Saturday, August 2. 2008First Month Of The New Financial Year Ends.......John Linton .....record results in all parts of Exetel's business. We arrived in Bangkok late yesterday afternoon and caught up with the news, Exetel and otherwise in Australia, when we checked in to our hotel. Despite all the negative financial news that saturates the world financial press the end of month reports for Exetel showed a uniform set of rcord breaking results and the August 1st billing run (recurrent revenue) also set a new record (after allowing for the addition of the change in billing date for some telephone services). ADSL2 services showed particularly strong growth in July but then so did ADSL1 with all other services also growing strongly in terms of increased new monthly orders that are subsequently reflected in increased monthly recurrent revenues.While I am, of course, very pleased that the first month of the new planning year has been on or above the planned targets I found it a little disconcerting that it would be so strong when all indications are that it shouldn't have been. Having been away from Australia for almost the whole of July I can have no first hand 'sensing' of what happened. My first thought is that because of the widespread coverage of various views on the Labor NBN 'tender' more interest was generated in broad band than would have otherwise been the case - even the most non-technical of publications seemed to print articles and comments and I can only suppose that might well have been the case on TV and radio. Anyway - whatever happened in July is now in the past and it's a new month with new challenges and 'strategies'. I thought about how to address the new/dial up changer/low usage customer needs during the flight from Heathrow to Bangkok and the subsequent long night of jet lag readjustment that followed. I think that it would be possible to offer a 'free' broadband service by bundling it (a la UK style) with a telephone line rental service. Something like: FREE ADSL2 When You Use Exetel As Your Telephone Service Provider with the telephone line rental of around $32.95 (or a figure that matches one of Telstra's line rental plans) and call costs at 10% less than Telstra's call charges. From what I can see, from a long way away, the combined line rental and profit from the calls would cover the cost of the ADSL2 monthly port rental plus a charge of, say, $A15.00 per gb would make the plan profitable under most circumstances. It's only a first 'cut' but it does seem to work financially and it seems to be the preferred method in the UK for 'marketing'. I'm sure with a lot more thought it could be made much more attractive than my simple words used here portray and, unless anything has changed in the past 4,000 or so, years "FREE" is still the most powerful word in sales and marketing. Such a plan couldn't include the 48 gb of included off peak downloads or any of the other inclusions in the current Exetel ADSL2 plans but then someone switching from dial up doesn't use those things at the moment so they wouldn't miss them. I would think that someone who most likely, at least in their early months, would seldom use more than 500 or so mbytes of downloads would be very happy to get the speed of ADSL2 in their area for around $A10.00 a month in usage charges with no other monthly plan charge. Even at 2 gb they are still paying only $A30.00 a month which is a very low cost ADSL2 plan. I think it would be possible to offer a zero cost 'activation charge' on such a plan and even a zero cost ADSL2 modem for an 18 month contract and, once again, that is a pretty 'universal' requirement for customers who want zero cost hardware and activations of either broad band or other types of communications services. My thinking in giving away the hardware is that if such a plan was successful then it would significantly accelerate Exetel achieving the next 'volume break' lower pricing on ADSL2 services which would provide the 'funding' for the hardware giveaway. If the plan isn't popular then we wouldn't be giving away very much so it wouldn't matter. I've never put any effort in to marketing any of Exetel's services - relying purely on price/performance to deliver the 'message'. However time moves on and Exetel's current users, even long term ones, have changing needs which we need to address with a different service 'line up'. - assuming that's possible of course. So, with a bit of work, and some supplier accommodations, it may be possibleto offer a 'free' ADSL2 service to current dial up customers to address that market in a much better way than we have been able to do to date. Trackbacks
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ADSL2 is just a term that means very little to those that live outside of a major residential area.
Everything seems directed towards ADSL2 nowdays and unfortunately the only supplier of ADSL2 in our area is Telstra, who wont allow wholesale of the product. I have genuinely become tired of waiting for it to be offered by suppliers other than Telsta and am now a prime candidate to take the next good deal offered --- be it 3G / Telstra Adsl2 / or anything else. Ive got though the phase of downloading everything I can on ADSL and just want a reliable High speed connection that offers 15GB pm . I think Im falling out of Exetels user demographics. minimum 8Gbit speeds 15GB pm and $50 per month. I have had a great time with Exetel but the 12GB Telstra ADSL2 at half price for 12months is now begining to temp me. John have you got anything up your sleeve that may interest me. cheers Comments (2)
Something tells me I said 8Gbit speeds needed in my previous post --- should have been 8Mbits speed -- im tired - Australia lost the Rugby against NZ - Im just not thinking straight -- cheers.
Comments (2)
An 8 gbps service can be via Telstra or Optus (where they have exchanges).
Telstra's wholesale price of 8 gbps (at least at the time I left Australia) would make it impossible to offer a $A50 8 mbps service. A $A50 8 mbps+ service via Optus is already available and the number of exchanges serviced by Optus exchanges will continue to increase (now around 420 from memory). I think HSPA will provide in excess of 8 mbps by early next year - but it will depend on the location. Downloads on HSPA will not be economical above 6 gb for some time but that's only a guess on my part based on the knowledge I have gained to date. I'd hate to lose you as a customer but I fully understand the attraction of the Telstra ofering. Comments (6)
I found it a little disconcerting that it wouldbe so strong when all indications are that it shouldn't have been.
But that's exactly where you're wrong. I've said it before, and I'll say it again... when times get tough, people don't want to give up the things they like, they just seek to get them cheaper. Exetel is ideally placed (as the best value ISP in Australia IMO) to take advantage of this situation, so it's only natural as far as I'm concerned that your signups would be running at record levels. Comment (1)
I would like to think that you're correct - it would be very nice.
Comments (6)
The word "Free" is a very powerful marketing tool, but you need to make sure you don't go deceiving anyone. If you are doing a 0GB plan with $15/GB charge then in truth the plan isn't free because as soon as you switch on the modem you pay $15. If I was to design the plan I would include 500MB of quota and charge 2c/(*M*)B with a price cap of $40 to $60 where when they hit it they will be shaped for the rest of month so there are no nasty surprises. I would also do a 2GB plan for $15 or so with a price cap too. On the phone plan, if you are increasing the STD rate by much, I would put a cap on it like nearly all the other telecommunication companies do, like $3 for up to 1hr.
Comments (3)
I'm quite happy with the Exetel pricing, when it comes to ADSL1, all major ISP's provide not much quota at a high price due to Telstra's costs of wholesale. Exetel have the bonus 48GB offpeak where others don't. But I reckon if you rewrite the 48GB to 52GB it will look a lot larger and attractive to the eye.
Comment (1)
That's some great thinking there, although Dodo have already launched the "FREE ADSL2+" concept.
http://www.dodo.com.au/broadband/ $29.99 line rental, 150MB downloads, 'FREE' ADSL2+ , although at 18c per mb for excess downloads u appear to have the better offer. Comment (1)
As I said in the previous comments I thought DODO had already used the 'free' concept but I couldn't remember the details (and was too lazy to look it up).
It will take some more consideration to arrive at either a decision or a final plan composition if a decision is made to do this. By the way 18 cents a ab is $180 per gb Comments (6)
Hmm.. another idea perhaps.. Instead of doing the bare $33 line rental you do an AAPT and give a couple of "cap plan" options. That way you can guarantee that there will be a minimum spend on the landline and hence a profit.
Comments (3)
This sort of plan would appeal to people like my mum. She is on ADSL1 256k with Exetel @ $30/month and pays $30 line rental to Telstra. Her usage is rarely over 500mb.
Comment (1)
I think there are a huge number of bradband users like your mum.
Comments (6)
Yeah, like my mum. Sadly only Telstra covers her exchange. I think Optus will be upgrading her area to 3G though so I will move her to your HSPA plan most likely when the time comes.
Comments (3)
Looks like you're thinking of going the Dodo way similar to what I suggested in your last post.
Comment (1)
It would appear so - however the thought of doing anything resembling what DODO does is a bit of a problem - to me - at least.
Comments (6)
A month or two ago... weren't you suggesting that you might not even offer ADSL2 anymore because of so many backhaul issues etc and now you're thinking of giving it away for free? Or do I have my wires crossed somewhere?
Comment (1)
You're quite right - the back haul problems that kept appearing in different exchanges were driving us to distraction (as well as seriously annoying the end users affected).
Over the past three months (and I don't know what you personally have noticed) the issues have dwindled to the point where they are no worse on Optus back hauls than on any other carrier's - sure they haven't been eliminated 100% but they are of lesser intensity and of much shorter duration. Partly this is due to the 'maturity' of the whole network structure and partly, I'm guessing, its due to economy of scale where the parts of the network 'cheapskated' by Optus have been upgraded to realistic proportions. Comments (6)
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