Tag: telstra

The broadband explosion

For a typical exciting Sunday afternoon, I’ve been trolling through the Telstra annual report.

One statistic that leaps out at me is the growth in consumer broadband subscribers of nearly 60%, even if we assume all the 373,000 customers who ditched their dial up plans went over to broadband, that’s still a whopping 35% growth in customers.

According to the Australian Bureau of Statistics, the nine month growth in consumer broadband connections from June 2006 to March 2007 (not quite the same period) was 46%.

The decline in dial up connection was 26% over the nine months, as opposed to Telstra’s decline of 36.3% over the twelve months.

Interestingly, Telstra’s dial up decline would have been greater if their systems allow customers to transfer their existing dial up email address to broadband. As it stands, they have to retain their dial up account and we steer customers to Bigpond’s Casual User Plan as a cheap way of doing this.

So Telstra’s performance isn’t out of the line with the industry. What it does show is the massive take up of broadband. It’s also profitable, as Telstra’s report also shows their income has grown by over 66%.

Over the next few weeks I’ll have a look at how other providers are doing. It will be interesting to see how others are performing.

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Commander takeover

The failure of a communications company is due to weak management.

The saga of Commander’s slow demise raises some questions about the ability of Australia’s technology companies to meet the needs of the small to medium sized business market.

Commander, or Plestel as they were previously known as, were the monopoly provider of small business telephone systems prior to deregulation. At the time of being spun off from Telstra they had a marvellous position in the market.

For most small businesses, the term “Commander System” was synonymous with small business telephones and PABX systems and they had a ready made customer base of over 100,000 small businesses.

You’d think with hundreds of thousands of customers, an incumbent position and such a level of name recognition, it would be impossible to mess up a business like this.

Somehow, through a combination of overcharging and poor service, Commander’s management blew it. In the last nine years their customers have fled to other providers.

This year the share price has fallen from over $2.00 to around 40 cents. The 42c closing share price last Friday was half their issue price when they were floated in December 2000.

The final humiliation was their 18 day suspension from the stock exchange due to the auditors not being prepared to sign off the annual report.

So it’s funny we now see Australian IT reporting AAPT and Optus are looking at buying the company. The rationale being that Optus and AAPT have failed to get into the SMB market.

Commander failed because management didn’t understand the small business market and the economics of selling to the sector. Optus and AAPT have continually struggled with exactly the same issues.

So it’s hard to see how Optus or AAPT buying Commander could add anything to either company’s expertise (0r lack of it) in this field.

The other prospective buyers of Commander are various private equity groups. AVCAL, the Australian Private Equity & Venture Capital Association Limited, cite Commander as one of their success stories.

One hopes the next owner of Commander’s going to give AVCAL a real success story to crow about.

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