John Linton ....we resigned a contract with Telstra Wholesale that committed the company to growing the number of ADSL services it buys from Telstra Wholesale while also agreeing to now sell Telstra PSTN services and also selling Telstra's EOC services.It is the first major decision made by Exetel's new Sales Director and certainly one that would not have been made without his different views of the 2011 marketplaces in which Exetel operates. If I had still been making those sorts of decisions I don't think I would have done that but then that was the reason we hired someone with completely different views. So a very positive, and early, achievement for Glenn that opens up new directions for Exetel.
It will be a big benefit in many ways. The obvious ones being allowing us to offer 'one bill' to that percentage of the market that considers it be beneficial, getting lower prices for ADSL2 services and the main benefit of being able to offer EOC solutions to a much larger number of businesses....admittedly at higher prices than we do at the moment but then we can offer nothing in those areas at the moment. It means we have to re-think our long established relationships with other providers over the coming months. Nothing changes today but the future is as uncertain as ever...at least it is to me.
We need to find a new 'direction' for our residential efforts and begun that process in January by starting to move the 'target demographic' (via plan changes) more sharply than we have ever done in the past. We have yet to complete the discussions with Optus on just how we can build our business volumes with them and while we have made some progress we have not reached any agreements on the key part of those discussions which is how to provide wireless broadband services to a much larger number of customers. This is quite important to the overall residential planning as it seems more probable than ever that a larger percentage of lower download users (sub 10 gb per month) will opt out of the PSTN/ADSL offerings and replace them with wireless broadband and mobile/voip telephony. We also need to find a way of offering mobile services at sensible costs to corporate users but that, if anything, is proving even more difficult. We will aim to resolve those issues by mid-March which may prove optimistic despite having an original time frame of December 31 2010.....hope springs eternal.
We also need to work with our other major provider, AAPT, to determine what can be done over the coming months to mutually improve our businesses. Currently our main expenditure with them is on ADSL2 ports and back haul which is very cost effective but confined to a very limited number of exchanges which are heavily provisioned by all other ISPs with their own DSLAMs. Our other major buying is EOC services for which they are our preferred and largest supplier because they were early to market and have far more cost/effective offerings than Optus and now Telstra. We have effectively built our EOC business based on AAPT services and expect to continue to do that wherever they have coverage. A difficult scenario and quite a challenge to be resolved over the coming weeks.
So it will be an interesting few weeks while we settle the IP and back haul contracts and make the various marketing decisions those final contracts will allow us to make. I am very happy to play no part in those processes for the first time since we commenced in business.
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