Speaking out: Exetel's view of telco issues

Speaking out: Exetel's view of telco issues

Summary: To describe Exetel chief John Linton as outspoken in the telecommunications industry would be an understatement. The chief of the telco that boasts 125,000 customers and 100 employees based in Australia and Sri Lanka was against the NBN even before it was cool.

TOPICS: Telcos

profile To describe Exetel chief John Linton as outspoken in the telecommunications industry would be an understatement. The chief of the telco that boasts 125,000 customers and 100 employees based in Australia and Sri Lanka was against the NBN even before it was cool.

Western Ground Parrot

(Western Ground Parrot WA image by Brent Barrett, CC BY-SA 2.0)

In 2009, contrary to the views of many of his contemporaries in the industry, and before the rise of splinter groups opposed to the project such as the Alliance for Affordable Broadband, Linton told ZDNet Australia that the project was a "political stunt", a "promise based on nothing" and a project that could only be achieved by Telstra. He said that no Australians needed a 100-megabit per second connection and that the project was devised "on the fly". The release of the business case for the NBN late last year didn't change that view.

"I thought Exetel had sub-standard business plans," Linton wrote on his blog after the release. "But ours are an economic work of art compared to the drivel released yesterday purporting to be the 'NBN2' business plan for the next nine plus years."

"As a 'business' document it lacked any credibility to any sensible investor — but then the investors, you and I and every other tax payer, were never consulted before this Krudd failure attempted cover up was foisted on us," he said.

Linton told ZDNet Australia that Independent MPs Tony Windsor and Rob Oakeshott were "pork barrelling" when they sided with Labor to form government on the back of the NBN.

"It will be just another waste of taxes — too late to prevent that happening now," he said. "There is no justification — it was, and remains, [Former Prime Minister Kevin] Rudd's legacy to his overarching ego that he was an unbelievably pig ignorant man that had tried to win an election making stupid promises and a refusal to face the reality that he was catastrophically wrong."

But that didn't mean that he was impressed with the job that the new Shadow Communications Minister Malcolm Turnbull had been doing since taking the reins after the election.

"He is trying to use logic against stupidity and political self-interest with the inevitable results," Linton said.

Despite Linton's personal opposition to the project, Exetel has been one of the first companies to offer services on the NBN in Tasmania. However, Linton said uptake of the services so far had been "very poor".

"But then there is a very low number of potential buyers in the only area where there is coverage," he said.

Linton also doesn't think the NBN will reduce the number of players in the market in 2011, and despite a number of industry takeovers in recent times from iiNet and TPG, Linton said he couldn't see any "obvious changes" to the industry in the near future.

Telco legislation reform is another change that has recently come to the industry, with the Australian Competition and Consumer Commission being handed new powers at the end of last year.

Linton said this could "only help", but said that the commission's recent litigation against telcos such as TPG and Optus over claims of false advertising was not a good use of its time. He also said the best regulation the government could bring to the industry would be to "prevent itself from any involvement in telecommunications in Australia".

On his blog, Linton also went after customers who complained to the Telecommunications Industry Ombudsman (TIO).

"It is depressing because it demonstrates how far Australian society has fallen in terms of ethics and morality and even good manners and literacy," he wrote. "If a customer TIO complaint is an accurate reflection on Australian society in general then amorality is pandemic and education standards are non-existent."

He said the decision to move the complaints handling to the Exetel office in Sri Lanka had been a success as there had been a steady decline in complaints about his business to the TIO.

Yet keeping customers happy can sometimes be a fine balance.

When iiNet took over AAPT last year, the company axed AAPT's unlimited downloads plan. Some users were upset, but CEO Michael Malone defended the move, saying that unlimited plans led to "leechers". Exetel itself doesn't offer unlimited plans (its biggest plan is for 500GB per month), but Linton said that customer downloads had little effect on the overall profit of a business.

"ISPs set their pricing according to their customer's perception of value versus the offers of their competitors. It is irrelevant what the customers download," he said. "The ISPs charge according to that quantum."

He expanded on this point in a recent blog post, stating that the cost to provide services to customers had dropped substantially enough in the last five years to make up for any increases in customer downloads, which weren't all that substantial in any event.

"Over 40 per cent of our current customers still download less than 3GB per month. Two customers download more than 400GB per month, less than 200 download more than 200GB a month and the others scale down rapidly from there to a point that over 75 per cent of customers download less than 15GB per month," he said. "Yet today our lowest included GB plan is 30GB.

That could change, of course, but Linton's strongest thoughts of the future revolve around the environment.

While Linton said the focus of the business in 2011 will be on Exetel's corporate and business customers, he also remains passionate about the environment. Exetel donates $10,000 per month to a conservation group looking to protect the endangered western ground parrot. He encouraged other businesses to ramp up their efforts in conservation.

"I would like to see every business in Australia contribute 1 per cent of their profits to local environment and species protection. That they select and remain involved with," he said. "Then there would be no environmental issues in this country."

Topic: Telcos


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • I find Linton's comments towards customers using the TIO extraordinary.

    Having managed and operated the customer service side of a small business market focussed ASX-listed telco for a number of years, I would have taken any referral to the TIO as a failure on our part.

    Whether or not the problem the customer has referred to the TIO is real, exaggerated or imagined, it is a failure of customer service staff that the customer feels that the telco cannot handle their concerns without outside influence. We never had a single TIO referral against us in my time.

    It's great that his TIO referrals are dropping, but ANY at all is a reflection on customer service people who cannot generate a confidence in their customers that their problems are being addressed.
  • Yes Mr Linton has always been vocal in his critiques of one and all but defensive (to say the least) about any criticism's of his business. It must be a terrible burden to be right all the time and then to deal with us the poor uneducated unwashed. Perhaps the next time someone could ask him why he set up a retail business when he clearly dislikes dealing with people he should have been a minister with a god complex like that!
    • Well thanks Ozboy for correctly stating the fact; "Perhaps the next time someone could ask him why he set up a retail business when he clearly dislikes dealing with people he should have been a minister with a god complex like that!". Just by chance I received an email from the Great One - it seems clear there is no appreciation of what Customer Service is about and thank God CS responsibility has been allocated to others.
  • The TOI is a freaking horrible/pathetic system in regards to resolving issues with complaints for telecommunications companies. If a company receives a TOI complaint, they have to pay money, regardless if it was their fault, or even if they were involved.

    No one should be defending TOI, it assumes every company is guilty until proven innocent, and proving innocent means escalating the case to a higher level, costing thousands of dollars per case
  • Mr Linton thrives on being seen as controversial. So let's just say he's right that the TIO is wasting its time by handling false advertising complaints against telcos, and that the five-year effort by the Howard and Rudd governments to design a workable universal broadband service to all Australians means the NBN Mark II was thrown together "on the fly". If we agree with him, maybe he'll go away, though as ozboy said, it is fun watching his Basil Fawlty approach to business.
  • He is worried and it shows. Of course telcos would be against one of the largest infrastructure projects in Australia. They would lose the ability to charge as much as they like. Look at UK's broadband plans on fibre. They are ridiculously cheap. With NBN, the prices will come down over time. Telcos and ISPs don't want that. They want to control and keep high prices and give "500MB *unlimited* plans" for the next 10 years.

    Mind you, for the general public who are happily conned by these guys or just downloading emails it OK. But we are trying to think further than that. We are looking at innovation and technology which Australia is already lagging behind.

    You have to love Australia though. Australians whine when the government wants to spend money. They whine when they pay more tax. They whine when the government doesn't spend. Then they whine even more when a private company spends its money building infrastructure the government should and charges ridiculously high fees. A nation of whiners we are.

    Maybe if Australia turned back to the 1800's and not spent money of anything, then most people would be happy. Shock! Horror! Please no infrastructure! We're Australians!
    Azizi Khan
  • John,

    Good to hear something sane. To talk about the facts, rather than some "futurist" or "dreamers" point of view. Everyone in the whole industry can see it as a dog (the NBN). Old saying, "looks like, tastes like it and smells like it, then it probable is it".

    But hold on now, a pathetic 7% return is "really good" to them, when current interest rates on a saving account is abou the same (so why risk it in a high risk project).

    Then a whole monopolistic provider is "good for the industry", even though it takes us 20 years back when Telstra was the monopoly and prices were high (which is a fact about monpolies and will be with the NBN, even though the prices of the current form are ridiculous).

    But now they cannot argue with the facts, comes the analogues of "unforeseen benefits" including health, high speed and comparison to electricity and snowy hydro project (which is pathetic, as broadband is existing).

    We can only hope, that someone with common sense can not only blow this project out of the water, but govern this God foresaken country run by lunatics.
  • I'm sure that if Linton is still alive when singularity gets here that our new computer overlords will permanently delete him.

    I have worked for a fairly sizable and well known ISP and can testify that the TIO are a bunch of 'n00bs'. They have no idea about how anything works in the telecommunications industry and will always side with the customer even if the customer is at fault. Some customers know this and just go straight to the TIO for the most trivial reasons.

    And the whole taking Optus to court over false advertising thing was total BS, it was all about shaping the customer once they went over their limit which is standard practice in the industry.
  • what be this TOI of which you speak?
  • Well after 6 weeks trying to get my mobile phone fixed and being left a a 5 year old loan phone that can barely use the internet, all the while still being charged for both I went to the TIO (or TOI if you like). I had wasted 6 weeks of my life plus 30 hours in phone calls to complaint departments and trips to Telstra stores and still got no where.

    What do you expect customers to do when they are given the run around for nearly 2 months?
  • It is false advertising though. You can't say something is unlimited and then limit (but call it shape) them.
  • That's just simply incorrect, and you clearly do not understand how the TIO complaints mechanism works. Just so you know (the procedures have also changed recently to limit spurious use of the TIO):

    If you are having an issue you with your provider, and you are unable to resolve it to YOUR satisfaction, after exhausting all avenues with the provider - (and the TIO will remind you that you must take reasonable steps to resolve it with your provider FIRST) - you may lodge a TIO case.

    The TIO representative will determine if your case has reasonable grounds for an escalation via the TIO. If so, they will pass the information onto the high level complaints department within your carrier, who will contact you directly - they do not give you a number to call anymore (to prevent the number being posted online).

    They then have TEN working days to resolve the issue to YOUR satisfaction, after which time the TIO may choose to levy a fine upon the carrier. It is therefore in the carriers best interest to resolve the issue within this ten working day period.

    The TIO is a consumer protection mechanism. Any carrier should target no TIO case escalations, because this says they are doing customer service RIGHT.
  • I'm sorry, John who? Exetel? Am I missing something here? Oh that's right he runs a mediocre going nowhere business which has a whopping 125,000 customers Australia wide.

    John is only speaking out as he will be directly affected by the NBN and he is trying to pour cold water onto a hot infrastructure project like the NBN.

    Good luck John, maybe you could convince your massive market share to boycott the NBN and stick with you and ADSL. Oops, that's right, Telstra is decommissioning their coper network in order to resell the NBN, maybe your wireless plans will be able to satisy your massive market share's growing demand for Internet access.
  • Theguy...LOL...!

    Very funny, you obviously jest and are taking the **ss!
  • "I thought Exetel had sub-standard business plans,"Says enough donsn't it.
  • Mr Linton talks about the "depressing" decline in "good manners". Maybe he should have a look at some of the correspondence his so-called complaint handlers send out to customers and the TIO.
  • Exetel isn't one of the "big 4.5", but 125,000 customers is 2/3rds the size of Internode and they would certainly be inside the top 10. $5 million per month in revenue is nothing to be sneezed at, especially for one of the lowest cost ISPs on the market (this reducing the actual revenue dollars compared to their competitors).

    Certainly not a "minor player" and far from "a mediocre going nowhere business".

    Sour grapes from a minor competitor maybe?