John Linton's Personal Musings

John Linton

.......and the new year's challenges will begin without the briefest of pauses.

The 'old year' will finish with a very strong month with sales far greater than we expected and revenues also far stronger - for reasons that are totally unclear to me. The most surprising component is that new residential ADSL sales have increased almost 25% over December 2010 while for the previous 11 months they registered decreases of 30 - 40% per month over the previous year. I really don't know what to make of that figure. Corporate sales set a new record for December with an extraordinary increase over 2010 but that can be explained, for the most part, by the fact that we have substantially increased the size of our corporate sales force over 2011. Both those 'results' are very pleasing and are very encouraging entering a new 12 month period.

If I was to look at what has been accomplished by Exetel over the past twelve months I would say that surviving as an independent company is very high on the list. There is little doubt that Telstra's continual actions over the past three plus years have made it very difficult for telecommunications companies to survive and the list of 'known' companies that have disappeared over that period is quite extensive - for the ones that were large enough to be remembered - and even larger for the ones too small to be noted, however briefly, in the 'industry media'. It seems likely that at least some of the remaining 'independent' telecommunications companies will go the same way during the new year but whether this is a good or bad thing is arguable. Is thee any 'real' case for iinet to exist when Telstra provides services at a lower cost over a better network for example?

Also high on the list of Exetel's achievements over 2011 was the building of a much larger corporate sales force - almost doubling the size in terms of number of personnel and more than doubling the number of sales over the year. The development of the business and corporate sales operation in Colombo was also an amazing achievement and has progressed much  faster than I had expected. 'Wielding' that new 'weapon' to its greatest effect in 2012 will be a significant challenge but also a very exciting one. With the ongoing growth of sales and engineering personnel in both North Sydney and Colombo planned for each month in 2012, Exetel may well become a quite different company over the coming year.

The third, in no particular order of importance, major accomplishment over 2011 was the start of the transformation of our core network from a redundant infrastructure based on 1 gbps circuits to a triply redundant network based on 10 gbps circuits, routers and switches with the largest financial investments we have made to date (although they are 'dwarfed' by the investments planned for 2012). Over the past twelve months we have invested very heavily in both hardware and personnel to ensure that our planned residential, business and corporate sales targets are capable of being delivered.

I could go on but those are the three major achievements for 2011. To still be in business, to still be growing and to have concrete plans in place to grow further in the coming year are, probably, achievements enough in the most difficult year I have personally experienced in my commercial life.

May 2012, for both you and those closest to you, be the happiest and most rewarding year of your lives to date.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

PS: A timely reminder:

http://www.telegraph.co.uk/news/politics/margaret-thatcher/8985015/Margaret-Thatcher-was-right-it-should-pay-to-be-thrifty-but-thegovernment-gets-in-the-way.html

John Linton

....one of the saddest, stupidest and most self deluding statements in business life.

It's that time of year again when the calendar year actually ends and even people who live their working lives 'second by second' like me tend to do a 'look back and review' at this time even though I know how pointless it is to do so. There is nothing so useless as looking back at past events and regretting your decisions or the way you addressed past issues - if you think you could have done things better the time to have done that was then - "the past is a foreign country, they do things differently there" (L P Hartley) and in my case they have also locked the borders and aren't issuing any more visas. Similarly looking back at the 'good' things of the past twelve months is equally pointless in terms of any thing practical but it is something that is more enjoyable than looking back at the things you regret. So I tend not to do that too.

What I, and I assume most other realistic people, do is to deal with problems as they occur and try and do something about them at the time. Similarly, when 'good things' happen I try and see how to repeat whatever 'caused' the good thing to happen in the future. Boring and patently obvious but it does save the time not so sensible people put into trying to work out how to avoid past mistakes and repeat past 'triumphs'. Of course this would not work for 'media commentators' who endlessly fill in column inches or air time with stupidly pointless "annual reviews" for most of December (and early January) for their readers/viewers who presumably have the mental retention abilities of a gnat or who didn't bother to acquaint themselves with the facts at the time and some writer/commentator seems to think they would like to be acquainted with the circumstances too late for anything of value to be obtained.....other than their ability to get paid for writing such useless summaries to fill in the media space/time when nothing else is happening.

The new 'business year' will start this coming Sunday and the fact is that if a commercial entity doesn't have everything fully prepared by midnight on Saturday 31st then precious time (in terms of meeting 2012's targets or the balance of the financial year's targets) is being wasted that can never be recovered. But what will most mediocre business managers be doing at midnight this coming Saturday? They will be on 'holidays' leaving the start of the new year to maundering on about how good/bad/indifferent the last twelve months have been and, if they consider their 'working lives' at all it will be to promise themselves that they must get around to doing something or other "when they get back to work" before the alcohol erases their short term memory later in the small hours.

There is no virtue in not taking a holiday at the end of any given year - most people who work hard need such a break having tired their body and their brain over the previous twelve months - but all the sensible ones ensure that the work required to start the new year on 1/1/nn is done before they take their holidays. Personally I have reached an age where my body and mind are permanently tired and I take breaks much more often than each twelve months. What I observe about so many of Exetel's suppliers is that they take holidays at this time of year without either completing their essential obligations to us nor even making any sort of adequate preparations for the coming twelve months leaving us to exclude them from future planning. I find that not only stupid but also very rude. It seems strange, at least to me, that in a business such as telecommunications any sensible person could ever think there are periods when they can effectively shut their business relationships down for a month - they obviously realise that they can't shut their networks down. Maybe such people are able to get twelve month's work done in eleven months - I have never been able to do that.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

....other issues got in the way as they usually do.....which is a pity as it would have been an interesting day's play. Maybe today....

I'm not sure whether it's Internode's sell out that has triggered some change of thinking by residential buyers generally or something else but residential ADSL sales are currently running at almost double what they were at this time last year (the days between Christmas Eve and New Years day). The usual drop off in residential ADSL orders hasn't happened this year and it looks as though we will finish December an incredible 20% higher for the complete month than last year - something very strange has happened......I have no idea what that might be. So I spent most of yesterday trying to find out what may have changed on various competitors web sites but nothing seemed to be any different to what we saw before Christmas. While it is a very pleasant change it is still desirable to see what may have caused it.

Like all 'mysteries', once you begin to attempt to find out what may be causing them you get diverted bit by bit to looking at other related and the progressively unrelated things and before you realise it the day has disappeared and you didn't remember to turn on the television. However it was interesting to see what other providers are doing and its becoming apparent that the last three years have been as unkind to several other providers as they have to Exetel - at least from what I can make out. I don't play guessing games so I can't really spell out what I think I saw but it looks as though the price of an ADSL service (bundled with a real or fictional telephone line or standalone) has increased by around ten dollars a month over the past month or so. I will go back over the prices I noted down yesterday later this morning to verify that assessment but I'm pretty sure it's right.

Why this is the case, if in fact it is, is the interesting question. I put Internode's recent price increases down to simply increasing the value of the sell out - identical to the process and timing that Westnet and Netspace went through. Internode's web site pricing is labyrinthine at the best of times but recently it has become almost impossible to determine how services are priced and the nonsense of "Telstra Wholesale has recently raised prices" is sheer nonsense....unless TW has singled out Internode for special punishment or has recently withdrawn some special "Internode only discounts"....possible perhaps but unlikely. Looking at the prices of Telstra and Optus is always almost as complicated as looking at Internode's pricing and in those companies cases does not reflect their outbound selling 'promotional' offers - so it isn't very productive. TPG seem to have increased their prices but they are becoming a far less significant influence on the market - unless you're iinet of course who still seems to lose a lot of customers to TPG (as well as fearing they will be bought out).

Comparing current prices for the top few providers today to the prices of the same providers in early October gives the overall result I alluded to - the average price of an ADSL and real telephone line service has increased by almost exactly ten dollars in the 'mid range' ($60 has become $70) and a little less in the low range ($30 has become $37). Of course, the very foolish buyers, are still being offered bundled services in the $80 to $100 range but presumably those sort of sheep will always be shorn by the unscrupulous spivs of internet supply. So perhaps the simple explanation is that Exetel's prices are the lowest on the market and don't carry the taint of TPG/Dodo type under provisioning and dreadful 'support'.

I will try and raise the enthusiasm to go through these numbers again this morning to ensure I haven't made some basic errors.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

The start of the fifth day of the 'Christmas break' is noticeable for the fact that I feel like I have had a break which is unusual. Perhaps the avalanche of food and deluge of alcohol over the past four days has had a numbing affect on my sensibilities in a more forceful way than in past years. A few hardy souls will return to the Exetel office today to assist the 'skeleton' staff who took no breaks at all over the last few days and dealt with the almost 200 calls yesterday that still come in from residential customers and those who must be available in case a corporate customer encounters a problem - never over the past seven years - but you can't rely on that.

I intend to watch the cricket for most of the day, assuming there is some and it is worth watching while looking at (playing around with) some better ways of hiring people over 2012. It is inevitable that all orgnisations become complacent with their hiring practices no matter how 'elitist' they tend to be. "Our hiring practices must be excellent - look how well the company is doing" covers the reasons for complacency in most instances. Small companies tend to retain this attitude because the founders/directors tend to remain involved in hiring each new person in the company and how can they ever do anything better than they already do? I know I can never do any better than I already do because I am so good at it and I've done it for so long!

Even if that were true, which I know it isn't, as a company grows more people become involved in the hiring process and in our case it is completely impractical for hiring in Sri Lanka to be conducted in the same ways as hiring in Australia. We currently rely on a fairly rigid set of criteria for resumes and transcripts and a set of 'interview questions' for guiding our inexperienced supervisors/managers in selecting personnel. We could say that these processes work very well - they do - but actually measured against what? We tend to keep personnel we hire for far longer than 'average' but that, in itself is not a sensible criteria - for instance in Sri Lanka we pay so much more than other employers (as a base policy) that keeping staff will always be easy - so that cannot be any judgment of hiring the best people.Similarly do we actually 'train' the people we hire to maximise/optimise their abilities and growth potential? Impossible to say with our current internal policies and practices.

Certainly for the past three plus years we have been so inundated with the day to day problems of just 'staying alive' in constantly difficult and constantly changing market places that we have been grateful enough to continue to grow Exetel's revenue month on month/year on year and have had absolutely no time for such things as improving our hiring and training processes....because we believed them to be the very best we could make them and although we have grown in terms of personnel we have only grown quite slowly - at least compared to how we plan to grow in the future. So, it really is going to be necessary to re-define our hiring processes and to teach/show/explain how to do a much better job to the people who will be hiring some 100 new employees over the coming year....

....and then re-educating the people we have already hired (and are already doing very well within the current Exetel) to do better for themselves and for Exetel in the future. I remember when, because I have been around since the late Bronze Age when sales/service/business training was 'revolutionised' by Video Arts who made 'instructional videos' using John Cleese, Hugh Lawrie and Ronnie Barker:

http://www.youtube.com/watch?v=7nwg96d8g3I

For several years these videos were used by companies across the English speaking world to teach in a new way the 'boring' aspects of commercial interfaces. Because the approach was different, and the people in the videos were inherently funny, these videos enlivened many a dull company teaching process - although they were mainly appreciated for the straight comedy value. I am not for a moment considering using these terribly dated concepts within Exetel but I am looking for a 'new' approach to 'training' and 'education' that will be more effective than our current processes. One of those approaches, as I previously may have mentioned, is some sort of video.

We need to do this now if we intend to meet our 2012 objectives.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.......apart from everything else.

Our key challenge over the coming year is, undoubtedly, hiring up to 100 new excellent people. This, if it happens, will grow the current level of employees by 40% and most of this hiring will be done in Colombo by very young, and very inexperienced people who have very little commercial experience. I have a life long disdain for "human resources" personnel who, as far as I have observed over a very long time are particularly useless at the one key task that might justify their existence - the selection and successful acquisition of new employees. My observation, over a very long time, is that they completely fail at this simple task and their failure consigns every company that employs such people to achieving less than could be achieved by any other means.

So it was with a fair amount of amusement that I read this article this morning:

http://online.wsj.com/article/SB10001424052970204552304577113003705089744.html

Sure it's US data about current US hiring practices but it's interesting enough as an insight in how not to try and hire really good people. Try the test questions at the end and see how you go (would you get a job at some elite US company based on your abilities to correctly answer those questions?). I spend some time each day doing a cryptic crossword and a relatively tough Sudoku - not for fun but to keep my mind 'fit'. I got 1 and 3 correct (because three is simple math and one is looking for the obvious non numeric solution because a numeric solution is not going to be possible and I had seen the answer to five a long time ago). However what such questions tell you about a young person applying for a job is not clear to me.

Buried deep in the middle of the cited article, if you bother to read it, is this:

"The deep, dark secret of human resources is that traditional job interviews don't work very well. In fact, there's been quite a bit of research on the topic. One example is a famous experiment that Nalini Ambady and Robert Rosenthal of Harvard did in 1992, with videotapes of traditional interviews. People who saw 10-second clips of an interview had roughly the same opinion of the interview subject as did the actual interviewer — making a strong case that job interviewers go by first appearances and are fooling themselves into believing they've gleaned additional information from everything that comes after."

I almost 100% agree with this assessment with the only rider being that I believe that you can pretty much decide whether or not to hire someone based on their resume and their High School and Undergraduate transcripts meeting your criteria and simply use the first few seconds of the face to face interview to decide whether you like the candidate or not. This method has always worked for me - but then I have never been in a position where I have been involved in hiring super men/women.

So our challenge is not going to be easy to address - I don't think any of the people who will be responsible for hiring can yet do the '5 second assessment". We do have a 'formula' for assessing resumes and transcripts which tends to avoid most of the obvious mistakes and we do have a brief 'set' of interview questions that are almost fool proof in ensuring that any resume assessment errors are, almost, always eliminated. What are those questions? I wouldn't want to write them here as the 'thought police' are omni-present in our nanny society but they are simple and direct and give a clear observation of any candidate.

So, having read the article can we improve on our hiring processes in Sri Lanka over the coming months?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

PS: Goodbye to a very great man - without whose ideas he "borrowed" Steve Jobs would be unknown:

http://www.theage.com.au/technology/technology-news/father-of-palo-alto-research-centre-dies-20111226-1pa55.html

John Linton

Well, another Christmas has passed and I hope you had a pleasant and enjoyable day in whatever manner you chose to spend it. I ate too much (as usual) and drank too much (as usual) but otherwise had a very enjoyable day with the few members of our family who were able to make it to Christmas dinner/lunch.

Christmas day is very quiet, for all the obvious reasons, in terms of receiving orders but our automated systems don't take public holidays or 'sickies' so they processed double the orders they did last Christmas Day. The actual order volumes are so small that isn't anything like as impressive as it sounds but it is significantly better than processing 50% of last Christmas Day's volume. Perhaps it's a 'sign' that residential business has 'turned the corner' and all our efforts over the past few years will finally result in some tangible increases in the number of customers who understand that low priced services can be provided without any compromise to speed or quality....I am encouraged to think this may be the case by the fact that almost no Exetel customer moves to TPG anymore and an increasing number of customers who did churn to TPG have been 'returning' to Exetel over the past year.

The other noticeable 'statistic' is the almost zero churn away rate to Internode and iinet over the whole of 2011. Our statistics show the churn away rate to iinet has been almost zero since we began collecting meaningful statistics but the churnaway rate to Internode fell sharply over the past 24 months and to zero over the past few months. Churn aways to companies like Primus, Adam and Optus are practically non-existent with only Telstra dominating churn away destinations and, over the past six months, Dodo beginning to figure in the stats. However, mainly because the Telstra "win back" campaigns have moderated, churn away daily numbers have fallen by 75% over the past almost six months while churn to numbers have more than doubled. Perhaps there are deep changes beginning to affect the residential ADSL marketplaces replacing the wave after wave of unrelenting 'win back' offers by Telstra?

Over the past month or so we have looked at the few 'NBN2 Wholesale' offers that are being tentatively promoted. All of them are commercially non-viable at the moment but, and this seems to contradict everything ever averred about 'NBN2' pricing, there seem to be indications of a change in the overall 'NBN2' pricing that will provide large buyers (Telstra springs to mind) to buy at preferential pricing that would allow, possibly, a true wholesale arrangement to be put in place. At the moment the wholesale offers are a non-event and offer absolutely nothing in terms of commercial viability - but that may well change assuming that Stupid Stephen, Juliar and co can handle yet another 'policy reversal' along the Carbon tax lines of - "and I promise you there will never........." To date there has been no advantages for the Exetel customers who have changed from ADSL to NBNCo and that seems likely to be the case, at least for Exetel, for some considerable time. May well be different for FoxTel of course.

I am trying to finalise the Exetel small business offering over the next few days. The small business ADSL plans we are currently offering have been generating more interest each month since we began to more seriously address these market places and I am encouraged enough by the progress to date to try a bit harder than we have in the past. Part of our plans for next year are to put in place a dedicated outbound sales force and a dedicated small business support team to build our sales of ADSL small business offerings on the basis that, one day, these would be a more sensible way of using any eventual 'NBN2' services than stealing more movies/TV shows more quickly which, as far as I can see is the only residential use for NBNCo services at the moment. 'NBN2' is years away from impacting on the business marketplaces but, one day, 'NBN2' or Telstra or, outside chance, someone else will provide fibre business services that will be more usable than ADSL.

If residential ADSL sales continue to improve over the coming year as they have over the past few months it would make it much easier to deal with the 'NBN' issues than seemed likely a year ago....the long time frames involved in an NBNCo fibre solution for businesses can be more than adequately addressed by ADSL2 in the meantime.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

....and thank you very much for your support of Exetel over the past year - Annette, Steve and I very much appreciate it. 'Traditional carols' are playing in the background bringing constant reminders of happy boyhood Christmases far away with more than one old favourite bringing a few tears every now and then. The aroma of cooking is beginning to spread through our house as it must be doing in the majority of dwellings all around Australia at this time despite the 'unseasonality' for cooked food in summer as the grouches may observe and I, like most people I imagine, are looking forward to a very enjoyable day.

I checked Exetel's 'progress' earlier this morning and even on a Christmas Eve Saturday orders for many residential services were at relatively high levels and there were even two corporate data orders submitted - something that has never happened before. With seven 'dead' days to go we have exceeded all of our December targets and look like finishing the month more than 20% higher than in December 2010. So a great month's results to end the best revenue year Exetel has ever enjoyed....profit?.....we will have to wait to see if 2012 can make that grow to something more consistent with the huge efforts we put in to supplying services...there is no hurry.

I am continually surprised, and humbled, by the number of customers who have supported Exetel for so long - some since our first month in business. These are the percentages from our first year:

2004 - 02.5%

2005 - 05.5%

2006 - 09.0%

2007 - 10.0%

2008 - 12.0%

2009 - 17.0%

2010 - 21.0%

2011 - 23.0%

So, to all of us who have allowed Exetel to make it through 2011 - mainly our customers but also our personnel and our suppliers (apologies to Tiny Tim who had far more reason to say it) - God bless us every one.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

PS: http://www.telegraph.co.uk/news/religion/8975721/Why-the-lowly-shepherd-is-the-one-who-gets-to-hear-the-angels.html

PPS:http://blogs.telegraph.co.uk/news/tomchiversscience/100126056/in-praise-of-jesus-christ/

John Linton

.........undoubtedly the toughest year since Exetel has been in business and one I will personally be very happy to see the back of.

It must be Christmas because breakfast this morning was the first cut of the Christmas ham on toast and there were only two overnight emails to answer. It has yet to get out of Autumn weather mode with the morning starting quite cold and although the temperature is only now just warming up in this part of Sydney there are an increasing number of very dark clouds that have just 'extinguished 'the sun. Annette assures me that all the Christmas shopping is done and all that remains is for her to spend some eight hours in the kitchen this afternoon and from the crack of dawn tomorrow to prepare the food to feed the dwindling number of family attendees at Christmas lunch while the rest of make half-hearted offers of help which we are glad to see refused..

While the 'business year' has been truly burdensome in the worst possible ways it has also been the most successful year of Exetel's short existence with record revenues, fantastic growth in our business services and the highest level of investments in our network infrastructure by more than double of any previous year. We also now have 150 employees, 30% more office space than we started the year with and a new partnership on which to build our very ambitious ongoing developments in the coming year. So, perhaps, 2011 should be regarded as a necessary evil in a transition to a more interesting, and hopefully more pleasant, future - although it is hard to forget just how truly horrible it has been.

The horribleness of 2011 has been underlined by the late in the year sell offs of Transact and now Internode to the omnivorous iinet which illustrate just how difficult it is for many people to see a positive future in the Australian telecommunications industry for the people who are still in it (a number less than 10% of the total of 6 - 7 years ago). This is not a bad thing of itself as, when you look at the scenario rationally neither Transact nor Internode nor the hundreds of other companies that have disappeared over the past five plus years actually provided very much to their customers that wasn't already being provided by some other supplier....which, no matter how you wish it wasn't the case, is the actual fact of the matter. The current 'NBN2' adventurism (blamed by Internode for their decision to quit - although that obviously wasn't the case) starkly illustrates how even billions of dollars invested with no possible hope of a return cannot actually deliver anything of any value to Australian society generally and also cannot even change the time frames for any value to be delivered by any other means.

Since the Internode sale I have been asked when Exetel will be sold off by a number of sensible people. These people observe that there appears to be no place for companies of Exetel's size in "today's" telecommunications marketplaces and cite Internode as an "excellent company" that couldn't survive in the coming 'new telecommunications world'. Of course they may well be right and based on the past three years of personal stress and immense strain it is not difficult to see their viewpoints. But the companies that have given up whatever ambitions and reasons they may have had for being in the Australian telecommunications business clearly saw no reason to continue to be in this very difficult and very unrewarding business - they took the money that became available from their long and hard years of efforts and went off to do something else. A sensible personal view and one which no-one would see any problem with.

If I had any ambitions relating to money then now would be a good time to look for a buyer for our small company. But I don't. I also have no ambitions for 'Australian market domination' that, apparently, are at least part of the rationale for some people; those with no understanding of commercial or any other history. We had a modest ambition when we started Exetel which we probably never got close to achieving but, in any event, Telstra rendered largely if not completely redundant some three years ago. However on the way to not achieving that ambition we did build the necessary infrastructures to allow us to aspire to another, quite possibly much more important contribution to Australian society (as well as fulfilling our own personal modest aspirations as individuals and as a company). So, perhaps unusually, in 2011 - Exetel's reasons for remaining in business are still as brightly self evident as they always have been and allow all of us to have a sensible reason for going to work each day other than to make our shareholders wealthier.

So, until my personal lifestyle finally breaks the robust health that an accident of birth endowed me with I have a very good reason to continue to contribute to the ongoing well being of my adopted country which has been so kind to me - I also cannot imagine (perhaps I lack imagination) a more interesting way of spending my waking hours......it's a long time since I felt the need to have any sort of hobby.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

........and I very much doubt Internode selling out to iinet was for the 'public' reasons stated....it was simply money.....as always; that and the slight fear for the future of residential services and the sheer burden of running an ISP these days....after 18 years of easy times with the last three being an increasing pressure.

Exetel had another truly excellent sales day yesterday with a flood of business data orders and residential orders for most services showing no sign that it's practically Christmas. So more Exetel people say goodbye to take their Christmas break and the office is progressively emptier. It really has been a remarkable December so far and, it may be 'crowned' today with our, by far, largest ever sale of business data services made by one of our "silly young girls" as one of the drones at Macquarie Telecom refer to Exetel's corporate sales force. They are predominantly young but both their degree transcripts and their performance in their jobs makes them anything but "silly". 113 more wins for the "silly young girls" so far in December - 113 more losses for the competition's 'sales forces'. Just who is "silly"?

I read about the Internode sell out to iinet yesterday afternoon although what little 'explanation' there was made no sense to me....but then I am not too bright when it comes to these sorts of things. I thought it went beyond naivete to suggest that "Internode would continue to operate as a separate entity" and that "no changes would be made at Internode"  - if that were the case why pony up $105 million? To more than naievely suggest that "look at Westnet" - still operating independently after almost 4 years" is just a laughable lie - as any Westnet employee or customer would attest to. Not that it matters - no-one shells out money to pay for something they don't intend to change and there is no need to say such a thing. It was obvious, at least to me, that the steep increase in Internode customers churning to Exetel over the last two months or so as Internode raised its residential ADSL prices was eerily reminiscent of Westnet's similar exercise as they boosted the ARPU of their customer base prior to selling it as was the recent wholesale firing of high priced employees to boost the profit per month.

Does it actually mean anything?

I can't see anything changing in the 'industry'. The reality is that Internode was/is a high priced residential ADSL provider with perhaps 3% of the residential marketplace being bought by another high priced supplier with perhaps 10% of of the residential marketplace. What changes? Nothing at all. The mumblings about "protecting iinet from being taken over by TPG" are nonsensical - it can't possibly affect such a scenario if in fact it exists. Why TPG is buying up iinet shares suggests that TPG is interested in acquiring iinet but that scenario, if it is correct, has a long way to go and would be of no interest to anyone other than the iinet directors/senior management who would lose their toys and have to find new jobs.

The other nonsense talked about the "NBN making it imperative to be very large to compete in the future" is equally the sheerest nonsense. Apart from the fact that there is currently no NBN and its anyone's guess as to how many years it will take before there is any sort of NBN and what change(s) will take place when/if there is one? Will Telstra be anything other than a lesser threat if the NBN ever gets built? Of course not.... it will disappear as the threat it is today and is unlikely to ever be  as 'threatful' as it has been in the past. Irrespective of what conjecture, passing for insight, suggests - if there ever is an NBN, Telstra will never dominate the Australian telecommunications market in the future as it has in the past....Foxtel might become the major provider to the residential marketplaces with better management....but not Telstra.

The relevance of Internode being bought out by iinet? Nothing at all to anyone other than to the personnel within the two companies who will be made redundant.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

We had our best ever corporate 'December sales day' yesterday with 20 new corporate data link orders; it was actually the second best corporate sales day 'ever'. Residential service orders were also well above this day last December and the forecasts for the remaining, usually 'very quiet' remaining days of December, are surprisingly strong. The 'dog days' have, apparently, not yet arrived for Exetel.

Our announcement yesterday of our partnership with AAPT to sell their business services via a greatly expanded sales and support operation in Sri Lanka 'triggered' a surprising number of xenophobic responses which I find very strange in the 'globally integrated' world of late 2011. Apparently it has escaped the uninformed people who wrote to me yesterday that Australians, and residents of all 'developed' countries gain enormous benefits from the globalisation of world commerce. To make this, bleedingly obvious point, the fact that Japan has to 'export' automotive manufacturing jobs to the USA to save money sums up the issues in today's commercial world:

http://online.wsj.com/article/SB10001424052970204879004577110773296061352.html?mod=WSJAsia_hpp_LEFTTopStories

In today's commercial world many changes are required that would have been 'unthinkable' in past decades....who could have imagined that the richest country, by a country mile, of the 1980s would be viewed as a cheap labour source in the 2000s?

I responded to several of the people who accused Exetel of being part of the "bankrupting of Australia by 'off shoring' Australian jobs" by sending them that article and also pointing out that Exetel was in the process of increasing the number of corporate sales and engineering positions in Australia by 30% over the next 2 - 3 months as a result of it. There are no such things as 'Australian jobs' unless they are jobs that physically need someone in Australia to do them - dig things out of the ground, grow things in the ground, build things over the ground or provide services to people and infrastructures located on the ground (hotels, office buildings, residences, roads, rail links, airports). Everything else becomes a matter of cost effectiveness and skill availability and investment returns....and the willingness of people to do the required work - something 'Australians' are very 'picky' about.

If our partnership with AAPT is successful then we will double the number of personnel in Sri Lanka over the next 12 - 15 months to around 200 professional employees - something that will be very good for a country that struggles to emply its university graduates in meaningful positions at reasonable salaries. AAPT will increase the number of Australian personnel employed because of the work being done in Sri Lanka as will Exetel in Australia. Would these additional people have been hired if the Sri Lankan venture did not happen and was successful? No. So the money invested in the Sri Lankan operation produces new jobs in Australia - apart from the fact that it also allows Exetel to continue to exist and allows AAPT in Australia to consolidate its Australian operations doing the things it is good at - employing more Australians to build new telecommunications infrastructures and providing telecommunications services that allow Australian businesses to reduce their communications costs. It's all very basic and very simple and it surprises me that such issues are even raised by anyone today.

I must find a way of communicating simple facts better than I have done to date - but then I am continually surprised that people who comment on such issues have so little understanding of what they attempt to criticise. 'Old' jobs will continue to disappear from Australia (and every other country in the 'developed world') as new technologies make it more efficient to do the work in other locations - you wouldn't want to buy a flat screen TV or mobile telephone hand set made in Australia would you?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

We had a 'formal' meeting with AAPT yesterday at which we signed a partnership agreement under which Exetel will sell AAPT's small and mid range business services to Australian users via its Colombo based sales and support operations which will be vastly expanded to meet the agreed targets. The costs of doing this will be equally shared between the two companies and Exetel will increase the Colombo sales force to 100 sales consultants by December 2012 under these arrangements and, if the targets under this agreement are met, to 240 sales consultants by December 2013. Currently Exetel sells around 50 AAPT business services each month averaging around $700 per service and these numbers are planned to increase to around 400 new business services per month by December 2012.

We have been developing a business sales force in Colombo for just on a year now with Australian sales personnel visiting Colombo and managing the people that were being transferred to the new operation from residential sales and for the last few months being directly hired in to it. We have been following a slightly adapted 'Australian model' in terms of initial training but we have, obviously not been able to use the highly successful mentoring program that has been such a success in Australia - but a long distance version of it. To date that has worked well with there being no discernible difference in the times taken by the individual sales trainees in Colombo to make the first ten sales they need to get 'off probation'.

The key to the success of this partnership will be, as always, the selection of the correctly skilled and motivated personnel and then the quality of initial and then the ongoing training with the day to day management being the final determining requirement. Can we find 240 people of the right temperament and drive and, most importantly, can we find 25 high performing managers for those people? I don't know at this time. What I do know is that over the past year we have succeeded in meeting each of the targets we have set ourselves in building this operation from ground zero and throughout those early days we have anticipated and correctly dealt with the issues that have arisen. Whether we can continue do that - only time will tell.

Clarissa, Clare and I will go to Colombo to run a 'formal' sales school for the new recruits (plus the 'old hands') in which we will introduce the new ongoing technical and sales training processes that we have begun to put in place. Steve and Annette will also be in Sri Lanka at that time and we will see if we can generate some media coverage of this new program - not because we need any publicity for the program itself but because we need to ensure we get some greater exposure to possible new employees - which we see as being a major issue to be addressed - the number of new employees we need to attract over the coming year is one of the key challenges.

This is a major change for Exetel - both in market place direction and in working with a partner for the first time, in the full sense of that word, to enable us to develop the company much faster than we would be able to do using our own financial and personnel resources. However we have put a lot of thought in to this change and we have tested almost all of the assumptions it is based on.

A brave new world in several respects.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....are those times about to be repeated in the current generation of the human species?

Personally I blame the current parlous state of so many countries around the world on the internet and the ability for so many people to steal other people's property more easily as causing the current slide into oblivion of at least the 'western world'. I mentioned a day or so ago that I was surprised to be told that many candidates faked their qualifications in their resumes when applying for engineering positions at Exetel. As some who has read 'creative' resumes for several decades now I am aware of candidates desires to make their resumes look as good as possible and often exaggerate their achievements but I have never seen people out right lie about the degrees they have achieved - and to an extent where it is quite blatant. It implies that the morals and ethics standards of "university graduates" have fallen dramatically over the past few years and you have to ask yourself why that might be?

The countries of Europe are plunging into the abyss of total financial collapse, at least that is the only conclusion you can reach after reading the financial media of the EU over the past few years. Why has this happened? Again the only conclusion you can reach, based on the column inches, is that 60 years of socialism has removed the desire for many Europeans to actually do any work at all to produce the money required to keep them alive in the luxury they have come to believe that they deserve. The dumber 'citizens' now believe that a 'pension' from the cradle to the grave is a perfectly reasonable way of living and the smarter believe that ripping off all and sundry in banking or other service industries with retirement by 30 is a perfectly acceptable contribution to the societies they live in.

There is the remainder of responsible people building Mercedes and BMWs but even they are beginning to drift into making weaponry to allow the rest of the world's countries to more effectively kill each other in their own pursuit of wealth without work. Farmers are more than happy to be paid not to grow crops or produce dairy products and those that do bother any more are using cruelty unseen outside German concentration camps of the second world war to deliver protein in ways that would have caused their arrest and incarceration not long ago as cruel monsters. That's before many of these EU, and other, countries around the world, have turned the clocks back to the middle ages and allowed the crazier religions to again begin to dominate their societies with the insanest of 'Christian' cults in the US and the woman hating cults of the African deserts trying to turn France and the other countries that have 'welcomed them' back a thousand years in time.

I am not sure which is worse - religion or socialism - in terms of destroying the reasonableness and productivity that allows people to live enjoyable lives but when, as in today's France, you have both then any country is totally screwed....and, as goes France, so goes mainland Europe (the UK has found its own, different, ways to ruin one of the most beautiful countries on the globe's surface). There's not even a chance of a good war to restore some sort of sanity any more which, apart from the inevitable loss of life, is regrettable because at least a good war forced people to remember that all individuals had to contribute to the society they lived in and what happens if they didn't.

Thank goodness we have a mining industry that prevents most Australians from having to do any work to live in the luxury that is afforded them - but what happens when the Europeans and Americans have no money to buy Chinese exports? Never mind - Centrelink will continue to pay out....won't it?

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

PS: while predictable it is still disappointing:

http://www.usatoday.com/tech/news/story/2011-12-19/att-tmobile-merger/52076342/1

John Linton

....it certainly doesn't feel like any Christmas I have experienced in the past.

Not the brightest day to start the last 'real' week of the commercial year with drizzle over the harbour and quite heavy cloud over the rest of the 'skyscape'.....it's not particularly warm either - even for this time of day. The EU financial press was equally gloomy and though I haven't read the Australian press this morning it's probably similar. The US media was as incomprehensible as usual, to me, with more space given to the Philippine floods than to financial maters - even the illegal migrant boat sinking off Indonesia got more space than the payroll tax credit extension. A sign of the time of year as far as the world's media is concerned.

It's difficult among all the 'wind down' activities that are so evident around every aspect of Sydney at the moment to maintain a sensible focus on year end commercial life. Even the roads were semi empty when we went in to the city yesterday for a Japanese lunch at The Rocks - far less traffic than any 'ordinary' Sunday. I re-made a 'must do before the end of year' list earlier this morning and it was surprisingly short - either reflecting an unusual level of efficiency this year or a lack of desire to complete the usual amount of work......I suspect a bit of both.

We have been doing a higher level of recruiting in Australia than we have done at any previous time in Exetel's brief 'life' - both for trainee sales personnel and for pre and post  sales engineers. The number of applicants for engineering jobs is extraordinary high but the 'quality' of the applicants is far from the levels we are looking for which has been very disappointing to date and it is going to take much longer to fill those positions than we had planned. For the first time we are noticing that an increasing number of applicants are faking their qualifications rater than just faking their work experience attainments (a common practice of all types of applicants in Australia and probably most other countries). That is something I find quite strange and perhaps is a sign of today's society where theft, lies and pretences have infiltrated to an alarming degree in so many parts of today's 'life'.

In any event we are finding it more difficult than we expected to recruit good engineers and slightly less difficult to recruit sales trainees in Australia than in the past. This is, undoubtedly, partly due to applying slightly higher standards than in the past but mostly due to a lower percentage of candidates possessing the 'right' attributes. Perhaps, for reasons I can't determine, Exetel has become a less attractive potential employer than it has been in the past....or alternatively perhaps their are more attractive potential employers than have previously been available right now? For whatever reason we need to re-look at our recruiting methods that have been so successful in the past - just one more example of the need to constantly change and improve everything a commercial company does.

Apart from attempting to complete our recruiting, which it now seems we will not be able to do before the end of this coming week, there are only a few things that need to be done over the next few days....which is somewhat eerie as I don't recall experiencing this 'lack of pressure' in the past. 

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....something Exetel has never considered.

Throughout my long commercial life I have had only one good manager and a large number of bad ones. I have worked for four multinationals in my first years in the industry (NCR, IBM, Univac and Fujitsu) from the age of 18 to 35 and I think that length and breadth of experience enabled me to judge fairly accurately the 'goodness' and 'badness' I experienced across the years. I think it would be fair to say that the universally awful quality of level 1, 2 and 3 management at those companies (and, of course in those days from the mid 1960s to the early 1980s) did not prevent any of them from 'prospering' in some senses but it's equally true that the awfulness of the management at Univac from level 1 to the CEO did cause that company to close down and the genuinely terrible management at Fujitsu, from MD to level 1 meant it wasted almost ten years before it began to make headway.

If I look back at my level 1, 2 and 3 management years (sales management, branch management, national sales management) I could say I was an excellent manager  judged in terms of consistency of results produced (uniformly excellent over almost two decades), personnel retention (close to 100% over the same period) and the fact that so many of the people I managed in previous companies applied to work with me again when I moved to a new company. Although I had attended both sales management and more general management courses at IBM (never at any other employer) I don't recall ever learning anything of any importance other than the 'plane crash object' type games that demonstrated to overly self confident people in their own judgments (such as me) that group decisions involving people summarily judged to be of inferior intellect invariably produced better decisions than the ones the brightest individual in the group could achieve....something I have never forgotten....a chastening experience.

As our number of personnel move slowly, but inexorably, upwards and will pass 150 professional employees in the not too distant future how the various aspects of the company will be managed in the future is something that needs to be addressed. With almost no exceptions we have built Exetel by employing new or recent graduates and relying on the 'command economy style' of management common in start up companies of the founders/directors providing 'global' management of all aspects of the business. Over the years, as the first people we have hired grew in experience and knowledge they assumed the various management roles though the people management skills were restricted to what, as highly intelligent people, they learned as they went. Pretty much like multi-national companies have always done and still do - and as IBM continues to demonstrate - that works just fine.

As a person who made a handsome living from running management schools up to MBA level back in the old days I have never actually changed my mind about how someone becomes a good manager which was crystalised for me by the only good manager I ever met when I was about to go to my first IBM management school. Jim Gallagher, the best manager I ever worked for or met, gave me this advice. "Have a good time and maybe there will be something new you will learn. Always remember that there are only three characteristics of being a good manager and they are all inherent traits and no-one can teach you them. Only pick people, after they have met the criteria you can check in their resume, who you like instantly and you are prepared to love like a brother (we had no girls in IBM sales in those days so no gender attraction could compromise the meaning ) - never compromise. Once you have employed someone always give them whatever they need from you to be successful in their current job and then also help them develop the abilities to be successful in their future career....everything else is irrelevant.

I am not sure how you actually 'run a management school' to put over those points.....though I used to spin it out over four and a half days and charge mega money for the privilege of attending.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46

John Linton

.....something that we have never done at Exetel.

It's the last weekend before Christmas and I have time to do my, limited, Christmas shopping instead of having to use the afternoon of Christmas Eve as has been my unvaried custom over the decades. I don't know whether that means I am more organised than in past years or whether I just have less to do as I become less relevant. Yesterday, as predicted by every similar day of every year that I can remember, was a very good sales day with a big 'surge' in corporate data orders and even residential ADSL being over 30% up on the previous Friday with above average results being achieved by most other services. There was even a significant increase in account payments from even the more dilatory of late paying business customers. So a very satisfactory 'last real' day before the Christmas holidays. We began our own Christmas preparations last night though we broke with 'tradition' this year and did not buy a 'real' Christmas tree - I am not sure whether that means anything in particular.

Over the past few days I have put some time into developing a 90 minute sales presentation to be given to our 36 sales reps in Colombo in early January. I cn't be sure but I think it must be over 30 years since I did any sort of 'formal' sales training and that was in the year of my life when I did nothing else - the original "Exetel" was a consulting company (of two people) and our major service was sales and sales management training for IT companies. It was a lot of fun and very lucrative but I eventually gave it up because it was deeply unsatisfying to spend a week or so training sales people knowing that they would go back to being managed by less than stellar sales management (or training sales managers that would go back to being crushed by dumb 'senior sales management' who would never permit them to manage sales forces humanely and effectively.

So I have got some quite disproportionate measures of pleasure from first sketching out and then adding the details of a ninety minute 'session' that aims to teach some rookie sales people everything they need to know and carry out to be more successful in selling than anyone else they will compete with (no matter how experienced they are, how knowledgeable they are or what company they work for) from day one of their 'selling career'. It is a useful intellectual challenge and, in these circumstances, something that we have to get exactly right to ensure that our new ventures in to corporate data services is as successful as we can make it from 'day one'. It is only the first part of a newly developed sales training program which, over the coming fifteen months, is aimed at training over 100, perhaps up to 200 new sales personnel.

I haven't 'done anything different' for well over three years now as we have been forced to fight through the Telstra induced changes to the residential data and telephony marketplaces. Since we first planned to change to developing our business services I have only been able to 'spare' very little of my own time to helping to build the sales and support personnel on which we will depend so heavily from now onwards. It is refreshing, not quite the right word, to be able to spend some time being involved in the training and planning of something new and exciting rather than spending endless hours trying to figure out how we can reduce our costs to allow us to reduce our residential prices in marketplaces where 'price', if it is not at or below cost, is a "rip off" according to the majority of people who buy residential services. I am not complaining - that's the way it is - but it's a dispiriting way of spending three years.

So I will finish preparing the backbone of the presentation over the next week or so and then plan the three follow up presentations before the end of January after I get some feed back from the first one. Exciting times.

Copyright © Exetel Pty Ltd 2011
ABN 350 979 865 46