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Speaking out: Exetel's view of telco issues

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.
Written by Josh Taylor, Contributor

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."

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