John Linton
We have done a lot of work over the past few weeks to try and improve our ability to continue to not just survive but to grow in line with our slightly revised (December last year) business plan. Being a company that operates on very low margins (so that we can deliver on our basic reason of being in business of offering the lowest end user pricing in Australia) makes it extremely hard to offer even lower pricing than we currently do as the vast majority of our service costs are determined by our major suppliers and we make the slimmest possible profit margins on our end user prices. Sure, we will get a financial operating cost benefit in mid year from reduced IP costs and we have also obtained some other cost reductions on mobile minute costs but these, divided by the current number of users, are around $2.70 per user - not exactly breath taking (or even noticeable) reductions for a customer.
However, as you may have seen, we have added some significant value to all of our current residential broadband plans over the last day or so by including 100 free (in the actual meaning of that word) VoIP calls and also some increased download allowances in the 12 hour period to noon each day. We had hoped to have in place a really competitively priced ATA and 'magic box' by the time of these announcements but we have, currently, failed to do that. We believe that the current plan improvements together with the other changes we will make over the balance of this week will maintain the very strong growth in these services that we have experienced over the first three months of 2009 while continuing to deliver even better value to many of our current customers.
One of the successes of our 'new' directions is the 115% growth in high end business activations achieved in March with the low cost Ethernet services leading that growth and the new sales personnel making an impressive start to their communications sales careers. This has been encouraging and has turned out pretty much at the high end of our expectations. We will continue to make some serious attempts to quadruple our monthly sales to small/medium and medium sized businesses around Australia and will base these efforts on developing a significantly sized outbound sales force and a series of new and improved services at even more aggressive pricing than we currently have in place. We have increased the included download allowances on many of our business plans to 200 gb and have also included options of 'unlimited' downloads for some business users.
The new GM of our Sri Lankan company takes up his duties today and, assuming that everything goes to plan, we will slightly accelerate the transfer of the remaining back end processes from the Austraian to the Colombo office as well as increasing the speed of knowledge transfer. While we still have a very long way to go to complete this transition it continues to make progress along the lines we had originally expected. Once we complete the knowledge transfer we will look more seriously at selling services in Sri Lanka in addition to providing services to Exetel in Australia.We will also pursue the opportunity of selling back end support and administration services to ISPs in New Zealand if the current progress continues to be made.
Hopefully we will be able to resume offering new ADSL1 services in Tasmania before the end of June and we will attempt to finalise our efforts to also offer ADSL2 services shortly after that. We have been considering how to move forward with ADSL2 services for well over two years but with the ongoing uncertainties that affect almost every aspect of that decision we had all but abandoned doing anything serious about it. The opportunity of the new BassLink pricing, while nothing to get really excited about (except that it it is so much lower than Telstra's previous pricing), does change all previous thinking about services in Tasmania and, we will make some real effort to finalise the business case for offering our own ADSL2 services in at least the four larger population areas as well as to the State Government agencies.
We would expect to activate our pre-paid wireless data services before the end of this week as part of a range of initiatives we will be taking to quadruple our wireless data sales over the coming three month. I was told last night that the samples of the low cost Yagi aerials have finally been delivered by the manufacturer and are being air freighted to us today. If those units prove to be suitable they will assist our country agents offer HSPA in more locations and at a lower cost than is possible today - especially if we can finally find the 'magic box'.
We have also begun to make improvements to our mobile offerings and will come up with more attractive mobile plans as well as more attractive 'bundles' than we have previously been able to offer based on some better pricing we have been 'offered'. Our mobile business has never developed as we had originally hoped it would have but it has continued to grow slowly since we sold our first service. One day we will find a way of making it a more compelling offering and we will make much more effort to do that now.
So, new quarter - new enthusiasm for making the most of the opportunities that bad times throw up along with the more noticeable 'challenges' and 'disasters'.