Exetel chief John Linton has predicted a “negative nightmare” ahead of Telstra’s December half-year results announcement.
According to Linton, the results are expected to be so dire as to leave Telstra chief executive, David Thodey, struggling to find the silver lining in the telco’s Cloud.
“It will be interesting to see what Telstra's CEO is able to say about them that is even vaguely positive - other than we spent hundreds of millions of dollars reducing our top and bottom lines and all we have to show for it is that we've got more support and network costs to provide for the customers we 'won back',” Linton wrote in a blog post.
According to Linton Telstra had attracted some 600,000 plus residential ADSL customers from rivals, including 10,000 from Exetel itself, but the gain was a Pyrrhic victory and will ultimately be short-lived, he argued.
“Losing customers is always a bad thing but when the largest provider in any supply chain spends an amount of money greater than all of its competitor's (bar one or two) gross annual revenue to attack their customer bases then its an inevitable result,” Linton wrote.
“What is much, much worse for companies like Internode et alia is that they have charged such a heavy premium for their ADSL and other services for so many years that they have become fat, dumb and careless enough to allow their overheads to build too much and as they lose customers there is the double negative of losing the ability to cover the cost of all that 'fat'.”
Linton also used the post to take a swipe at rival ISP Internode’s recent price increases.
“Internode's ‘announcement’ of ‘more value’ is simply the desperation of a bunch of 'accountants' who say 'we need more money to pay the bills but you can't incur any more cost' so the 'marketing people' find something(s) that cost nothing and try and charge the dumber customers for it by pretending it's got some value,” the post reads.
“You will see similar attempts by more and more suppliers in the not very distant future. It is part of the ever encroaching dishonesty in the selling of communication services to residential users that was always a problem but, thanks to Telstra's efforts over the past two years, has become endemic.”
In December the Telecommunications Industry Ombudsman (TIO) was the target of the outspoken ISP chief. In a customer communiqué Linton detailed why Exetel had decided to sue the TIO, a government agency it described as a “rogue organization".
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