheless, seven or so years later the concept of buying wholesale services from an organisation that sells those service to retail end users at lower prices is not a tenable scenario. Unlike some others in this industry I am not 'whinging' about this situation but Exetel does have to make decisions based on current and likely future circumstances. 'Things' have changed a great deal since Exetel entered the market in January 2004. In those 'old days' Telstra was selling residential ADSL services at sky high prices and was providing almost non-existent end user services to an almost totally 'uneducated' end user market with no experience in using the internet. There was a clearly defined, and profitable, opportunity for start up ISPs (providing they had some sensible engineering and marketing skills) to become a Telstra Wholesale customer and provide an ADSL service at something like 50% of the prices that Telstra Retail was then charging and still make a reasonable profit. For Exetel, that lasted for around two years before Telstra started to react to their increasing loss of future customers by playing a less virulent version of their current "win back games". Fair enough - no-one can seriously complain that Telstra Retail was always making far too much money out of providing a simple service and end user across Australia were better off paying Telstra less for a simple service rather than the ridiculously high prices they were previously paying - in fact, a simple reminder that competition is good for end users. And so, this has been the case for some years now and shows no sign of changing in the immediate future. Is it good for Australian residential users? I would have thought it would be impossible to argue that it isn't. Is it good for companies like Exetel to try and offer well priced services in the face of a wholesale provider who sells those services to retail end users at lower costs than they sell to Exetel? Clearly not. So what does an Exetel type company do in such circumstances? Well.....toughie....but as Exetel only entered the residential ADSL market on the basis that it would provide services at the lowest cost but at a quality and reliability equivalent or better than any other provider in Australia - the answer is pretty obvious. If we can't provide a lower cost service than Telstra to residential end users then we have lost the only reason for being in that market and need to face reality and concede that there is no purpose in offering Telstra based residential ADSL services any longer. Telstra charges more for ADSL ports and back haul, by a huge margin, than Optus or AAPT does and is far more difficult to deal with - in every aspect of business. The business dealing difference could well be totally Exetel's fault but that doesn't seem to be the case in our dealings with ALL of our other suppliers so I am not certain that is the case. I am unequivocally certain that Telstra's wholesale prices are approaching double those of our other ADSL providers. When we started Exetel 100% of our revenue came from Telstra dependent services. Over the years that percentage has steadily fallen.....a significant reason being Telstra's 'win back' campaigns targeting our residential ADSL users.Today, Telstra supplied residential services account for around 30% of our revenue and contribute almost no profit. I doubt that our situation is any different to similar sized companies, if in fact there are any left of our size, and the decision to 'get out' of the Telstra supplied residential market is pretty cut and dried on a financial basis and we have been "umming and erring" about taking that decision for several months now. Probably the only reason that has prevented that decision being taken is, quite probably, a misplaced concern for our longer term customers who would be affected (I am assuming they have stayed with Exetel because they see some value in resisting Telstra's constantly repetitive 'win back' attempts). It's a very difficult decision but one that Telstra makes easier to approach every time I read the daily ADSL win/loss report. News like this also reminds everyone that a recession is never pleasant for businesses under assault: http://www.smh.com.au/business/jobs-under-pressure-20110820-1j3ls.html Copyright © Exetel Pty Ltd 2011 Saturday, August 20. 2011Level Of Whining Is Rising......John Linton .....indicating all is not well in communications land. It has been a good week in terms of sales across the whole product range and with 7 weeks of the new financial year now 'complete' our planned targets appear to be sensible so far. While it's far too early to draw any conclusions it seems that this year is a little easier than the equivalent period last year.........which made me quite puzzled when I read this yesterday: http://www.smh.com.au/technology/biz-tech/internode-blames-telstra-for-price-hike-20110818-1izb3.html It was a very strange piece of reporting, assuming it was accurate - almost Red Queen like in its self contradiction. As the Telstra spokesperson correctly pointed out - how can any decision by Telstra Retail cause Internode to RAISE their end user prices? A company of Internode's size and type only raises prices when it sees it's cash flow declining....or it wants to get out of a certain market(s). It has nothing to do with a supplier of services who, also pointed out, hadn't raised its costs to the wholesale customer as Internode tried to allege "in some areas". I can't possibly know what Internode's buy prices from Telstra Wholesale are but I do know that Exetel's buy prices have significantly fallen over the past year and not a single aspect of them has risen....I would seriously doubt that Internode has seen any other pricing scenario.....there would be absolutely no reason for that to be the case. My take on this latest 'dummy spit' is the same as the nonsense Internode made of their NBNCo pricing which cited excessive cvc charges as the reason their prices were so much higher than anyone else's were or were going to be. That particular sham was immediately exposed when the NBNCo cut the draft cvc prices (as everyone with two brain cells to rub together knew would happen - including Internode) but Internode made no change to their announced NBNCo pricing after the cvc pricing was reduced by 75%. Short term memory loss just doesn't cut it. Why is Internode raising prices? Because their operating costs are far too high and in a stagnant marketplace (for ADSL and telephone voice services) their 'model' is badly broken now and may well be totally wrong for the future. Whatever reason may actually be the case, blaming the actions of Telstra Retail (which as far as I can see haven't changed pricing for two plus years) for such actions is the sheerest nonsense - completely refuting any kind of logic or common sense. But that silliness was only one aspect of the 'chiller winds' blowing through the bloated personnel levels of many Australian communications companies at the moment. We continue to see our suppliers reduce personnel levels across many parts of their businesses. The results of these reductions doesn't affect us so far with the exception of one provider who cut too deeply in their corporate support operation resulting in telephone wait times of up to an hour in telephone wait times and a level of 'expertise' that was lower than a new residential support trainee. I have little doubt that similar levels of 'cuts' are occurring across the industry as the new recession looms ever closer and revenues attenuate. Adequate, let alone more than adequate, staffing at communications companies is going to be a real concern over the next twelve months. I think companies such as Internode are going to find those difficulties harder to address than most. Copyright © Exetel Pty Ltd 2011 Friday, August 19. 2011Web Sites - Why Are There So Few Good Ones?John Linton In this 'tidying up' phase of the financial year (when you are able to gauge how the year has started vis a vis what your plans said should be happening) it's always important to try and 'polish' the ways you are addressing the different markets by 'fine tuning' all of your major offerings. This doesn't really involve base pricing - which is always done as part of the planning processes but is more 'marketing oriented' in terms of what your various 'selling functions/web site pages should be doing in terms of making some sorts of better impacts. Exetel used to 100% depend on its web site to generate all of its residential and business orders and for the first four plus years of our 'life' we had no sales personnel at all. Things have changed over the past three years to a point where over 40% of our personnel are in either inbound or outbound sales - we have moved from being a company comprised almost exclusively of engineers to something else entirely. Many of our sales people have engineering degrees but many don't and that has provided us with some quite significant training and development challenges which, based on sales results to date, have been dealt with more than adequately to date. However one thing that has 'suffered' over this period of 'transition' has been our web site because it no longer receives the day by day attention that it did until a year or so ago. By allowing many different people to make changes to it, the cohesion it once had has been gradually lost and its simplicity has been compromised. While any web site is easy to criticise for all sorts of reasons by all sorts of people (over a complete range of 'expertise') the Exetel web site constantly achieved its only purpose which was to bring us enough business to grow month on month for over six years and to allow us to provide information in ways that reduced the incoming telephone calls for sales and support information. By putting in place an inbound sales force the effectiveness of the Exetel web site has been slowly reducing. While this was a conscious decision (to build an in house sales force) it was not a conscious decision to allow the effectiveness of our web site to erode. It's impossible, at least for me, to estimate how much business we may have lost over the past 18 months by not keeping our web site as tightly focused as we previously did, but I have little doubt it is considerable. So much so that I am having trouble looking at the various aspects and sections of the, now very large, web site content to decide how to return it to its former effectiveness. I have asked for advice from several recommended web site design houses over the last three months and met with three of them to look at their work and discuss our requirements. On each occasion I have not been at all impressed that any of the people I have spoken to have the slightest idea of how a 'selling web site' should be designed let alone presented beyond their concepts of 'prettiness'. So this a tough problem to resolve. Annette tells me that because I designed and have always maintained the web site, I will never be able to accept what other people recommend in terms of changing it - doubtless there is a lot of truth in that observation. However between now and the end of the calendar year we need to improve our web site's "selling power" across our quite wide product range and our equally quite wide customer demographic. So if you know of a really good 'selling web site' design house perhaps you could send me a url(s) of what they have done plus their contact details?If you do - please bear in mind that we prefer functionality to "professionalism" and results to "beauty". For me, I judge the web site's effectiveness on the number of new orders by product it delivers each day - against that criterion our current web site is far less effective than the version of 2 years ago. While I realise that many other things have contributed to those statistics the fact remains that for five years our web site was the only place that a prospective customer could sign up for any of our products - including corporate services and we grew very 'nicely' using our then much criticised web site. Copyright © Exetel Pty Ltd 2011 Thursday, August 18. 2011A Badly Organised Manager's Work Is Never DoneJohn Linton While I am childishly counting down the 'number of sleeps' until we leave on our over delayed annual break there seems to be more 'loose ends' than usual to tidy up over the remaining two weeks. Having made a list and checked it more than twice it seems I add more items than I cross off and right now it is significantly longer than it was at the start of August. It seems to me that things are changing in different ways, than in the past, across the Australian communications industry. Doubtless this is caused by the fact that the 'NBN2' is now over four years old and therefore it continues to creep towards some, even if it is ever so tiny, effect on the thinking and therefore the pre-preliminary actions of an increasing number of providers from the largest on down. The number of NBNCo orders that Exetel has received for trial connections has now ticked over 50% of the total people eligible. A slowly increasing number of those orders have now been provisioned and the first dozen or so have now been connected. A surprisingly large percentage of the trial orders are for 100mbps/40 mbps services and of those we have contacted/have contacted us the service is delivering around 95 mbps down and 32 mbps up with a 10 ms 'ping time'. As the NBNCo network would currently be as under utilised as it's ever going to be those results seem likely to be the maximum achievable in the near term. More subjective feedback is that, unsurprisingly, there is no noticeable speed differences in general internet usage. With so few people being able to connect to the NBNCo at the moment it would be foolish to extrapolate from the current experiences. What appears to be the case is that the take up of an NBNCo fibre service doesn't seem likely to reach the predicted take up percentage predicted by the federal government until the ADSL alternative is removed and by then it is more than less likely that wireless will have become a much more viable alternative than it is today. However it is noticeable in Telstra's more overt actions that they will make life as difficult as possible for NBNCo to make progress and just how that 'relationship' turns out is still impossible for anyone outside the senior management of Telstra and NBNCo to have any real ideas about. In the mean time companies of Exetel's size need to make very difficult decisions on where we 'place our bets'....which cause many of the loose ends we are currently trying to address. One of the more difficult 'decisions' we have been mulling over for far too long is where the best interests of our current customers lie in this currently slowly changing scenario that will begin to move more quickly from now onwards. The easy option is to do nothing at all until the future likely scenarios are clearer....and that is always the most tempting attitude to adopt. However the realities of the inevitable changes that have to occur in the immediate future, irrespective of whether or not there is a change of government at the next federal election, make doing nothing a poor (non) decision in these circumstances. Despite the bleatings to the contrary of the self appointed 'defenders of all things internet' the relaity is that the NBNCo is a political issue and there is no commercial reality applying to any of its actions (including pricing) at the moment or for some many years to come.This currently means that is lower cost to provide an NBNCo solution where the service is available than ANY alternate solution - assuming the customer is happy to use VoIP for their wire line phone calls....and why wouldn't any sensible customer do that? NBNCo was politically brought into being and one of its realities that it could only make even vague sense if it destroyed Telstra - at least as a wire line (fibre) provider of residential services. But because of the ignorance/sheer stupidity of the 'bringer abouters' that objective can almost never eventuate because, if they had bothered to actually understand how Telstra derived its revenues (and a huge amount of its real profits), none of it comes from residential services in regional areas and the revenues/profits from residential services in capital cities has been trending downwards at an increasing rate for as long as anyone cares to read the annual reports. By the time political stupidity gives way to commercial reality a very strange situation will have been brought about. The government will be committed to the provision of 'country' residential fibre services at a huge cost with no possible chance of ever making even a miniscule profit and Telstra (et alia) will continue to offer wireless services that make a very large profit in 'country areas' and will retain all of the current business fibre services in the capital and larger regional cities at the huge profits they currently earn. How that scenario, if it's true, plays out between right now some theoretical 'reckoning point' over the next five or so years will influence, and in many cases is influencing, almost all decisions made by companies of Exetel's size and the suppliers to Exetel in more and more significant ways. Copyright © Exetel Pty Ltd 2011 Wednesday, August 17. 2011Deja Vu Seems An Inescapable Part Of This IndustryJohn Linton The topic of copyright breach has swirled around the communications industry for so long I forget whether it was in the late 1990s or the early 2000s that it first became an issue. I know that it existed before we set up Exetel in early 2004 and that in those very early days we were very careful to do everything 'demanded of us' by the various 'agencies' then issuing copyright infringement notices with various levels of dire threats and doom laden consequences if we didn't break Australian law in complying with them. So having taken sensible legal advice we put in place the automated processes that allowed us to forward the copyright infringement advices and also the processes that required the end user to specifically deny the allegations so that Exetel was entirely within the law and entirely protected from the domm and gloom threats from the various 'authors' of the infringement notices. Then there was the fiasco of the law suit against iinet and the subsequent appeal and now a further High Court appeal. These pathetic misuses of the Australian legal system resulted in us reducing our 'severity' of actioning copyright breach notifications by removing the requirement to specifically deny the charge but kept the process of on forwarding the breach emails to the end customer for their own information. We took this revised 'stance' on legal advice using an SC who, clearly, was far more able than the one(s) used by AFACT in their law suit - how they could have lost that unloseable case remains a mystery to me. So a new round of dire threats from AFACT have begun aimed at "building co-operation" between the copyright holders and Australian ISPs. Personally, as someone who was taught the difference between right and wrong by my parents and grand parents at a very early age and then the concepts of morality and ethics by the teachers at the two schools I attended I am sympathetic to anyone who has their property stolen. But those same 'educators' also taught me to abhor bullying in all its forms - clearly that pillock who heads up AFACT had an entirely different education - assuming he had one at all. So while I see no difference between the Australians who casually steal copyright material and those louts in North London and other places in the UK who looted and burned "because they could" I can't, on behalf of Exetel, be bullied into breaking the established laws of this State and country. We did agree to show AFACT how to parse the material provided to them by Media Sentry into emails that are the same as Media Sentry (and other such agencies) send to us (and presumably tens of thousands of other ISPs around the world) that allow them to be automatically forwarded to the end users of the IPs specified. Why Media Sentry didn't do this themselves is unknown to us. In any event our senior sysadmin wasted an hour or so of his time and showed their designated 'technical person' what is required for an ethical ISP to automatically on forward their allegations of breach of copyright and, one day, perhaps they will get around to doing this. Should they do that then, like all other emails sent to 'abuse@exetel.com.au' we will, if they are in the required format send them to the Exetel customer whose IP is allegedly being used to steal other people's property. Unless the current laws change neither Exetel, nor any other ISP, is currently required to do anything else. Some people may argue that neither Exetel nor any other IP is even required to do this. I disagree. If someone is accusing me of breaking the law I would like to know about it and, I assume, so would the owners of IP addresses that may be being used by other members of their household illegally. If they don't, then they have the simple remedy of using their email client to block ever receiving more than one email from 'abuse@exetel.com.au - problem solved. So round and round we go, yet again, with the unethical continuing to steal, liars from ISPs saying its too expensive and too resource laden to on forward emails and copyright holders threatening perfectly reasonable companies, like Exetel, with bankruptcy via legal process for not breaking the law. Not everyone has the moral and ethical 'standards' of the senior personnel at iinet - and those looters and arsonists in the UK perhaps best summed up in the looter's credo - "I steal and burn other people's property because I can do so without consequences to myself". Copyright © Exetel Pty Ltd 2011 PS: You know things are not as good as the government avers when you read things like this: |
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