Tuesday, August 16. 2011Is It Really Possible For The 'NBN2' To "Work"?.....John Linton .....given our recent experiences it is by no means certain. The first Exetel ADSL customers have been connected to the 'NBN2'. The process of getting that to happen, allowing for "it's very early stages and "this is a test phase", has been dramatically bad. I don't know what has changed since the similar events of the 'NBN2' "trial" in Tasmania but every part of the process is much, much worse. Having been around setting up new networks in various forms for more than two minutes I am aware that it isn't the easiest set of tasks any company can undertake but then neither is it that difficult - particularly when you have an infinite financial budget and over three years to deliver the first simple services. Firstly, there are no B2B systems that allow customer orders to be processed seamlessly with automatic feedback of how those orders are progressing through the system (if in fact they are). There, currently, are many, many other difficulties with these processes which could be put down to "it's only a trial" and "the production system will solve all those issues". However three years is a very long time not to have developed these simple interfaces and back end processes that every other provider in Australia has managed to develop before they offered live services. The scheduled 'go live' date for the 'NBN2' in the test locations is October 1st and after many years of dealing with network providers and their systems I am pretty sure, based on our current experiences, that this particular provider is nowhere near ready to do that. Similarly, I have little doubt that the current simple problems will be fixed in a relatively short time frame but that isn't the issue. The issue is the people quality/experience/receptiveness demonstrated during this period has been so much less that would have been expected of even Telstra at its most lethargic - it under scores the overall problem of building a new government monopoly - where do you find the number and calibre of people required to make a new national network 'happen'. As NBNCo's recruiting continues and you begin to recognise the names of some of the people being recruited in the more prominent positions there are two trends that are very noticeable. These are, from the few people you know well enough to speak sensibly with, the remuneration being paid is way over the top at the middle levels at which I know people. The second is that the people are not exactly 'busy'. If I was unkind I would add a third - I haven't noticed any 'super stars' being recruited...these are all 'middle positions' and it bodes not too well for the real people - the engineers and provisioning people who will do all of the real work. Yes, I know - "it's very early days". However the extraordinary difficulties that have been encountered over these early days (and let me say these difficulties were not experienced in the Tasmanian "trial") indicate that there are some new issues with this phase of the 'roll out' which, let's face it, only involves a hand full of end user services. I don't know what tools and processes the field engineers have at their disposal but they appear inadequate and there are a worrying number of site visits that result in NFF but even while the FE is at the customer premises it must be obvious to him there is no data flow.....assuming he had the appropriate tools. Early days of course. I wonder if NBNCo's raft of head hunters knows that if you recruit mediocre middle management you never get any better than below average operational personnel reporting to them? I wonder if they care? A 'new' national network monopoly staffed by below average ex-Telstra personnel is not a happy thought. Copyright © Exetel Pty Ltd 2011 Monday, August 15. 2011It's, As Yet, Impossible To Address ADSL's Main 'Support' ProblemJohn Linton I looked at our support statistics over the weekend - something I haven't done for the whole of 2011 so far - as Steve is going to Sri Lanka this week to do the quarterly personnel reviews there instead of Annette who has been doing them since we set up the office in Colombo some three years ago. Over the time we have been operating in Colombo we have continually increased the times that telephone support is available and Steve will determine on this review whether we need to extend the support hours to 24 hours a day, 7 days a week. We currently provide telephone support every day of the year for 14 hours a day and have never been convinced that it is worthwhile, or practical, to extend those hours. In terms of call answer times and call resolution time these statistics have trended positively for over two years - something you would expect as the number of support personnel's average time with Exetel continue to grow longer. This is now reaching optimal lengths of service which, as anyone who has ben in the support business knows presents a new set of problems - particularly for professional engineers which all of Exetel's support staff are. My reason for looking at the statistics was to determine how far we had come in the getting on for eight years of Exetel's existence in terms of improving the technical support we provide to residential customers. The information and statistics we have kept over that time is quite interesting and most of the 'base' statistics are 'published' on the Exetel forum on the first day of each month in terms of number of calls answered, dropped and response and talk times.....something no other provider dares to publish.....for obvious reasons. We also publish on the main web site contact page the wait times in the various contact queues - again something that is rare for a communications provider to do....again for the obvious reasons..... (the only other company I know that does it demonstrates how unacceptably long their wait times are). One key aspect of the 'academic' exercise of developing a five year plan has to be based on providing better telephone support than any competitor. Such an 'ambition' is actually quite hard to define because it partially depends on events and people beyond any supplier's control. I don't know what Steve will find in his reviews this week but one of the issues will be, apart from whether we increase support hours to 24 x 7 x 366, will be determining what the 'life' of a residential telephone support engineer is in practical terms. Longevity in telephone support in this industry is an interesting issue. I don't think we have reached a definitive view on this issue and it's something we need to determine over the coming years....irrespective of how Exetel's business may or may not change. One of the reasons that the current NBNCo is so unsuitable as a residential service provider is its complete lack of line diagnostic tools - undoubtedly these will become available at some future time because they are essential in providing end user 'support' and sorting the ignorance, and just plain lies, from actuality. Optus has always had the best tools and its only lately, after ten years, that Telstra has begun to make line diagnosis available (at least to Exetel) - so the time frame for NBNCo is not a given at this stage. Based on the complete ineptitude shown by all NBNCo personnel in getting the first 50 trial customers connected (zero have yet been able to connect yet) it seems not only do ISPs not have the tools for line testing but neither do the NBNCo field and back office personnel....yes, yes; I know it's early days, but the current situation with the 'NBN2' would be comedic if it weren't so pathetic. However, in my opinion, the main question is just how far beyond the NTU do you have to provide support to provide a 'good' support service? Or, perhaps, how do you avoid getting customers who assert things like "your international site link is down" or "my speed suddenly dropped to unusable and I haven't changed anything" or. .....all the other stupidities of ignorant users? If that issue can't be 'solved' then no service will be regarded as good - let alone better than any provider's user base. The issue is that there is no quality control a provider can exercise over the majority source of problems with its service - the stupidity of a small percentage of its end users. Solving that problem remains in an unknown future but clearly it needs a completely different approach to the ones taken so far. I have a 'glimmering' of how that could possibly be done but it needs a lot more thought. Assuming that there is no sensible process to prevent ignorant users signing up for the service in the first place, then dealing with ignorant users needs to be more effectively put in place than it is today without requiring the 'good users' from having to pay for the ignorance and attitudes of 'bad users'. Copyright © Exetel Pty Ltd 2011 Sunday, August 14. 2011New Horizons - Can Lead To The Western Plains.....John Linton .........but only after you've crossed endless ridges only to be confronted by - yet another ridge. Exetel is certainly not confronted by the unknown difficulties of Blaxland, Wentworth and Lawson in 1813 though the past three tears have certainly presented a minor mirror image of constant disappointment in that our equivalent crossing successive 'ridges' has only revealed yet another 'ridge'. Some two and a half years ago we formed the view that the residential ADSL markets had ended their growth phase and were set to decline under the twin 'assaults' of mobile data services and the egotistical fool's 'NBN2' adventurism. For a company of Exetel's size the difficulties of dealing with the problems these 'sea changes' would bring about plus the saturation of the ADSL market itself we determined that we had to transform Exetel into a company quite different to the one that existed at the end of 2008. Since that time we have pursued a set of policies to bring that about while maintaining our abilities to acquire and better serve old and new residential ADSL customers. Looking back I am amazed at how naive we were, in thinking we could accomplish those objectives within our casually framed time lines but then I have always been an indifferent long term planner....my strengths, should I have any, have always been short term execution and immediate problem solving. Prior to embarking on the changes we had already set up an operation in Sri Lanka that, at that time had ten employees as we knew that for Exetel to become successful in some future markets we would need to achieve several inherent advantages that had to provide long term, and ongoing, benefits. Any MBA course or 'business text book' spells out the five key advantages any long term business success requires though each tends to switch the priorities around and blur the lines between those characteristics. If you ignore the only real requirement of long term success (monopolies in their different forms recently exemplified by Microsoft courtesy of IBM) you are left with your selection from book/MBA course of your choice definitions of the key requirements. My understanding of those requirements are: product difficult for others to copy, constant product improvement, lowest cost of sales, lowest operational cost, highest level of top quality personnel retention. My 'choice' of characteristics is simplistic but, at least in my opinion, I have not seen any significantly different 'options' over the time I have been looking at these sorts of issues. If you conjure up your short list of the most successful commercial enterprises since 1945 what would your list consist of? IBM, Sony, Honda, Toyota, Microsoft, Apple, Coca Cola, Chanel?....or whatever you would choose. If you make your own list and then think about it for a few minutes (look up their company history on the net) you may find some surprising similarities in what they did over the decades. As I referenced in a relatively recent rambling I have started to give some thought to Exetel's longer term future, assuming it has one - beyond residential ADSL or its fibre/mobile replacement. It has been a interesting exercise but quite daunting. However, I have stayed with the discipline of apply the five simple criteria I listed above and sketched out a 'super product' that could be created and provided against those criteria. It wasn't very difficult to make those sorts of decisions but, of course, it would be infinitely more difficult to actually bring about those aspirations - but no more difficult than the last two plus years of being a residential ADSL provider. So it's been an interesting 'academic' exercise and, with some much more careful thought, it could be approached as a base template for future planning if we could ever find someone good enough to do that. In the mean time we will continue with our far more prosaic changes to Exetel along the lines we have been pursuing for the past two plus years with their much more modest aspirations - those changes are quite difficult enough for the present time. Copyright © Exetel Pty Ltd 2011 Saturday, August 13. 2011A Week That Causes Some Concerns.........John Linton ......about Australia's long term communications future. It was an OK week at Exetel in terms of sales with most targets being met and the first 12 days of August running slightly above target. Another of our long term supplier account managers 'said goodbye' to us after five years of association and was unable to tell us who would be replacing him. As I have mentioned before, it seems that most of our suppliers are reducing their staff and if you had bothered to read the Optus/Singtel Q1 presentation: http://www.asx.com.au/asxpdf/20110811/pdf/420b7pwrdlc5r3.pdf you may have noticed (on slide 20) that it is casually mentioned that personnel costs have reduced by 11%. It doesn't mention any time frame over which this has happened but as the rest of the report is a quarterly analysis you might be inclined to think this personnel reduction has happened over the three months ending June 30th. If that's the case it is one of the more 'savage' personnel cost reductions I have seen since the bad old days. I would have thought such a significant policy would deserve some more detailed explanation. It would seem from the Telstra annual report and the Optus Q1 report that the two major Australian communications companies continue to find markets tougher than expected and both signal no change to that in the coming year....nothing new there. In both these companies cases they operate on a decade or more planning time frame and blips such as are currently being experienced are no more than that - minor inconveniences that are already simply a 'memory'. Telstra has solved their problem of a transition from a copper network to a fibre network by simply getting the federal government (via NBNCo) to pay them for it without obliging them to make the huge investment in a replacement network - well done them. Both Telstra and Optus make it very clear that the future of their businesses (and all of their investments) are in mobile technologies with their only interests in 'land lines' of any sort being in large cities for business users. How interested either Telstra or Optus will be in re-selling NBNCo fibre residential services is not going to be determined for many years but it's difficult to see why they would have any interest at all - it simply has no strategic value at all and almost no medium term value. Which raises the issue that if Optus and Telstra don't re-sell the new monopoly's fibre service what will really happen over the coming years? As that's years into the future (the planning time frame for owners of high technology companies like communications infrastructures) no politician or their advisers seems to have considered such a scenario - it is far beyond the time of the next election. So, it's conceivable, that there may be three choices of future communications providers - a government monopoly and two LTE+ mobile companies.....fighting for a share of a market that previously only supported one infrastructure provider (Telstra). Pie in the sky fantasy? Just ask yourself this question - "if you were chief of long term planning at Telstra or Optus would you have a service strategy based on re-selling services dependent on a government monopoly in your future options?" Or you could consider this: Copyright © Exetel Pty Ltd 2011 Friday, August 12. 2011"Market Share" - An Expensive Pre-OccupationJohn Linton I had a more detailed look at the Telstra annual resuts last night and they were pretty depressing - but the share price rose and the CEO said what a wonderful year it had been for "attracting new customers". If last year was a "good" year for attracting customers (he reported that revenue had grown a miniscule 0.7% over the twelve month period) I wonder what he would consider to be a "bad" year for customer growth? As that "good year for customer growth" was achieved at a net decrease in profit of $700 million one can only wonder what it will cost to achieve any planned "customer growth" over the coming year?...he is suggesting that growth in the coming year will be in "low single digits". Exetel had a poor year in FY2011 but we didn't make less profit than the year before and our revenue grew by around 12% - we considered that a very poor result but given the overall toughness of the year (mainly caused by Telstra's actions) we were happy enough with both the revenue and profit results.....we had no real expectations of growth when we did the initial planning for 2011 and if anything we were pleasantly 'surprised' by the end result. Of course there are other views: The results for other telecommunications companies will become available over the next ten days and they will be interesting to compare with Telstra's. Optus also announced their year end results yesterday and followed Telstra's lead and simply made statements that the facts contradict and then talked mainly about how mobile business continues to grow at rates that defy logic (and the population of Australia). Neither company gave figures as to how Vodafone's problems contributed to their mobile growth. The ABS statistics are still three or so weeks away which should be quite interesting to see how wireless broadband has grown compared to ADSL over the past six months. The only larger company that won't announce results before the end of the month will be TPG that has a different reporting date because of its reverse takeover of Soul. The ADSL market will not have grown at all over the past six months in terms of number of users and it will have shrunk quite noticeably in terms of revenue. It will be an interesting two weeks trying to geta better understanding of what is REALLY happening in the Australian communications industry. Market share? More important, in the event that it's ever important at all, in a new, growing market than it ever is in a falling/saturated market. However it seems to be more important than ever for many Australian communications providers - based on their own statements. As Telstra's revenue and profit figures so indelibly demonstrate attempting to grow market share in a falling or stagnant market is only possible by sacrificing both profit and revenue - and you have to be pretty sure that is what you want to do and that by doing so there is some collateral benefit. The kindergarten understanding that larger market share equals economy of scale resulting in larger profits because of lower unit costs does not apply to saturated markets that are beginning to fall.....the reverse begins to apply (because the infrastructures that have been built to service 'n' customers becomes an INCREASING cost when 'n' becomes 'n-x' and x is a month on month increasing number). If the only way of maintaining 'n' customers is to reduce 'y' (ARPU) then it turns out to be a very nasty 'financial bear pit' - as again, the Telstra profit and revenue figures for 2011 so clearly demonstrate. Maintaining "market share" in a stagnant/falling market is ALWAYS accompanied by lower end user pricing which is achieved by cutting infrastructure and operating costs. It's hard to 'give back' infrastructure that has been paid for (and thus remains on the depreciation list in the 'books') but it is possible to reduce those parts of the infrastructure that are 'rented' - but that is also not possible without increasing 'unit costs' in most instances. Similarly it is possible to reduce personnel involved in providing the support/sales/etc involved in those services but that is equally expensive and seldom results in what the "HR/Top Management" expect to achieve (because they rarely have the slightest clue as to who of those people are actually the best to keep and who could be 'let go' with the least impact). So falling/stagnant market places are very dangerous for those participants who are obsessed by market share......which will make this particular reporting 'season' more interesting than most. Copyright © Exetel Pty Ltd 2011 Thursday, August 11. 2011It's Good News Week.......John Linton .....someone's found a way to give the rotting dead the will to live - no-one will ever die. ( from a song popular before the majority of current Australians were born). I'm not sure what to make of the financial news lately. I have no knowledge or skills in terms of understanding international finance other than 'digesting' what those who purportedly have those skills write in the international financial media - I long ago discounted what is written in the Australian financial media - it is demonstrably written by people with no knowledge at all. So couple the financial news with the 'youth arson and looting' in the UK and what do you think is really happening in our current version of globalism? It seems obvious to me. There are too many people and too little taxes to fund a large proportion of those people's social welfare lifestyles for the past 60 years so governments have borrowed money to pay people to do nothing and now cannot borrow any more - there's no-one left to lend to them....or something very close to that. In Australia we have largely been protected from ultra socialism and its pernicious consequences because we moved from being a sheep and wheat grower/exporter to a mining exporter using the incredibly vast natural resources of a country that had very few people. Of course most of that wealth was in the hands of overseas landholders and then overseas mining companies but there was enough left to employ those Australians who wanted to work with handsome incomes and rendered even the most incompetent prime ministers (and boy is that a tough contest as to which of them was the most incompetent) and their coteries of venal thieves (Australian cabinets since federation) incapable of stealing so much that anyone had to worry. So, in this "lucky country" we will continue to be OK for as long as China needs to buy coal and iron and there are enough European and US buyers of their exports to allow them to pay for it - probably not a long or even a medium term safe bet. So how is all this nonsensical speculation affecting Australia. According to Ms Faustus - not at all. Well, that's good news so no need to worry about anything here then.....unless you happen to be one of these 22,000 people: http://www.smh.com.au/business/jobless-rate-jumps-in-july-20110811-1inr9.html Apart from that statistical 'blip', I do have a few 'niggling doubts' about her statement though because it appears that some inconsequential people who run the larger commercial enterprises in Australia don't seem to be expressing the same views - in fact a growing number of them seem to be expressing contrary views....but I suppose....what would they know compared to the illegitimate current prime minister with her wealth of financial and commercial experience as evidenced by her career to date? And while I understand she filters her own pig ignorance through Treasury her political statements are of her directions to her speech writers. (by the way did you notice she now makes a serious attempt not to pronounce government as "gubmant"? It's painful but someone must have told her to do something about the way she pronounced that and other words). What a fake she is. You may be able to take the girl out of 'Footascrye' but you can't take 'Footascrye' out of the girl. (apologies for the original "country/boy poaching but I can't be bothered to look it up) I see two things currently that indicate that times are tougher (assuming you are not driving a front end loader in the Pilbara) than Ms Faustus is saying. I see all of our suppliers reducing personnel on an ongoing basis - both by "natural attrition" and by direct action. In at least one case that has made dealing with those companies more difficult and in terms of support at least one of our suppliers has now dropped to a level where we seriously have to decide whether we continue to do business with them. That may be one supplier's particular circumstances but I see enough indications from other supplier's that it is more than a 'one off'. The other thing is the ongoing increase (small though it currently is) of payment defaults both from residential and business customers. Nothing that is in any way alarming but it is growing month on month. So I get the very clear impression that people are finding it harder to pay their debts and, in business areas, harder to retain their employees. Does that equate to Ms Faustus statements being correct? It certainly doesn't to me. I have little enough knowledge and absolutely zero expertise in financial matters as I stated at the beginning but it all seems to indicate unpleasant financial times in Australia are more likely to occur than not over the coming months. If the Europeans and Americans reduce/stop buying from China my impression is that Ms Faustus, unlike Exetel, doesn't have a plan B. Copyright © Exetel Pty Ltd 2011 PS: First of the annual results: http://www.smh.com.au/business/telstra-profit-falls-beats-expectations-20110811-1iniu.html Wednesday, August 10. 2011It's Quiet.....John Linton .....too damned quiet. It's Wednesday and I've accomplished practically nothing this week so far (actually "practically nothing" is a euphemism for absolutely nothing). Accomplishing nothing is an inevitability when you start the week without a sensible schedule of what you need to do and a rough idea of how you will go about doing it. There are no excuses for such inactivity and I will undoubtedly pay for my sloth in the near future with a deluge of overdue actions. Perhaps it's simply the ongoing depredations of old age or simply the need for a break that is now well overdue. I think it is more likely to be simply the ravages of time. We will begin connecting the first NBNCo 'trial customers "on the main land" today. In terms of a 'trial' nothing much from our 'side' will be affected and the 'trial' is basically for NBNCo to determine just how their internal systems and processes work. You may have noticed this: or some similar article. Despite the headline there was no "industry pressure" just an error, on behalf of NBNCo, on how to price the service for green fields locations (currently all of them) where it is simply impossible for a wholesale customer to ever make a profit based on the pricing model initially suggested. It was always going to be changed, a five year old could have pointed out the obvious arithmetic error, so no harm done. Exetel proceeded with the trials and whatever then comes about on the basis that the current 'correction' would be done before we received our first bill....and, of course, that's what happened. When I said I had done absolutely nothing so far this week that wasn't strictly true. For some time we have been trying to determine just what these early days of NBNCo 'connections' will mean to Exetel in our very unimportant way in terms of the overall market but the intensely important ways to our particular company. This has included whether or not we continue to use APPT supplied residential ADSL services in the immediate future and whether we continue to use Telstra Wholesale residential services beyond the short term. We have no problem with continuing to use Optus ADSL services (unless something major changes) as they are currently the lowest priced of the three alternatives and, while restricted in coverage, allow us to 'honour' our reasons for being in business. So we did review exactly where we currently stand in terms of ending our ADSL relationship with AAPT and did decide not to do that, at least at this time. The NBNCo alternative to Telstra's current pricing (at least its pricing to Exetel) is probably going to turn out to be a plus for us as a provider of residential services. However the 'roll out', at least as I understand it, is so slow that it will be a very long time before it makes any real impact on TW provided residential services.....but long before it is widely available it will make some very serious problems for our ability to provide residential services via Telstra Wholesale. Those problems could be as early as November of this year. The reason is that Telstra, alone among our suppliers, insists on prices being tied to volumes of business. This means that even a slight reduction in customers (inevitable under the NBNCo scenario) render the whole customer base non-viable if the total number drops below a certain threshold. This sort of pricing, widely practiced in a growing market, presented no problems. However in a falling market (transitions from copper to fibre) it makes no sense at all. Whatever today's volumes of ADSL business are thy will continue to get less as fibre becomes an option to an increasing number of people.....in other words NBNCo was forced to recognise the illogic of its cvc pricing model but Telstra has refused to change its now unworkable pricing model.....for whatever reasons. NBNCo was forced to recognise the basic error of their cvc pricing model - hence the recent change before a bill was issued in anger. It is yet to be seen whether someone within Telstra Wholesale will see the idiocy of using a pricing model that simply doesn't work in a falling market. Then again perhaps it is their "final solution" to pricing all competitors to Telstra Retail out of the residential ADSL market as the coup de grace to their "win back campaigns"? Maybe we will come up with a better solution today. Copyright © Exetel Pty Ltd 2011 PS: I thought this was an interesting initiative: http://content.usatoday.com/communities/technologylive/post/2011/08/comcast-rolls-out-internet-access-for-low-income-families/1?csp=obnetwork
Tuesday, August 9. 2011While The 'R' Word Is Now Freely Used....John Linton .......I haven't seen any hint of the 'D' word in the world's financial press....mind you, there could well be a very scary reason for that. I received another "just to let you know I'm leaving 'supplier x'" yesterday which is some sort of sign. I think it mainly means that carriers/providers are finding life tougher than in the past and, in the case of some of them, they are "down sizing" their wholesale sales people....US companies are usually the first to adopt this practice and therefore it is a usually bell whether indicator early sign that they at least do not see a rosy future in the coming period. With the DOW falling over 600 points overnight and the Australian market almost certainly following suit today there is no relief from bad news anywhere you look. Another early sign: http://www.smh.com.au/business/job-market-shows-signs-of-softness-20110808-1iidr.html which just confirms why I am receiving an increasing number of unsolicited resumes for a wide range of positions - including at least one or more from many of our supplier personnel....it doesn't seem to be a good time to be in sales in this industry at the moment....or perhaps in any industry: So despite the rote nonsense from Whine and Ms Faustus (I couldn't believe that dumb woman's cynical speech writers bowdlerised the Gandhi quote on the front of our web site in such a shitty way yesterday) assuring the stupid that "everything's fine" - it isn't - and in NSW it has been far from fine for almost two years and steadily getting worse. Perhaps the current apology for a government will notice one day? Not that it matters there is now no tax payer money left to do anything about it courtesy of the moon faced fool's spending last time. When we were doing the planning for FY2012 we took in to consideration that the economy was going into recession (living in NSW with an IQ above your the number of days in the month didn't require much to reach that obvious conclusion) and thought it would be a net plus for Exetel rather than a negative so we didn't let it affect the numbers we came up with). It is not sensible to take our results over the first 5 weeks (and the least definitive weeks of any financial year) of the new financial year as any guide to the year's future but it is better, as in our case, to have started the year 'on target' than the reverse. Things change very quickly in market places generally (not just financial market places) for anything other than a 'so far so good' attitude to be taken to YTD results so early in any planning period. All the signs are that Australia will not have as good a year as last year and that the predicted tax revenues in the current government's budget for this year and the estimates for the following years will turn out to be yet another Labor financial irresponsibility myth. No problem - it is a familiar pattern. The stock market gyrations are largely irrelevant to 'the public' with the only real effect on making it harder for those companies negatively effected (currently all of them) to borrow money for expansion and where they can borrow making it more expensive to do so. In terms of how this may affect residential communications users in Australia is not possible for me to say. If I was to say anything I would suggest that Australian users will see even longer telephone support wait times (60 or so minutes will become even more common) and email reply times that will often be no replies at all (based on hiring freezes for support centre personnel or, perhaps, more drastic measures). I wouldn't expect to see prices fall except for sporadic 'promotions' by the two major carriers and their wholesalers from time to time. While the likes of iinet and TPG are predicted to report good profits for FY2011 those profits will be based on more than the usual 'fine tuning' and it seems very unlikely that they will reduce prices over the coming year. So in consumer land it will not be as 'good' a year as last year as far as I can see. So, for Exetel it is still a one day at a time management process though, and I probably shouldn't keep saying this, it doesn't appear to be as hard as this time last year.
Copyright © Exetel Pty Ltd 2011 Monday, August 8. 2011FY2011 Still Hasn't Ended.......John Linton ....for many of Exetel's suppliers and its becoming more of a nuisance than I can remember it being in past years.. Another week starts, at least for those people in conventional five working day week jobs, and the new financial year is well under way though many commercial operations that Exetel deals with are still trying to sort out what happened in the previous year. Even the new Nvidia chips being deployed by investment banks in the US: http://blogs.wsj.com/digits/2011/08/04/j-p-morgan-shows-benefits-from-chip-change/?mod=WSJBlog&mod= wouldn't help them get their results out faster because it isn't the facts they want presented but the best possible spin on the actual facts which requires a fiction that computers can't produce without human 'intervention'. I tried to map out what I should attempt to accomplish over the coming five days, as I invariably have done for the past seven plus years, but failed to come up with a sensible 'plan of action' that would usefully use the new "working week" for the first time in as long as I can remember. This is, of course, entirely my fault but the underlying reasons are, perhaps, more disturbing - which are something I must try and resolve. For whatever reasons people within and outside Exetel seem to have no urgency in making available information that is needed to make an increasing number of decisions. I suppose most people, possibly everyone, gets 'slow patches' in their working lives but I can't remember that ever happening to me, or Exetel to date - not because I am such a fearsomely good 'planner' of my work day responsibilities but because I am quite the reverse - always assuming I can do much more that it turns out I am able to accomplish in any time frame and therefore never having any 'spare time'. All my life I have consistently over estimated my capabilities and capacities with the obvious result that I never complete any task on time and therefore always have a backlog. So now I find myself waiting for tasks to be completed by other people before I can proceed to the 'next step' of my part of any given program/initiative and far too many of these activities involve one or more of our suppliers who, at this time of year particularly, move at glacial speeds. Add the delays caused by Exetel employees participating in these tasks for the first time and you have a scenario where nothing gets done at all - at least by me. So, for the first time in as long as I can remember, I don't have a fully planned week which means I am going to waste a lot of time which I don't know how to sensibly use - and at his stage of my life seriously annoys me. I don't know why Exetel has begun to join the ranks of the excuse makers having for so long been a company that has only run on two time frames - difficult tasks are completed 'before lunch' and really difficult tasks are completed by 'COB' on the day in question. Maybe it's a sign that I need a more demanding job to give me more to do because the long delays in getting things, even the simplest things, done in either of those time frames lately is seriously making me wonder whether there is any point in getting out of bed in the mornings. Maybe I need to go back to bed and get out the other side - the side I got out of was clearly the wrong side. Copyright © Exetel Pty Ltd 2011 Sunday, August 7. 2011What Would Henry Temple Or Robert Stewart......John Linton .....who once ran the British Foreign Office with a total of 18 people make of the 'public service' in today's Australia? It seems that 'government' is becoming ever more intrusive in commercial life in the telecommunications industry - or maybe Exetel has grown to the size that attracts the drones that work (and I use that word loosely) within the ever increasing number of 'regulatory' agencies. Since we 'created' Exetel we have had an almost 'contactless run' with these dimwits bt I have noticed that over the past year or so we have had an increasing number of contacts nit-picking our web site text and the occasional 'spam' complaint. Then of course there is the ongoing sheer nonsense of the TIO employees with their zero understanding of the industry generally which remain unalleviable courtesy of a lack of intellectual reasoning capabilities equivalent to rotting meat. In both of the countries in which we operate we adopt the only attitude allowable - complete conformity with the laws of the State and countries in which we operate. No company of Exetel's size can sensibly do anything else. However, while the laws of this country may be quite sensible when they are drafted and promulgated (though that isn't always the case) they are, it seems to me, more often than not 'carried out' by quite extraordinarily stupid and incredibly lazy "public servants' (though that phrase has become an oxymoron almost everywhere it is applied). For a brief summary of how many Commonwealth public servants there are: http://en.wikipedia.org/wiki/Australian_Public_Service So - well over 150,000 of these drones drain Australia of more and more money each year. Bad enough but then you have each State's "public servants": and I cant be bothered to find the number for the other States but it seems likely that would add up to a total of around 100,000 State "public servants" to which you would have to add the number of local government employees. Probably a total of unproductive, meddlesome drones of between 400 - 500,000. So not only do the tax payers, rate payers and Australian citizens generally pay for these people to do no work (sort of a gigantic CentreLink work for the dole scheme - except at infinitely higher pay levels) they are actually paid to disrupt the work done by people who are forced to pay for these parasites to exist. We pay for this to happen at a rate of approximately one "public servant" per 20 working Australians - I can't quickly find the actual number. It would be interesting to find out what has gone so wrong with the concept of "public service" from the days when only the best of the intellectual best were 'privileged' to be selected to serve their country to today's dross with their incompetence, dullness of mind and overwhelming self aggrandising interest. As Josephe de Maistre so cogently put it one and a half centuries ago - "Toute nation a la gouvernement quelle merite" I wonder what we have all done so wrong we ended up in this giant mess to be so endlessly punished? Copyright © Exetel Pty Ltd 2011
Saturday, August 6. 2011A Glorious Saturday In Sydney.........John Linton .....almost spectacular enough to promote an unseasonal feeling of joy and good will to all men (and presumably women in these pathetically PC days).......but not quite. It was a good first week of the month - not 'spectacular' but quite 'solid' as first weeks of the month go with the two days of the weekend to add another 15% to all but the corporate results for the first full week of the month. The stock market turmoil, and the plunging dollar, of Friday our time was slightly alleviated by Wall Street not continuing its dramatic Thursday fall but clawing back a few points of gains based on the need for stock brokers to make money on falling markets which require them to buy back to restore the short positions they made money out of the previous day. How all that turns out is, literally, anyone's guess. Running a business of Exetel's size is becoming ever more difficult as it slowly grows, in terms of employees, while also growing ever more complex in terms of products and services supplied. I remember the past well enough to know that this is one of those critical times in most companies development - no longer small enough for the dedication and urgency that had to be in place to grow from being a 'start up' to have survived the years of gradual growth which, despite all the effort put into recruiting and training to have survived. As I recall from previous times this becomes and remains a problem for some 12 - 18 months when employee self interest either kills the company or the 'next generation' of people dedicated to 'perfection' rather than their own self interests kicks in and the company proceeds to the next level. I am not complaining about this 'fact' in any way. I understand its inevitability as well as most rational and reasonable people and have had the opportunities of observing it first hand as well as associating with people who have also observed it at first hand. I have even sat through 'lectures' on how to best deal with it. It's an unpleasant time in any start up company's progress towards being a non start up company but it is a very common situation for those few companies that survive long enough to encounter it. From my own experience and from the experiences of others I have talked to or read about there is no simple way of dealing with it. The most common experiences are that market growth took care of the inevitable failing of enthusiasm and dedication because there simply is no easy transition from the original start up closeness of commitment to people with an attitude of 'just a job' for the time being on the way to 'some other better paid job'. We did three things to alleviate this 'inevitable' Sargasso Sea part of the passage to a newer and brighter corporate 'world', and while being no Himilco, I think these will be enough to get us through this next very difficult period in any company's development. To anyone vaguely familiar with the births and deaths of corporate entities what we have done is obvious. We 'split the company in two by establishing a 'new' Exetel in Colombo where a new group of people have the opportunity of 'refreshing' the company via their own 'excitement' of doing brand new things for the first time. We changed the focus of the 'old' people in the company from residential to business and corporate products and services. By doing the first two things we created many new management positions to 'challenge' all of our employees to develop their personal careers more quickly and push them far beyond the 'comfort' they had found in their previous years of doing similar things each day and will allow us to avoid the 'fat, dumb and happy' scenarios so prevalent in the companies with which we compete. Of course - I may be completely wrong. Copyright © Exetel Pty Ltd 2011
Friday, August 5. 2011Just When You Think 'It's Safe To Go Back In The Water'.....John Linton .......the stock market crashes as more people realise the US and EUC economies are, to use a technical term, totally stuffed and every major country has borrowed too much to repay in any estimated time frame. This is obviously news to our RBA which as recently as Tuesday was contemplating raising interest rates and, of course, that mindless union apparatchik Whine Swan was making his moronic pronouncements of "Australia is in great shape" (it isn't - you f***ing idiot) even though you base your stupidities on living in the tax payer money pit of Canberra they show a complete lack of comprehension about the actual state of the Australian economy. Doubtless it will "bounce back" in coming days but it looks pretty certain tht after every future "bounce back" it will then fall again as the underlying issues are irreversibly negative. I couldn't find a single positive statement in any of the overseas papers I read this morning as it has finally dawned on the collective media that the US is bankrupt and so are half the countries in the EU. What this actually means seems to be unknown to anyone whom I respect as having sensible understandings of financial issues but no-one seems to express any positive views. I guess it's only time before the "D" word re-appears in the financial press. It appears that times are already bad in NSW and are about to get a whole lot worse....something I, and most people I talk to, have 'noticed' for longer than a year. What this means, if anything, to a company of Exetel's size in the Australian communications industry is way beyond my ability to understand. I can dimly understand that it will mean an increasing number of business and residential defaults on payments to Exetel for services as businesses go broke and people lose their jobs. I can understand that bad times lower everyone's ability and/or desire to spend their money which in turn accelerates business bankruptcy and job losses generally making markets shrink overall. I have no idea what the extent of today's news means to Australia generally other than if $A100 billion is "wiped off the share market" then everyone who has shares is suddenly a lot poorer and as most of us have superannuation invested in the share market we will all feel poorer and many people will actually be poorer. So 'bad news on the electronic door step' but, nevertheless, we do actually have to 'take one more step'. The main thing to get done today is to review the HSPA plans and to see how we can improve their value - which I had thought was pretty good anyway but apparently I haven't noticed what is happening in the wireless broadband market places.....which is strange because I have always had a keen interest in them - both here and in the US and EU - and read relatively extensively on the subject. In any event we are making absolutely no progress in growing our wireless broadband business and we need to do something about that. Exactly what we can do, particularly in light of the first two paragraphs of this piece of writing is going to be very 'challenging'. Personally I think the market's requirements for "free" everything has reached the stage in this industry that government borrowing has reached in the global financial worlds - been going on way too long for any realistic offering to be made by companies like Exetel. This recent article demonstrates what a realistic price is for MBB: http://www.betanews.com/article/Verizon-confirms-end-of-unlimited-data-plans/1309889424 These 'new' prices are much higher than Exetel currently charge (and even more than Vodafone charge) and demonstrate how under priced MBB services are in Australia. Yet the pressure is to reduce our very low prices even further which we simply cannot do - we already barely break even on providing wireless broadband services. Perhaps we should get out of the HSPA residential market completely? Vodafone's recent attempts at 'unlimited' MBB clearly demonstrated the foolishness of that stupidity and I am amazed that a company that has more mobile customers than anyone else wouldn't have warehouses full of statistics to tell them how foolish that would be - to the point of destroying their company in Australia. So, not the best start to a day - I am sure things will seem brighter soon - but I guess that's what the US Treasury Department has been saying for the past three decades. Copyright © Exetel Pty Ltd 2011 Thursday, August 4. 2011Perhaps It's The Thought Of An Imminent Holiday?John Linton I was trying to establish a basis for determining how to properly compare what is going on in the marketplaces in which we operate today with those of one year ago and two years ago - beyond the bleeding obvious of order intakes divided by payroll expenses. Even removing the distortions of increased base revenue and changed product line ups I didn't get anything meaningful with the simplistic approaches I was taking. I don't want to kid myself out of sheer exhaustion that the first few weeks of this new financial year are 'easier' than any of the weeks for the past two plus years but that is the way it is looking to me. Perhaps I am just too tired to register the burdens? For whatever reason things do look brighter than they have done for as long as I can remember and, real or not, that can only be a good thing. I briefly discussed the progress we have made in processing the NBN applications we have received so far (now closing on 40% of those eligible) with our operations manager yesterday and got the predictable update. Removing the comments on the capabilities of the NBNCo people concerned and the completely broken nature of the cobbled together "B2B" software leaves nothing positive. Exetel, a very small company in terms of the overall communications markets in Australia is very used to the quirkiness and vagaries of the different suppliers B2B software - we have, after all, had to write interfaces to over a dozen different B2B interfaces over the years - all very different - all with functional problems and just plain 'doesn't works'. As I said to Paul - "why expect NBNCo to be any different?" However it does serve to illustrate how completely unprepared NBNCo is to actually accept and deliver services on a purely administrative basis. One can only conjecture on how the systems/processes to report and resolve line faults are. Our major 'project' for FY2012 is to make a great deal of progress in providing 'pure IP' services to the corporate and government market places around Australia.It takes time (in our case a little over seven years) to build a network that will meet the criteria of large buyers when it comes to key infrastructure services. The Exetel network meets even the most stringent criteria from even the most demanding large buyer and, apart from the fact it provides services to far more end users for many years than any corporate/government user will ever need, the diagrams demonstrate the multiple redundancies and sophisticated back end controls the most sophisticated IT manager could demand. Part of our reason for, after considering it for the past three years, buying some of our IP bandwidth direct from Southern Cross rather than via a Southern Cross reseller is to more directly address the corporate/government IP market. I don't know just how possible it will be for us to sell 20 or 30 or even 50 gbps of 'pure IP' over the coming 12 to 18 months but, based on our test efforts to date (we have now sold over approaching 20 'pure IP' links with the largest one being 250 mbps and one being 500 mbps if the 'trial' 100 mbps service delivers as expected) it seems more than possible. We have spent a lot of money over a long time frame to build a network capable of doing that and then we have spent an even greater amount of money building a corporate sales force and support group capable of selling at the required levels. We have spent even more money (and are 'lucky' to have incredibly skilled programmers) developing the back end 'control panels' that provide a highly sophisticated view and control over the network connections and interfaces. All that remains is to put in place the pricing that will 'blow away' the horrendously high charges made by current IP providers and on which they have based their forward revenue assumptions. Piece of cake really - well, as long as you are farseeing and patient enough to put in a lot of money over a lot of years developing the required capabilities. Copyright © Exetel Pty Ltd 2011 PS: What I've been saying for over a year: Wednesday, August 3. 2011It's That Time Of Year Again.......John Linton ......when we start looking at our IP and national interconnects again. How time continues to speed by. Like many other buyers of bandwidth, Exetel has two or three year contracts with its suppliers that have annual review clauses in them. Like everyone else who has been around the communications industry for more than 'five minutes' we know the patterns of price changes and the mechanisms that trigger those changes. Having been around since the days when 2 mbps of IP connectivity to the USA cost the best part of $US1 million a year we have seen some amazing falls in IP costs over that time. Similarly the cost of national interconnect between the different Australian capital and other large cities has also fallen dramatically since we first installed 128kbps between Sydney and Melbourne in the early 1990s using ISDN. Ahh, those were simpler and slower days with little or no pressure. Today, Exetel's IP and national network is rapidly closing on 10 gbps and will go past 12 gbps early in 2012 heading towards 18 gbps by the end of that year - if we meet our planned targets. We have three main suppliers of IP and three main suppliers on national interconnect. Another major factor is that increasing amount of our 'IP' bandwidth is delivered via Google and Akamai cache as well as local peering points, particularly in Sydney. Cached IP now accounts for closing on 3 gbps of our total 9 gbps on an average day. That trend is likely to continue in to the future though it's difficult to measure. So we go into the 'negotiating season' this year with a different set of needs than in any previous year.....and with the knowledge that we have always paid too much for both types of bandwidth in the past. The obvious complication in changing bandwidth suppliers is that no sane person wants to go through the potential disruption of moving providers because of all the installation and change over hassles involved....so incumbent providers always have a starting advantage in contemplating changes. Having said that - Exetel has changed suppliers on several occasions because 'incumbents' over play their 'hand' and end up losing the business. Incumbents always have management who measure their sales people on an NSRI basis (they take the level of current revenue as a given and only look at increasing that revenue - pretty difficult to do in a falling market) which usually negates their advantage of no hassle upgrades. In this instance say we are paying $30.00 per gbps for IP and are now looking for $15.00 per gbps we would have to buy twice as much from supplier x just to maintain their revenue at the same level. As we are not contemplating doubling our IP at this time our current suppliers are at a disadvantage to 'new' suppliers who have no current revenue from Exetel to protect. I am not yet sure what price we will establish for either IP or national interconnect but it will be much lower than we signed up for last year. The quantity is likely to be 20% to 30% more than we have now but we are, as always, looking for a net reduction in our IP and interconnect monthly bills. Without understanding any of the situations with our current suppliers I think it's likely that we will buy directly from Southern Cross this year instead of buying through one of their re-sellers. As we progressively upgrade our interfaces with our suppliers from n x 1 gbps links to single 10 gbps links the move between suppliers has become much simpler - at least for us - and for the suppliers willing to provide 10 gbps bearers. So there will be some interesting discussions between Exetel and various suppliers between now and the middle of February next year. Copyright © Exetel Pty Ltd 2011 Tuesday, August 2. 2011Mindless/Lying Media Releases/ReportingJohn Linton The new month got away to a solid start yesterday which I suppose is only remarkable in that we are still micro managing the business on a one day at a time basis. Maybe we can relax the intense scrutiny of every part of the business the the past two plus years have made mandatory some time in the near future but it remains mandatory right now.....if for no other reason than the 'habits' induced by the pressures we have experienced for so long now I have forgotten when there weren't any. Like Danny Glover's character in Lethal Weapon - "I'm too old for this shit" and I am desperately in need of my postponed annual 'break' which is now scheduled to start on September 1st. I have been wondering whether the government mandated 'split' of Telstra in to separate wholesale and retail operating entities will eventually make any difference to non Telstra communication companies. I received the 'documentation' concerning the current proposals which is commented on here: http://www.zdnet.com.au/telstra-split-plan-the-bare-minimum-optus-339319572.htm Personally, I don't see that the proposals will make any difference at all to the predatory nature of Telstra's operations - when you consider the concept logically - how could it possibly do that? The shareholders are the same and the top management is the same and they certainly won't have any desire to allow the operations of the wholesale company to negatively affect the operations of the retail company. Today TW offers to sell Exetel services that specifically target the customers of other ISPs but prohibit the same benefits being offered to Telstra Retail ADSL customers. Does anyone really (and truly) expect that overall business attitude to change? Perhaps there are some naive people in the ACCC who would be prepared to think that would happen. Two other articles on the same issue were even more distorted from crazy headlines to non-analysis of the stupidity of the statements: http://www.zdnet.com.au/1500-cost-rise-on-nbn-australia-on-line-339319540.htm This is the sort of headline you get when the company making the ludicrous statements ignores any kind of reality and the publication sacrifices any kind of commonsense in publishing the crazy headline. I have never heard of Michael Bethune but he is clearly a couple of sambos short of a picnic. The apocryphal "apples and oranges" doesn't go close to his crazy statements....he follows the same illogic as Internode in trying to make a big deal out of the 121 points of presence and the 200 mbps of minimum cvc at each POI. His comparison of "7" POIs with Telstra Wholesale is just plain dumb. Telstra Wholesale 'kindly' provides 7 aggregation points and then charges ISPs a gigantic price for ports and back haul to those POIs. If he/his company really wants to offer services in Longreach (or any other remote area) then he has the same option as he has today - buy the same type of aggregation services from Telstra Wholesale, Optus, Nextgen and all the others who will provide such services. However a tiny company like his should have more than enough market opportunity in the capital cities without concerning himself about the 5% that a thousand towns like Longreach will account for....he can even use his current connections to the seven POIs he is currently connected to and address 85% of the NBNCo fibre 'foot print'. In other words NOTHING HAS CHANGED. I am reaching the conclusion that I need to excise Australian communications media from my morning 'reading list' as the deviation from any realistic journalistic standards has widened so far as to allow the continual printing of total tosh - almost zero relation to reality. It would certainly save some increasingly valuable time each day. Copyright © Exetel Pty Ltd 2011 PS: 45% of Exetel customers covered by the NBNCo 'trial' footprint have now signed up. |
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