Tuesday, November 15. 2011NBNCo Fibre And The Near FutureJohn Linton Yesterday was a deeply unsatisfying day.....and I don't feel that way very often. Nothing seemed to 'go right' and I became more and more irritated as the day progressed which is highly unusual for me as I, long ago, developed the ability of being able to totally focus on important things and ignore anything else. Not yesterday for some reason and, when I woke up this morning, I'm still feeling irritated at the various 'incidents' that ruined my day yesterday - a highly unusual situation. Perhaps the stresses and strains of the past three years are finally making their mark or perhaps I am beginning to realise that I am the wrong person for the position I currently hold. I put it down to the time of year - when so much time is spent thinking about making changes that, inevitably, you question your own abilities, and desires,to continue to participate in operating a business in continuingly tough times. However, fortunately, such days are rare and as every adult learns to do - you get over them. Most of the coming day will be spent on doing the basic 'figures' for 2012 and what exactly we will aim to achieve over the coming months that is different to what we are currently achieving. Our principal change is in how we will operate the business next year in terms of the relationships we have with our current suppliers and what new relationships we need to develop. NBNCo remains a conundrum and I was amused to get an invitation for a 'private dinner' with Tony Abbott to discuss issues of interest and concern to Exetel. I, very briefly, considered what benefits could be achieved by ponying up the $11,000 for that privilege before quickly reaching the conclusion that I could learn nothing of interest for such a very large expenditure. In fact I think Tony Abbot should pay me to give him/Malcolm Turnbull some more sensible views than they currently express on what they might do with NBNCo should they ever get elected. So what does the NBNCo mean to Exetel over the coming twelve months? It is one of the hardest 'calls' to make. I have no doubt that, in the event there is a change of Federal government, that the NBNco roll out will be halted and whatever exists at the time will be sold off to the 'separated' Telstra. If that was to happen it would make very little difference, in the shorter term, to how a company like Exetel would utilise the NBNCo fibre services. The single good thing about the NBNCo is its, current, statement that it will not charge lower prices to large wholesale customers (thus re-introducing the current lop sided scenario). If this process was to be maintained into the reasonable future then companies like Exetel would be able to operate far more profitably in the future than is remotely possible today. Why? Because we have painstakingly and painfully built the infrastructure and operating processes that allow us to deliver any given service at a lower cost, by quite a long way, than any company we compete with. So we can't ignore the NBNCo if it is going to roll out some realistic levels of infrastructure more quickly than it has so far - current scenario is really pathetic. I may be 100% wrong in my view that, at least for Exetel, the current NBNCo roll out is more useful for small business than it is (for us) for residential users. Personally I see almost no advantage of NBNCo fibre for residential users at all at this time and until there is a low cost 'entertainment' service that needs fibre speeds then I can't see any advantage to a sensible end user to pay more for fibre than they do for ADSL. I could be quite wrong - but my view of fibre is that it is of value to Exetel (because of the current pricing that ensures Exetel can compete better than it can on ADSL) I just don't see the value to today's residential user. It could have an advantage for some business users in the country and we do need to work out how to take advantage of that possible opportunity.....assuming it materialises. I hope I manage to maintain a better perspective of things generally today than I did yesterday. Copyright © Exetel Pty Ltd 2011
Monday, November 14. 2011Christmas Is Not Only Coming.....John Linton ....but that means the new year is only six days later. It's now less than six weeks to Christmas and the Christmas party invitations are in full swing with the first events already held. Exetel's Christmas party will again be held at the Star Casino complex though because of their rebuilding program our 'usual room' is unavailable (it has been knocked down) so we will be using a slightly different configuration taking over one of the smaller bars. I am not much of a fan of non-Exetel Christmas events and virtually never attend such things - I actually can't remember the last one I attended as I see zero purpose, let alone benefit, in them. However other members of Exetel's management seen to get great pleasure from them so perhaps I have reached the "Bah, Humbug!" stage of my commercial life (I must remember to cancel that office coal order). Despite living in Australia for getting on for 50 years I still associate Christmas with a totally different set of events and the consequences of cold weather that never seem to allow me to consider "Christmas" as actually occurring in Sydney - perhaps that's why I am not at all affected by it here. Having said that, it is necessary to examine what 'Christmas specials' various companies offer as December draws nearer. I have always found it a pathetic display as crassly money grabbing for venal commercial companies to try and boost their declining sales in the 'Christmas slowdown' (there is no hint of "goodwill towards men") but it is a regular occurrence. The fact that the majority of Australians take their annual holidays in the period from mid December to mid January causes a significant disruption to the 'sale' of a whole lot of products and services including basic communications services such as residential ADSL. Because of this major shut down it also means that business data services suffer "the embargo" when the major carriers will not install new business services for a period of around 4 weeks as they still cling to Telstra's dictat that so many engineering staff are on holidays in December/January that nothing can be done except maintenance. So to conform to the norm perhaps Exetel should offer a Christmas present to new users (bearing in mind that carrier discounts are only ever available for new business and never to "loyal customers") perhaps something totally vomit inducing like "A merry Christmas from Exetel - no ADSL or Telephone payments until February 1st" might conform to the crassness of insincere December offerings? Or maybe an even more insincere "unlimited downloads at no charge in December and January for the first 1,000 new customers....." or something along such lines? I wonder just how tacky an offer has to be to make a 'sales impact' over the coming few weeks? I am sure, given some time we could come up with a truly cringe inducing 'offer'. In the mean time we have to get on with trying to improve all aspects of what we do and formalise those ideas and changes in to a revised business plan for the coming new calendar year. This is made even more difficult, for me, this year by the imminent departure of our planning manager who departs to prepare for her wedding and then long honeymoon - I have become far too dependent on her 'running the numbers' for me over the past year and I failed to take account of the fact that young, attractive, females tend to have a personal life that is apparently more interesting and important than re-creating spread sheets and endlessly dissecting other companies pricing and configurations. So I have lost the 'leeway' that has always been previously available and will have to, really, complete the work by the end of the first week of December..... .....though the up side is that there will be no need to be trying to complete the planning for 2012 between Christmas and New Year's day as has always been the case in the past. Copyright © Exetel Pty Ltd 2011
Sunday, November 13. 2011The Residential ADSL Tide Shows Signs Of Turning.........John Linton ......ever so slowly but it definitely appears to be no longer receding. We introduced the second of a series of changes to our ADSL services late on Friday with 500 gb options for both Optus and AAPT based plans. We introduced a low end 20 gb option for both of those carriers towards the end of the previous week. Both of these 'innovations have seen immediate 'take up' and we will try and evaluate just what 'impact' the are having over the balance of November despite the fact that 'buying patterns' change quite considerably at this time of year. In terms of competitive actions we have noticed that very few Exetel customers move away to TPG these days while a much, much larger number of TPG ADSL residential customers churn to Exetel. Similarly significantly fewer Exetel customers succumb to Telstra Retail's blandishments while more Telstra customers than in the past two years 'return' to Exetel as their long contracts expire.....perhaps proving that Telstra aren't prepared to offer the same financial inducements to retain their customers as they were to 'win them back' two years ago. For these and other reasons we are seeing the 'tide' change from ebb to flow in terms of residential ADSL business though it is still pretty much at the mid point at the moment. So we have been looking at ways that we can speed the 'flow' aspect of the tide having endured a very long ebb period. One of the reasons for a better ADSL performance has been the, very slow, increase in business ADSL services that are beginning to have an overall impact on total numbers - still very small but growing month on month. Perhaps it is the very positive take up of mobile telephone services and a noticeable, still very modest, take up of telephone line services by customers who previously only had ADSL - both those changes would definitely account for the significantly less 'churn aways' though I doubt they would play any part in attracting new customers. Following the modest successes of the new low end plans and now the possible success of the high end plans we will continue to look at what can be done in the 'mid range'. Optus are being quite aggressive in their attempts to turnaround their own 'ebb tide' and the continual fall in IP costs presents a very different scenario for Exetel than has existed over the past three years. How Optus deals in its 'retail' ADSL business with the challenges it has seemed to ignore for the past three years is something I am not privy to....but all the on the public record signs are that they will try much harder in the coming months than they have to date. Similarly I would expect Telstra Retail to re-work their 'win back/welcome home' campaigns in the immediate future as, from our tiny perspective, the current ones appear to have run out of steam. I doubt that companies such as iinet or Internode will do very much as both those models seem to have reached the limits of their 'natural' reach and they will find things much, much tougher over the coming months. Perhaps NBNCo will actually roll out some significant infrastructure from now onwards (though the ongoing delays of their agreement with Telstra indicates that might not be the case) and that will also cause the kaleidoscope to turn producing a bewildering array of new 'patterns'. It will be interesting to see just how much money, and capabilities, the major (and minor) providers have left to continue the ADSL war of attrition into a fourth, even more exhausting, year. Copyright © Exetel Pty Ltd 2011
Saturday, November 12. 2011Teaching People To SellJohn Linton ......is more difficult or more simple than most people think. 32 months ago we set out to build a 'corporate sales force' by recruiting recent graduates with no sales, or even business, experience and 'teaching' them to sell data services to medium/medium large businesses. We have done that well enough for them to have 'won' 1,500 times against virtually all other providers of data services to the business market places and 'taken' those customers away from them. For the whole of that time we have been gradually building up the number of sales people we have in Australia (now a little over 20) and from October 2010 we began a similar program in Sri Lanka where there are now a little less than 20. To date we have used a sensible program of 'mentoring' to help each new employee understand how to approach business customers and promote Exetel's data services to them. This has worked very well, in most cases, and can continue to work well in to the future. It is an excellent concept (absolutely not unique to Exetel but I think we do it better than any other company I have been associated with or am aware of) but it's limitation is that it only allows for slow growth in the actual development of new sales people - even with three North Sydney based sales teams only one new 'sales person' can be developed per month. So, as we need to develop between five and ten new sales people a month, each month, of 2012 the issue of just how we do that becomes the major obstacle - seeing it cannot be done via the mentoring program that we have used to date. Developing sales people capable of selling a semi-complex service such as data via EOC or Fibre is generally deemed (from the opinions I have heard expressed) to be lengthy and difficult - and quite expensive. Personally, I have been quite heavily involved in 'sales training' for the majority of my time in business (either receiving it or delivering it). My, personal, opinion is that 'sales training' is largely a waste of time if not a complete myth. I long ago formed the view that, literally, anybody could sell anything if they had a good mind and were given the right product backed by the right 'tools'. I think this view has been pretty much been validated by what Exetel has done over the past three years.....as it has been previously several times. So now the challenge is to go beyond what has worked for us, so well, over the past 32 months and put in place a process that, over the coming 24 months will allow us to develop (and then effectively manage) a 'sales force' of 300 people - predominantly in Sri Lanka. Not the easiest set of tasks for anyone but almost certainly capable of being accomplished if the right ways can be developed and the right people found to manage those processes; and the constant refinements that will be necessary. The issue is - what processes will produce the required results and how do you find the people to carry them out? I have seen how not to do this several times - stretching back some forty years with the most recent mega flop example around ten years ago. All of those failures illustrated the sheer folly of thinking that you can actually teach anyone to 'sell'.....and then compounded it by thinking that you could ever develop people via 'sales trainers'. Yes, I know that all over the world major corporations are running huge 'sales training' programs with mega billions of dollars spent on 'campus' training facilities and their associated personnel. So that must be the right way of doing it? Ask anyone you may know who has attended a 'sales training' course and see what value they place on what they have 'been taught'. Perhaps the answers will surprise you....but if anyone ever says they found it valuable and it will increase their ability to do their sales job better then I am wrong to hold this view and Exetel will fail in its ambitions. But then I always seem to hold different views on practically every subject to the majority and, I think, I am nearly always correct - at least on subjects on which I have significant experience and demonstrated competence. So my view of 'sales training' is that it consists of a few hours setting out the processes by which an intelligent person can self develop the processes by which they will train themselves by acquiring the information they need to make a success of a sales career. It will be an interesting challenge over the next few months to put this 'different view' in to practice on a much wider scale than we have attempted to do in the past. It is based on my observation that "sales skills" have not changed for 4,000 years and there were no "sales schools" for the first 3,900 of those years. You actually can't teach compassion for your fellow man ("man" used in its generic sense), responsiveness to other people's needs and honesty. Copyright © Exetel Pty Ltd 2011
Friday, November 11. 2011Hedgehoppers Anonymous And Zager And Evans Had It RightJohn Linton I read the SA v Aus test report earlier this morning after noticing the unbelievable 'head line' - it remained unbelievable after reading the details. Also unbelievable, at least to me, is that Standard & Poor could make a 'mistake' that affected France's borrowing abilities: http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html and, if it is to be believed, the financial stability of the planet. I don't know whether the last pair making more runs than the first nine batsmen, Michael Clarke making more runs in his first innings than the other 19 batsmen of both sides in theirs or the fact that Greece, Italy and France have been allowed to borrow so much more money than they can ever pay back bewilders me more. I think it's a nice counterpoint that the news that the Qantas pilots are going to court to overturn the "Fairwork" ruling simply sums it all up - in 2011 Qantas pilots think $500,000+ a year is inadequate payment for some pretty mundane skills - and people wonder why the world's largest countries can't pay their debts? So the sheer inconsequentiality of trying to work out how we can provide better sales training for our newer Sri Lankan employees or how we can provide higher levels of service to our Australian corporate customers makes me want to give up. It's somewhat like building a sand castle on a beach not realising there is a Tsunami coming. I am anything but a 'defeatist' but sometimes I do wonder whether events around the world will make every hour I have spent during my 'working life' completely worthless and I really should have been joining protests about the evils of capitalism with all the rent a crowds that seem to be able to put a roof over their family's head and food on the table without the necessity of having a paid job. Perhaps Rupert Murdoch is right to have closed the News of The World and is now threatening to close the Sun in the UK? Perhaps the increasing media condemnation of the two Sydney Channels 6.30 "news sensationalism" is totally correct? Perhaps the world would be a much better place without any "news" as currently presented by the world's media because, as far as I can see, the world's media - with a tiny number of exceptions can be divided in to only two categories - sensational nonsense containing no truth whatsoever or paid propaganda pushing some government or commercial agenda. Journalists? Simply people who can't get any other job who base their lives on trying to get paid more money by generating as many column inches (or their video equivalents) as possible so they can be paid more. Lets face it "news" that is based on some recent adolescent's attempts to get more money is a very, very flawed concept. As equally flawed as the hierarchy of sub-editors who work for editors who work for publishers who take money from governments and major commercial corporations to "report news" of their direction/choosing. Strange how an abject performance by a cricket team can lead to such dark thoughts. Copyright © Exetel Pty Ltd 2011 Thursday, November 10. 2011TIO Registers Record Number Of Complaints.....John Linton .......which could mean that the telecommunications industry provided even worst levels of customer complaint resolution over the past twelve months . It could also mean that the TIO increased its advertising telling all the scammers and congenital liars who use telephone/data services that they might be able to rip off their provider by telling a pack of lies. The results can be found on the TIO web site and the raw statistics can be found here: http://annualreport.tio.com.au/NewComplaintsRegisterForMembersTable.pdf If you bother to read that data you will find that, once again, Exetel has the lowest number of complaints and all complaints were resolved at the Level I level (as was the case for most other sensible suppliers) which is a pretty clear indication that all the complaints made were spurious, at best, and a pack of lies in the main. Three TIO complaints a week for Exetel and similar ratios for most other ADSL providers indicates that the TIO is completely unnecessary for competent ADSL providers. Looking at the complaints recorded against Exetel, all but a handful were just a pack of lies and demonstrably so made by the 'entitled' sections of Australia's population looking for yet another free hand out from a government department. The TIO represents the nadir of government interference and meddling in things about which it has absolutely no understanding but it pursues as yet another means of providing the unemployable with paid work for the dole and to provide sinecures to its 'friends'. The 'NBN2' and the ACMA are similar examples of keeping otherwise unemployable people in highly paid positions where no possible benefit to any tax payer can possibly accrue. On its record, I am tempted to add the ACCC to that list but although its track record over the years has been uniformly woeful there is some justification for such a "watch dog". The trouble is with the ACCC, like most watch dogs I have observed throughout my life, they spend the whole of their existence asleep except for meal times. The latest complete BS published by the TIO demonstrates the futility of such organisations - advertise for people to contact you to get money is only going to produce one result - and it isn't an improvement in the provision of telecommunications services. Qantas has to go 'over seas' to get engineers to maintain aircraft because Australia's cost of living is inflated by the provision of highly paid jobs to 'workers' at government government holiday camps (AKA the Federal Public Service) which, courtesy of that ultramaroon Whitlam, sent Australian wages (and of course the cost of living) in to the metaphorical stratosphere and ensured that, over time, ALL of the real jobs in Australia would inevitably no longer be performed by Australians in Australia. Does the current situation in Greece ring any bells? Copyright © Exetel Pty Ltd 2011
Wednesday, November 9. 2011Growing An 'Established' Business.....John Linton .....how hard can it be? We have done some of the review work required to begin thinking about what changes need to be made to the current year's financial plan and therefore what changes we need to make to our operations by January 1st 2012. It is a hard slog that requires a lot of thought and some sort of ability to 'read' what, if anything, is changing in the market places in which we operate and in each of our people's desires and abilities to deal positively with those changes - a much more difficult thing to do despite the much closer ability to observe what is happening - assuming you bother to take the time. Changes in the market are not easy to read because even the acutest observer can only see the results of actions taken by competitors well after any changes have been made. Similarly changes in personnel attitudes towards their jobs and their employer can only be seen by their immediate manager and inexperienced managers seldom have the abilities, or often the inclination, to do that. The quality and dedication of the people employed in any commercial enterprise is always what determines the success or failure of any company. Almost all small companies succeed because of the dedication of the founder(s) of that company and the close knit nature of the working relationships between the early employees and the founder(s) as the company grows. It is inevitable that as any company grows that early dedication to 'group' success is gradually eroded and 'group success' is slowly replaced by personal success/reward which is an entirely different situation which needs entirely different motivations and management. Few small companies ever develop the abilities to grow throw that phase of commercial life.......they never have the extended management capabilities to make the change. Personally, I have never been able to understand very much at all about the planning processes that ensure the delivery of the optimum results achievable by a diverse group of people in constantly changing markets although I have been directly involved in those processes for almost three decades and observationally involved in them for another. Like any semi intelligent person I can understand that future performance is somewhat directly related to past performance and that all future forecasts have to take in to account the actions and ambitions of current and future competitors and that all future performance will depend on the individual desires and abilities of the people within any group at the various times in the future planning period - but that's about as far as I can go. I understand, better than most, that is not really an adequate level of understanding to actually produce an optimum 'plan'. So, I always dread these processes which, of necessity, I spend a significant period of my life being involved in. Apart from the huge responsibilities involved, the sheer volume of data that needs to be looked at, and if possible at least partially understood, is massively tiring - especially to an aging brain - or what remains of it. When changes are as constant as they have been for quite a while now i n the communications industry the task of making sense out of what is happening, and therefore what any company should do, sometimes appears to be impossible. I wonder how other people manage to make sense of all the information they need to digest and come up with the ongoing plans they obviously continue to do. There is only one, depressing, conclusion you can reach to that question. However ..... My current conclusions are that Exetel will need to grow at a faster rate than we have achieved, on average, over the past three years and that for that to happen we will need to operate very differently to the way we operate currently. That is the end result of almost two weeks 'thinking' - or more exactly - the latest two weeks of thinking in a chain of such sessions over the past three years. Just how to bring that about is not immediately apparent at the moment, at least to me, but it needs to be 'worked out' over the coming month. Shouldn't be that hard. Copyright © Exetel Pty Ltd 2011 Tuesday, November 8. 2011Language - The Difference Between The Human Race......John Linton .....and every other living thing on the planet.....and every other human being when you come to think of it. I don't know whether you take any notice of languages or the effect they have on you when you hear different languages spoken.....I do and have always done so for as long as I can remember. When Annette and I were in France for a few days earlier this year I was, again, reminded how much nicer spoken French sounds and even how much nicer English spoken with a French accent sounds than my Australianised rendition of English. I think the most beautiful sounding language is Italian followed by Spanish and then Portugese - each of those languages sounds, at least to me, so much more 'melodious' than spoken English - even of the type spoken by the great English stage actors. Our harsh and brutal germanic origin words with their crude pronunciations are pretty awful in the country of their origin and even worse in the Australian versions. Leaving aside the education problems of the last 50 or so years which means that I have difficulty understanding the vocabulary now used in some large parts of Sydney the actual pronunciation of words I do understand often means I have to struggle to work out what is being said outside my own home and 'Anglo Saxon' working environment. Australia's pursuit of multi-culturism over several decades has made it very difficult to fully and completely understand what a growing percentage of people in this country say when they speak their version of Australian English. Anyone who has worked in a call centre would know that a growing percentage of callers are very, very difficult to understand - some are just impossible.....all claim that it is the call centre's employees that are the problem - not them. There is a small, but growing, number of people who 'demand' to speak to a Chinese or other language speaking CSR. 'Regular' Australians seem to have a particular difficulty with "Indian" accents. I have previously commented that even the most meticulously spoken English by highly educated people whose first language is from the sub continent (and by general ignorant extension Sri Lanka) is deemed 'difficult' to understand, not because of vocabulary or syntax or grammar, but because of cadence/rhythm and syllable emphasis. I was particularly aware of how this was a problem by spending those few days in France and being reminded that the French cadence when applied to English dramatically improved the sound of the same words spoken by someone who had never known any other language other than 'English'. This lead to me discussing the issue when I went to Sri Lanka recently with the new General Manager and we met with three different English language 'school' representatives. She subsequently selected a fourth English language trainer. Of the original three, one of them fully understood the issue (of cadence) I raised and had a 'standard' course that addressed that exact issue - obviously it is a known issue - not just casually observed by me. So yesterday we held the first training session in an ongoing program of improving, not the quality of the "English" spoken by our Colombo employees, but how it sounds to Australian English speakers. How successful will this program be? I don't know - when I think of the spectrum of "English" spoken in Australia it would be impossible to under estimate the magnitude of such a task. We must find a way of measuring/tracking progress as time goes by. Copyright © Exetel Pty Ltd 2011 Monday, November 7. 2011The Times Have ChangedJohn Linton
I read an article yesterday (and I would reference it if I could remember where it was) about grape growers in the irrigation areas giving up their land and moving away to other careers. Some of the people making this radical change are third generation growers who have never known any other working life. This, according to the article, is partly due to the longer term over supply of grapes in the wine making industry, partly because of the fall in value of water allocations and partly due to the amount of incredibly hard work required to produce an increasingly less than reasonable income. It reminded me of of how much the Australian communications industry has changed over the past couple of decades since the Australian Communications Act was promulgated. When Telecom Australia was the sole supplier of communications services, and even "Telstra Wholesale" was an unheard of concept, life for Australians was much simpler. Then, in the early 1990s, AAP(T) knocked on my door (metaphorically) and offered huge discounts off Telecom Australia's overseas call rates which we could obtain by installing some simple hardware on our telephone lines and save 60% to 90% of our international call bills...which we promptly did. Shortly afterwards Optus was established by a consortium of, then, large Australian companies - none of which had any background or knowledge of telecommunications thus setting a pattern that subsequently created the 'communications industry' in Australia that exists today....a whole bunch of 'telecommunications companies' whose owners and senior management know practically nothing about telecommunications nor how to manage the resources required to deliver it and all of them focussed on making as much money as possible in the shortest time possible. Undoubtedly Telecom Australia needed to be changed. But it did have many virtues that now no longer exist. Its over staffing allowed country towns and many capital city suburbs to have employees who genuinely went out of their way to help customers with problems and while it may have cost the odd case of beer on occasions line faults that take forever to fix today could be fixed on a Saturday or Sunday with a minimum of cajoling. Also in those days there were no multiple floors of lawyers denying that the company ever did anything at all that would ever cause any customer to complain in the first place or cause anyone who did want to complain to have sell their first born to be able to dispute some outrageous piece of chicanery. While Telstra may have been slower to resolve any sort of dispute in those halcyon days their employees acted with a basic honesty and 'niceness' that is now a distant memory. With deregulation came a multiplicity of wide boys and spivs who became 'instant' communications companies and along with their inherent dishonesty came so much government regulation it makes it impossible for anyone to understand the bewildering complexity of double talk that government regulated spiv talk spews out of the airways and appears in the press. I defy anyone to actually understand what a mobile telephone hand set or mobile telephone service actually costs them let alone how fast the data service is going to be that they order. So 'deregulation' of the telecommunications industry isn't all upside like it used to be when AAP(T) pioneered, via a loop hole, an alternative to Telecom Australia international call charges. If you have a moment or two - see if you can come up with the name of an honest and ethical Australian communications company - besides Exetel of course - I can't. Copyright © Exetel Pty Ltd 2011 Sunday, November 6. 2011Christmas Is Almost Here......John Linton .....which means that calendar 2011 is almost over - gone, like so many recent years in the blink of an eye. I know this is the case because I sent out the details of Exetel's Christmas party late last week and regretfully declined my fifth "catch up" invitation from Exetel's suppliers earlier today. Why suppliers think that such events are of any benefit to anyone or reach even a minimum level of 'enjoyment' is beyond my comprehension. In my experience the only enjoyable such event I have attended in the whole of my business life was an Hitachi customer 'cocktail' party in Las Vegas at one of the function rooms at the Mirage some thirty years ago. The food was exceptionally good, the liquor was off the top shelf and the myriad entertainments were straight out of the Las Vegas showrooms. It was the format that we have tried to emulate for our Exetel Christmas parties (with a much less flamboyant budget) but I have never seen any supplier come close to - quite possibly because the people they invite would feel more at home in some outer suburban Leagues Club. It is a reminder that the current year is rapidly drawing to a close and that the doldrums of 'the Christmas season and the whole of January are nearly upon us once more which means we look back at the last six months of the year and try to make sense out of what has happened so that we can adjust our 'forecasts' as to what might happen over the remaining six months of this financial year. One issue,of course, remains just what will happen in terms of the NBNCo roll out which, like the year just ending, produced millions of 'column inches' but ended up with less than 1,000 customers connected.....never in the history of Australian communications "journalism" (perhaps any "journalism") has so much been written about so little. Unless something occurs that is not currently predicted, it seems as though the NBNCo 'roll out' will have as little affect on CY2012 as it did on CY2011. What may have more affect in residential communications land is the proposed "separation" of Telstra into retail and wholesale....if in fact that happens in any real way.....and that is still, at least to me, highly doubtful. Why do I take such a strange view? Because the only real way of having a national fibre network is for there to be a change of government at the next Federal election and for the current NBNCo infrastructure to be sold to Telstra for 'nothing' and for Telstra to 'turn on' its current fibre in the capital cities and continue to build out the fibre in regional and country areas where it is vaguely practical and to use its 4G/LTE wireless everywhere else.....but then I said that when Krudd was lying to the gullible electorate to get himself elected more than 4 years ago.....so I am still probably wrong. One less important, but quite pleasant, change to Australian internet usage will happen in 2012 and that is the massive increase in trans-Pacific IP bandwidth as a result of the next Southern Cross upgrade. This is already being seen in the steady reduction in SX IP costs that is hitting new lows from at least some of the major providers. What it already means is that IP is becoming a smaller and smaller component of the cost of providing internet services to both residential and corporate users and it that will become even less over 2012 as the various SX providers work out just how to handle what each of their competitors will do with each others customers. A nice problem not to have. As someone who was around in the days when IP bandwidth cost something like $A800,000 a year for 2 mbps (I really can't remember the exact figures 15 or 16 years ago) it still comes as a shock to understand that it now costs less than 10 cents to provide 1 gigabyte of data to your egress router....of course while back haul costs have fallen they now represent the majority of the cost of providing a residential internet service to a 'heavy' user. So, as usual, many things are changing with many more things likely to change as 2012 gets going. Copyright © Exetel Pty Ltd 2011
Saturday, November 5. 2011ADSL Download Cost ChangesJohn Linton
Some two years ago we offered unlimited download plans to see just what such plans would produce in terms of longer term monthly usage. When we had acquired a statistically meaningful number of customers we stopped offering unlimited plans to new users and allowed sufficient time to pass to get a better idea of what such users actually downloaded after the 'novelty' wore off. After two years and some time to time check pointing across a fairly wide demographic of user types we have a much better idea of what unlimited download plans mean in terms of monthly bandwidth usage and changes over time. Over that same two year period the cost of IP has dropped dramatically - partly because the actual cost of IP has continued to fall dramatically but also because the Google and Akamai caches (as well as the peering caches) have significantly increased their provision of data to the point where it is approaching 50% of all IP traffic delivered to residential users. For Exetel, this means that the only significant cost of delivering unlimited download plans is the back haul charged for by the three carriers we use and the profile of some of the people we provide unlimited services to. The port cost also plays some part but not a significant one....except for Telstra of course. What these various cost changes mean is that, if the average downloads by unlimited plan users were to stay the same in the future as they have been for the past 12 months, then there is very little cost difference between an unlimited user and a user who downloads a few gigabytes a month in percentage terms on an AAPT service, more, but not that much more, on an Optus service and only on a Telstra service does the cost difference become substantial - to the point that it couldn't be considered. As we slowly cut over our curnet IP contracts to new contracts this scenario becomes more financially sensible and it must be the same for our much larger competitors. So it poses some difficult questions in terms of what will be offered to residential ADSL2 users in 2012? It poses some even more difficult questions for the NBNCo where back haul costs, at least currently, make it impossible to offer major download allowances at anything like the prices that can now be provided on residential ADSL services. This isn't such a big issue today - where it could be argued that only pirates need large down loads - but as home internet connections are used to deliver FoxTel, and FoxTel like, services at ever denser resolutions 100 gb begins to look like an 'entry level' user and 500 gb is no longer automatically equated to illegal usage....just someone who watches a lot of TV/Movies at very high resolution. The trouble remains that when amateurs (such as federal Governments) meddle in complex professional businesses (like Australia wide communications services) they never understand how swiftly commercial enterprises have to change to meet the rapid changes that occur in commercial life....and therefore they don't ever succeed....it's why all sensible western governments have sold off their commercial assets over the past fifty years...they knew they couldn't continue to run them.....there's no fool like a doctrinaire fool. Copyright © Exetel Pty Ltd 2011 Friday, November 4. 2011Fibre - Very Slowly Becoming An Option.......John Linton ......for a very few people. Exetel is one of the ISPs that signed up with Opticom when they first started prviding fibre to new estates. We haven sold very few Opticom connections - mainly because we do no promotion of the services except for making the service available on our web site. However there is a trickle of new business for these fibre services and I would imagine that would increase now that Opticom (possibly reacting to Telstra's new much lower pricing for the new South Brisbane exchange) has made fibre pricing at its increasing number of exchanges more attractive. Exetel will revise its Oticom pricing later today to take in to account that new pricing and will also add newer NSW, VIC and QLD estates to the list of locations at which we can provide fibre services. We will also offer the new Opticomm pricing in the 'conventional' way (of an included download for a monthly price) - all of these offerings will be lower cost than our NBNCo offerings - because the cost to us is lower - apparently unlike some other ISPs.....and there I was thinking that I was by far the worst price negotiator in Australia. So, I was a little surprised to read some of the comments in this: http://delimiter.com.au/2011/11/03/iinet-blames-wholesaler-for-high-estate-fibre-prices/ particularly comments by the iinet CEO that Opticom port and back haul costs are higher than NBNCo - which unless iinet buys at prices higher than Exetel (which I find improbable in the extreme) simply is not true. Why other ISPs set Opticom based prices so much higher than they set Opticom prices could not possibly be known to me - but it certainly isn't because NBNCo is lower cost for ports and backhaul....Opticom is much lower cost than NBNCo for both. In terms of provisioning cost there can be no difference because, while the Opticom B2B interface is by no means brilliant it is at least as serviceable as NBNCo's - with very good reason! So the Opticom service is lower cost than the NBNCo current pricing by quite a wide margin...... .......and so, perhaps unsurprisingly, is the new Telstra Wholesale pricing for the South Brisbane Exchange though, disappointingly the 'trial pricing' for the Point Cook exchange in Victoria remains at its "trial" levels - at least at this time. Ignoring iinet's claims that the Opticom fibre is more expensive than NBNCo fibre (it simply isn't) there is a strange scenario developing in that NBNCo's pricing is being seen as significantly more expensive than that of a small company like Opticom and, more 'tellingly' by Trelstra's SBEX pricing and consequently the end user pricing being offered by companies other than iinet and Internode. This may well be just a 'storm in a tea cup' in the "big picture" but s it? Currently there are less than 1,000 NBNCo end users and there are more Telstra Point Cook and Opticom users than that and once the SBEX users come on stream there will be 4 or 5 times more non-NBNCo fibre users than NBN fibre users - the majority of whom (except for the iinet users) will be paying much less for their connections than the NBNCo users will be being charged. I have no idea what this means; in the event it means anything - but it is some sort of signal about what Telstra does in the future given that it has the ability to 'do a South Brisbane' at any time of its choosing - and a time of its choosing could be any time the terms of its contract with the NBNCo allows - and currently, assuming the contract was operational NBNCo is so far behind its 'quantity' commitments it looks like it will be 'in breach' of its undertakings for many years to come.....certainly past the time that a possible change of Federal government may occur and I would imagine that Telstra will be pointing out the discrepancies between the NBNCo performance and Telstra's performance in not only delivering fibre services faster but delivering them at significantly lower pricing to the end user than NBNCo. I can't help getting the impression that is the game plan. Copyright © Exetel Pty Ltd 2011 Thursday, November 3. 2011New Network ChallengesJohn Linton As Exetel has continued to grow, and particularly as we have increased the percentage of business customers we provide larger and larger services to we have been expanding our Australian network capabilities at an increasingly faster rate. Time does tend to go by faster than you tend to notice and it has certainly 'flown by' since we installed our first two Cisco 7206's and four IBM X class servers back in late January 2004 into the, then, Powertel data centre in Kent Street with its single 10 mbps (it may have been 20 mbps) ATM IP link. Time flashed by and within a year we had moved away from ATM technology to GiGE connections (a massive leap forward) and had therefore moved on to the next class of GigE 7300 routers as our network work horses - again a massive 'leap forward'. We had also begun to replace the remaining ATM links with I mbps Ethernet links. Earlier this year we again moved up a 'class' when we began to replace multiple 1 gb routers with single 10 gb routers and switches and have now begun to say goodbye to the 7300s that we have used for so long. We are installing progressively more 10 gb links from our carriers (all except Telstra Wholesale who will not supply that level of connection to us and insist we use 4 x 1 gbps links to connect to them in Sydney (presumably to ensure we pay them the highest possible amount of money and do not achieve the easily obtainable economies that 10 gbps links provide). Then we continue the month on month program of replacing our servers with ever more powerful (and ever more expensive) boxes as well as adding greater redundancy to every aspect of the network hardware and links.The 'final' capex for network development has not yet been fully costed for 2012 but it is likely to be much higher than in any previous year by quite some way even though network hardware pricing has continued to fall in some areas...and that's just the hardware. We have begun to talk with our carrier suppliers about IP needs for next year and beyond. Over the last few months our IP usage has first grown past 9 gbps and not long after wards reached 10 gbps. The increasingly rapid take up of business services is accounting for much of this growth and our plans for business services are to grow that part of our business even more rapidly over the coming year. We are now planning to double our current IP to 20 gbps over the coming year and, depending on how successful our current plans are, we may need to treble the current IP before too much more time passes. It's a strange 'vision' and one that I have trouble putting in to perspective. None of that is the 'difficult bit' - except for finding the money to pay for it and make the levels of sales that will justify the expenditures. The really difficult part of such growth is finding the people, internally and externally, that are capable, and want to, be part of that 'transformation' of our current network into one three or four times the size. To date we have been able to recruit really good engineering graduates who have had the potential to grow their abilities as the demands of a rapidly growing and evolving network have required. That is almost certainly still the case but we will need to double our core networking personnel over the coming months and ensure that current personnel and the new personnel we will need to hire have the intellectual abilities, and the knowledge, to take the current network to the next level. A 30 gbps network is going to present significantly more demands than the current 10 gbps network and both bear no resemblance to the 20 mbps 'network' based on two 7206's we began Exetel with getting on for eight years ago.
Copyright © Exetel Pty Ltd 2011 Wednesday, November 2. 2011Better Customer Support.....John Linton ....using new processes and procedures and, if I was a total tosser (which I try hard not to be) I would use a wankerish phrase like "new paradigm"....but even writing those words makes me feel slightly ill. Another Melbourne Cup - another wrong trifecta - I have definitely lost my horse picking ability along with the time it used to need to produce positive results. No big loss - but a sign of the times perhaps. Yesterday was a 'lost day' in terms of business as always but our business sales were above 'target' and we made some progress on other issues. Yesterday was the first day we implemented the 'tweaks' on the telephone support processes which are part of the ongoing project to clear up 100% of all support calls within the first call except for issues that require actions by the carriers. It produced a slightly better result than we achieved in October and it will be interesting to see how much progress is made over the remainder of November and then into 2012. A stumbling block to 'statistical success' is those people who call in for support without having immediate access to their computer/connection - obviously that makes it impossible to do any real trouble shooting beyond checking the connection to the exchange. It is a difficult project and one that will, if it is ultimately successful provide a much better level of service to customers - particularly those customers who are not very technically competent. The aim is month by month improvement between now and June 30th 2012 when we will re-assess what more can b eachieved. Yesterday was also the day we asked customers (who receive the news letter) to help 'populate' the latest version of our AI 'engine's' data base which we hope one day will become a key part of Exetel's support and information processes. Mind you, we have been working towards this objective for over six years with only very limited success but have made some progress since we funded the development of a new 'engine' using full time academic resources at the Sri Lankan Institute of Technology. It will still take some time to develop this technology to being something truly useful in a commercial company such as ours but, despite the many set backs over the years, it remains a very sensible objective. One day...... it will be used as Exetel's primary sales interface to answer initial enquiries. Probably our most important 'support' processes have always been our forum, suggestion and complaint systems which we put in place almost from before we had connected our first customer (in the case of the forum). While I understand that many companies have such processes in place I doubt that any other company has complaints/suggestions/forum posts answered by the owners of the company almost instantly and also have so many sensible suggestions implemented and so many legitimate complaints very quickly addressed and resolved. Our current challenge is to ensure these very positive situations continue in to the future as it is something uniquely positive about Exetel that no other communications supplier can 'imitate'. How much longer the current 'answerers' of these questions can continue to do so is problematic and we need to assess just how other personnel can ensure the effectiveness of these processes continues. By January 1st 2012 we will have put in a set of objectives which will be aimed at improving every aspect of Exetel residential 'support' with discrete measurements allowing us to control the quality of whatever exists currently and allows us to measure the quality improvement, or lack of improvement, each day. I am not sure how to gauge the rate of change these new processes will achieve but we will put quite a bit of effort into moving the measurements away from 'quantitative' and make them all 'qualitative'. It will be a challenge. Copyright © Exetel Pty Ltd 2011 |
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