John Linton
.....even if it only 5.45 am on the first day.
Recurrent billing charges for October were a new record, by a long way, (mainly because of the additional 'account management charges') but also because of very strong growth in business services and, especially, VoIP services. Residential ADSL service billing fell fractionally due to the activities of Telstra which have meant that we have had to 'improve' the value of our plans by increasing data allowances substantially and therefore reducing excess user charges quite substantially - if that is taken out of the 'equation' then the number of residential ADSL users increased fractionally. It could have been better, I suppose, but then again it could have been a great deal worse. However the 'sobering' fact is that growth over October last year has fallen to 13% which while a pretty good figure is well below growth at this time last year.
Revenue is one thing but it is profit that we have needed to address which is why it was really good to see the significant growth in both business and VoIP revenue as it replaces break even/loss making residential ADSL revenue with 30% plus profit making business revenue which month by month will transform the intense financial pressure we have always operated Exetel under to something much more pleasant....at least that has been the plan for the past two years. Not that I'm complaining about the onerous situation of providing residential revenue at the lowest possible cost to the end user - that has always been our intention and the reason we started Exetel in the first place. I think, for a significant section of the marketplace we still offer, by far, the best residential ADSL service at the best price - but Telstra have demonstrated that by bundling several services they have, finally, been able to at least appear to offer a better price despite their very poor general customer service....and the realities that the apparent price of ADSL is being used to cover the old Telstra's rip off pricing of mobile, land line rental and wire line call charges.
We had a meeting with one of our major suppliers yesterday about how they may be able to assist us in these difficult times, both for them and us, and we spent some time looking at how the marketplaces were being affected by the 'NBN2', Telstra's reactions to whatever that might be and in turn other providers reactions to Telstra's reactions....and then...... all pretty pointless and somewhat Byzantine. However it served to underscore the pretty obvious fact that, at the moment at least, very few if anyone seems to have any really good ideas of how to deal with the increasing pressure of the looming 'NBN2' and so many companies are signaling that fact with increasing bizarre 'initiatives'. (How many customers have actually signed up to a "Terabyte plan" do you think?). Although at least two of our major suppliers revenues are "flat" - a euphemism for well below planned targets - and in that context a 13% growth is something to be happy about if you don't look too closely at what you have to do to maintain revenue growth (sacrifice all of your small profit and provide more for less in almost every aspect of your 'product portfolio which drives up future costs instead of driving them down).
So we start the brand new month/new quarter on an optimistic note but are not fooled by the simple numbers shown in the recurrent billing report. This will be a tougher month than any of the last three because of the increasing 'panicky looking' actions of so many providers to the market places in which Exetel operates. We have not yet been able to 'negotiate' acceptable wireless broadband ricing that will allow us to build that part of our business and while we may have found a sensible mobile bundling 'solution' the time it takes for our provider to actually put that in place in their billing system means we will waste the whole of October while that happens. I have never come across such a cumbersome process. What will happen in October? I certainly don't know and it is an eerie feeling for a person who has always had, demonstrably, a pretty good understanding of how the various markets operate on a 12 - 18 month 'horizon' to be in a position of not knowing what will happen 30 days ahead.
It seems to be a not uncommonly held feeling though.
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