news The long-time leader of Research in Motion’s Australian division, Adele Beachley, has quit her post, leaving the company she has spent a decade at, as it continues to flounder in a market increasingly dominated by competing platforms from Apple and Google.

In a statement this afternoon, RIM confirmed Beachley’s departure, after the story was initially broken by another local media outlet. “Adele Beachley has resigned as Managing Director for Australia and New Zealand, Research In Motion (RIM) in order to pursue other interests,” the company said. “Adele was one of RIM’s first employees in the Asia Pacific region and played a leadership role in growing RIM’s carrier footprint across the Asia Pacific, Middle East, and Africa. RIM appreciates Adele’s past contributions and wishes her all the best in her future endeavours.”

It did not clarify who would fill Beachley’s shoes, but ZDNet.com.au quoted the company as stating that RIM’s senior vice president of its Asia-Pacific region, Urpo Karjalainen, would hold the position on an interim basis.

Beachley has been with RIM for a decade, after joining the company in 2002, at a time shortly after the company’s flagship BlackBerry handset had been first introduced into the market, and as the company was attempting to push the devices and their associated back-office infrastructure into the Australian and wider Asia-Pacific market. Prior to that point, Beachley had worked in a number of other roles in Europe and the Asia-Pacific region. A biography of the executive available online states that she is fluent in five languages.

In the mid-years of the past decade, RIM had achieved a strong position in Australia’s mobile phone market and corporate sphere, with its devices used by virtually every major corporation. However, over the past several years, since the introduction of the iPhone and similar Android handsets, RIM has seen a speedy decline in customer interest in its devices.

The company continues to have a strong fanbase in Australia, which closely examines the launch of any new BlackBerry handsets locally, but RIM’s launch of its PlayBook tablet locally last year appeared to be virtually ignored by Australian customers, who have instead preferred Apple’s iPad. The tablet was speedily discounted internationally, and has been bundled for free in Australia with BlackBerry handsets.

The last time RIM filed a financial report on its Australian operations with the Australian Securities and Investments division (for the year ended 26 February 2011), it had some 59 employees in Australia.

At that time, it did not disclose much in the way of Australian revenues — just $33 million, up from $23 million the year previously. It appears that this revenue referred to services being provided by RIM to its various corporate clients in Australia, rather than sales of its actual handsets locally. It appears that RIM’s handsets are, for tax reasons, bought from its global parent by local telcos and corporate customers, rather than from RIM directly.

“The principal activities of the company consist of providing support services, sales support services and technical assistance to various telecom carriers and their customers as it pertains to a wireless electronic data solution,” the company wrote in its financial statements. In that financial year, RIM paid just $704,844 in Australian income tax expense, despite the much larger revenues it is expected to have made from sales of its handsets in Australia. Beachley is listed as a key executive at RIM in the report.

opinion/analysis
I don’t think Beachley’s departure from RIM Australia has much to do with the company’s wider problems; if anything, given that the executive is a long-time RIM staffer, I would have expected her to remain around longer to try to help see the company through its current poor patch. And certainly nobody wants to be the managing director who deserts a company when it needs it most. Instead, it seems like the executive’s resignation might be for personal reasons.

However, I do hope that a new Australian managing director for RIM means a slightly different approach. Under Beachley’s leadership, RIM has been a very closed shop, releasing only very limited details to customers and journalists about its plans and declining most requests for further information. I can’t remember, for example, whether Beachley has given any comprehensive interviews about RIM Australia in the past few years. In contrast, some of its rivals — notably HTC and Samsung — have been much more open and friendly with the press and customers, an approach I always like to see.

Image credit: Still taken from RIM video

blog In well-regarded industry newsletter Communications Day this morning, publisher Grahame Lynch takes a potshot at Delimiter and our audience over recent articles attempting to correct inaccurate statements from the Coalition that broadband prices will rise under the National Broadband Network. He writes:

“In recent weeks Malcolm Turnbull has been engaged in a somewhat unseemly online dispute with an Internet website and its band of pro-NBN followers who are targeting him over what they allege are his inaccurate claims that the NBN will cause broadband prices to rise. They point to the initial round of NBN retail offers, which suggest the opposite.”

The full comments are available online here, buried deep in an otherwise innocuous commentary about Telstra’s half-yearly financial results yesterday. I encourage you to read them in full.

Now, leaving aside the lack of courtesy in not even naming Delimiter (yo, Grahame, what up, my man?), what Lynch goes on to argue is that NBN Co is intentionally keeping its wholesale prices down at the moment to ensure that retail NBN prices aren’t higher than current ADSL or HFC cable broadband pricing. He then goes on to point out that NBN Co’s business plan states that it expects the average revenue per user (ARPU) to eventually rise — from, as Lynch states, $23 in 2013 to $32 in 2015 and $52 by 2020. He writes: “There’s no arguing around it: the only point of an NBN is to provide a faster-than-today service but once you start using it beyond DSL- style speed and download levels you will pay more.”

Now, the first point is one which has been raised on Delimiter by other commenters previously, and you would think it would have some merit. But the difficulty is that NBN Co has committed to the ACCC that it will maintain wholesale prices to a reasonable level over the 30 year period governed by its Special Access Undertaking document. The document plainly states that NBN Co’s basic broadband pricing will remain the same until June 2017, and that after that point, price rises will be limited to half of consumer price index rises in any one year. They also can’t be accumulated over time.

In short, NBN Co has guaranteed long-term, affordable, price stability on its wholesale prices, which will ensure similar stability in the retail market. Lynch has not addressed this issue.

With respect to Lynch’s second comment about ARPU, I am unclear as to why he has included it. What NBN Co is essentially saying in its business case is that it expects consumers to use more and more broadband over the years, buying faster broadband services and consuming more data. This is, of course, true, and it will lead to NBN Co making more money from those consumers.

However, this does not mean that broadband prices in of themselves will consequently rise. It may mean that consumers will sign up to higher value plans. But those plans won’t cost comparatively more than they used to.

There is also evidence that in many cases, consumers won’t actually need to switch to higher value plans. For years, Australian broadband prices haven’t changed substantially. ISPs have not been cutting prices substantially. Instead, as iiNet CEO Michael Malone has pointed out, the focus has shifted to giving customers more value (quota, and extra services such as IP telephony) for the same cost. This has become possible due to factors such as the decreasing cost of international backhaul to Australia, among other factors.

Now, it might be possible for the Coalition to start arguing that new benchmarks will be set under the NBN for what an affordable broadband service might be. In 2012, most people are happy with ADSL2+ speeds (usually up to 16Mbps or so), and a few hundred gigabytes of quota per month. The Coalition could argue that in 2015, a basic broadband service might be faster, say 25Mbps or 50Mbps, with quota of 500GB a month. And that because people are switching to higher value plans to get such services, in real terms, broadband would be more expensive under the NBN.

However, this is not what the Coalition is currently arguing. And in any case, in an age where ISPs like iiNet are offering 100Mbps NBN plans with a terabyte of quota for $99.95 a month (the absolute top end option in a market which starts at a mere $34.95 a month) … I would strongly argue that even this argument wouldn’t hold water. In the NBN age, broadband is going to be highly affordable, as it is now.

Grahame Lynch is a respected telecommunications commentator and a professional colleague of mine with whom I have shared many an ale. But, like other commentators on the issue of NBN pricing, he hasn’t provided enough evidence to make his case that broadband prices will rise under the NBN. And what evidence he has provided is more in the line of speculation about what NBN Co’s business plan might mean in the long-term. Meanwhile, in the real world, ISPs like Exetel are still cutting their NBN prices.

That’s the reality of NBN pricing.

This article is by Sebastien Darchen, a lecturer in planning at the University of Queensland. It first appeared on The Conversation and is re-published here with permission.

analysis For many years, the Australian videogame industry has been trying to carve a niche for itself internationally. There have been moments of success and moments of decline, but the sector’s true potential has never been fulfilled. But could we now be on the verge of a sustainable videogame industry in Australia? It would seem so – and, to be honest, it’s about time.

The nation’s game industry emerged in the late 1980s and experienced significant growth in the next decade-and-a-half, with the establishment of many game development studios. These studios were located mainly in Brisbane and Melbourne. They included (in Brisbane) studios such as Auran (1995), Wildfire Studios (1995), Krome Studios (1999), Pandemic Studios (2000) and Halfbrick Studios. In Melbourne they included Torus Games (1994), Tantalus Interactive (1994), and Blue Tongue (1995).

But the past few years haven’t been great for the industry, with several pioneer studios in Brisbane, Melbourne and Sydney closing their doors. Among these are Pandemic Studios in Brisbane, which closed in 2009, Krome Studios, which closed in 2010, and THQ’s Brisbane and Melbourne studios, which shut down in 2011. There are three main reasons for the downturn in this sector:

• The rise of the Australian dollar
• Tax breaks for game developers overseas (for instance, the Quebec government in Canada subsidises 37.5% of videogame studios’ payrolls)
• The decline of middle-ground games (that is, games that fall between triple-A titles – such as Call of Duty: Modern Warfare 3 – and smaller, independent games, such as Flight Control).

These challenges collide with the fact that, according to the Interactive Games and Entertainment Association’s (IGEA) Digital Australia 2012 report, 92% of Australian households have devices for playing games (compared to 88% last year) and that Australians spent $1.7 billion on videogames in 2010.

But Australia respresents only 2% of the world market, so Australian game companies need to export if they want to survive. One primary concern with the closure of keystone studios in Australia is the fact many professionals, or “talents”, are leaving to find work overseas. All of which raises the big question: where to from here?

If we look at interactive entertainment in Australia in 2006/2007, the industry’s total income was A$136.9m, with A$116.9m (85% of income) coming from the provision of services to other businesses. Of this service income, 93% came from overseas sources. In comparison, the film and television industry relies less on fee-for-service work.

The film and television industry in Australia has experienced more government support than the video game industry because it employs more people: 13,844 people in June 2007 compared with 1,431 workers in video games. (These 1,431 people were spread across 45 game development businesses, located mainly in Queensland and Victoria.) The fact the Australian game industry was mostly relying on international game studios and publishers (which is especially true for Queensland) is one of the main weaknesses of the industry.

Victoria has been the most proactive in supporting the industry and it was the first Australian state to provide government funding for its game industry in 1996. In 2000, it launched Game Plan, a statement of support for the computer game industry, followed by Game Plan: the Next Level in 2001. With the creation of Film Victoria in 2001 – which administers the Digital Media Fund – Victoria has a long tradition of supporting the videogame industry.

Videogame studios have also had support in Queensland, but to a lesser extent than in Victoria. At the national scale, the Game Developers’ Association of Australia (GDAA) has four objectives:

• To promote the growth of the game industry in Australia
• To represent the interests of GDAA members
• To attract capital and publishers from offshore
• To retain and attract talent in our local industry and to promote a sense of community within the industry.

Since 2006/2007, the make-up and focus of the sector has changed. There has been the closure of studios focusing on console games, and the emergence of many independent developers specialising in online games and games for mobile devices.

As one representative responsible for the game industry at Multimedia Victoria told me: “Our strategy is now to encourage local game developers to develop their own IP [Intellectual Property] through the Digital Media Fund. Australia has never been able to deliver a huge triple-A title … our aim is now to nurture the local industry, even though we are still active in trying to attract international video game companies. The objective is to develop a sustainable video game industry”.

The State of Queensland (through the Department of Employment and Economic Development) is also trying to adapt its policies to the recent changes in the industry. A government ICT business advisor told me: “The attraction of large studios won’t be our main focus … we see the mobile [games for mobile devices] as the way forward … we are also starting to look at the Asian market [Korea, China] … why not try to swap IPs from one country to another, take a successful Australian mobile phone game and ‘Koreanise’ it for the Korean market?”

While there are obviously plenty of opportunities to develop a sustainable video game industry in Australia, the key appears to be an ongoing dialogue between industry and policy advisors at a state level, and an association such as the GDAA. The Australian game industry should “play” with its strengths (local talent, proximity to the Asian market, expertise in online gaming and mobile games, competitive university programs in computer programs, etcetera).

It needs to make the move from being a “contender” to being an international hub for the video game industry.

This article was originally published at The Conversation. Read the original article. Image credit: Mykl Roventine, Creative Commons

news Struggling national mobile operator Vodafone this week launched a special offer on prices on its mobile plans for its flagship HTC Sensation XL and Samsung Galaxy S II handsets, with customers now able to pick up the smartphones for just $5 a month on a monthly plan costing $29 or higher.

The plans for the HTC Sensation XL and Samsung Galaxy S II, which earlier cost $10 per month on Vodafone’s capped plans of $49 or below, are now only $5 a month on the $29 Cap plan for 24 months, a saving of $120. In addition, the company has also levied similar price cuts on the cost of the handsets on higher value plans, and also started offering customers two months’ free network access on its high-powered Infinite plans.

The HTC Sensation XL is a music-oriented smartphone that comes with a 4.7” display and 16GB of internal storage. The phone comes with a finely engineered pair of stylish headphones. Running on an Android (2.3.5) and HTC Sense 3.5 graphics combo, it is expected to be upgraded to the Android Icecream sandwich next year. It has a custom music app that allows you to browse music, swipe album art and download album covers, set tracks as ringtones etc. It also comes with the HTC Sync desktop software that allows you to sync with iTunes. It is equipped with a backside-illuminated sensor for the 8.0 megapixel camera, which can be operated in multiple modes.

The Samsung Galaxy S II has a lightweight design with a 4.3” display and runs on the Android 2.3.3 platform. It has a 1.2GHz dual-core Exynos processor that is the fastest in the market. It uses Super AMOLED plus display technology and comes with Wi-Fi, Bluetooth 3.0 and DLNA wireless media streaming capabilities. It has 16GB of internal storage and has options to plug in Micro SD cards and USB flash drives. It also has bonus software like Navigon GPS and hubs for games, social networking, reading and music, Polaris Office and basic photo and video editing apps.

Vodafone was in a rough patch last year when many customers deserted the service provider because of network issues like patchy connections and dropouts that plagued it from the end of 2010 to the early months of 2011. In December 2011, The Australian Communications and Media Authority (ACMA) ordered Vodafone to fix its customer violations to avoid further penalties.

To address customer concerns, Vodafone has implemented many network improvements including new hardware and radio equipment. The company has also invested in customer service adding more than 300 staff for 24X7 support. Whether customers are able get over the past problems of Vodafone and buy the attractively priced contract plans remains to be seen.

opinion/analysis
If you don’t have a high-end smartphone yet, now could be a great time to pick one up. Whether it’s the Samsung Galaxy Nexus, the Galaxy S II, an Apple iPhone 4S or a model from the stellar HTC Sensation line, they’re all going now for fairly good prices, and especially so if you’re willing to put up with Vodafone’s poorer network service compared with a premium telco like Telstra.

On the other hand, the industry is also about to see a bunch of new handsets announced at the Mobile World Congress conference in Barcelona. Some of those handsets may come to Australia sooner rather than later, and may be worth waiting for. And of course, many people expect Apple to release ‘the iPhone 5′, whatever that will be, later this year. But either way, it’s good times for those who love powerful smartphones. And who doesn’t ;)

Image credit: Samsung. Opinion/analysis by Renai LeMay

news Telsyte, the Australian independent technology analyst firm, has released a study showing an increase in the use of subscription TV over broadband, with more than 300,000 Australian households currently accessing an IPTV service. This is equivalent to about one in ten subscription TV services presently provided.

Telsyte estimates that by 2015 more than one third of all subscription TV services will be delivered over broadband. The report calculates that the entire subscription TV industry in Australia generates around $2.7 billion for service providers. The greater part of this revenue is earned by the two largest operators, Foxtel and Austar. Other emerging credible services over broadband, including Telstra’s T-Box and the independent FetchTV service used by iiNet, Internode, Optus and Adam Internet, are supplementing the mature satellite and cable markets.

The study affords an understanding of the consumer and industry trends that are shaping the market, including the impact of the National Broadband Network (NBN). It also provides a forecast of subscription TV and IPTV connections for the major providers through to 2015, current market shares, commentary on major participants, and insights on future developments.

The report found that newer offerings like FetchTV were aligned better to the future needs of consumers. These services blend flexible viewing options for free to air TV with the capability of streaming a range of channels as well as access to extensive libraries of pay-per-view content, including new release movies.

Chris Coughlan, Telsyte’s director of research consulting authored the study, which was based on both interviews with industry executives and a wide-ranging survey of Australian consumers. Another finding from the study was that IPTV offers meet the main objections consumers have to subscription TV as being too highly priced and that ‘free to air is good enough’. Telsyte forecasts an increase in FetchTV’s subscriber volumes through its internet service provider partners, particularly after Optus was added as a reseller.

“Foxtel faces a dilemma as distribution over the NBN requires it to become a retail service provider supplying broadband access, something that its majority shareholder, Telstra, might be reticent to allow,” Coughlan said. It also faces challenges with regard to margin erosion if it follows suit with cut-down offerings, he added.

Image credit: Volker Stock, royalty free

analysis One of Australia’s largest but most secretive IT end user organisations has this week given industry observers a tantalising glimpse of its broad IT strategy, including staff restructuring across the board, back-office systems integrations and offshoring moves.

It’s one of Australia’s largest financial services organisations and investment houses, but to the public — and even many of its own staff — Macquarie Group has always remained something of an enigma.

Those of us who’ve spent any time perusing the pages of the Financial Review or hanging out in the financial district of downtown Sydney will be familiar with the company’s reputation. Courtesy of its private banking operations, the organisation holds the fortunes of many of Australia’s richest individuals. Courtesy of its consultancy division, its hands had been involved in many of the nation’s largest corporate transactions — mergers and acquisitions. And courtesy of its stock exchange trading operations, it’s the first port of call for many Australians who love a punt on the sharemarket.

Perhaps most of all, it’s known for being Australia’s ‘millionaires factory’ — working at Macquarie, for many people, is a quick path to complete financial security.

But not much is known about what actually goes on within Macquarie. The company’s strictly separated divisions are literally separate companies in many cases. Employees are usually sworn to strict codes of secrecy and the group has a troublesome habit of declining press inquiries about its operations.

That aura of mystery extends to its IT operations. Over the past half-decade I’ve tried to interview the group’s long-serving chief information officer Nigel Smyth a number of times, but failed. Macquarie rarely issues any media releases about its IT operations, and I’ve never seen a press release from a vendor touting the company as a customer. Leaks are virtually non-existent.

However, if you peruse the pages of the group’s operational briefing (PDF) this week presented to analysts and investors, for the first time in years, you’ll be able to get a rough outline of what’s going on at Macquarie when it comes to technology. The key sections are those presented by Greg Ward. The executive is labelled in the documents as ‘deputy managing director’ of Macquarie Group itself, but Ward is actually more than that. He’s also chief executive of the Macquarie Bank division and has for many years been the bank’s and wider group’s chief financial officer.

At the moment, if you look through Ward’s presentation, it seems as if the executive is fulfilling more of an operations role for Macquarie. And if you look at Macquarie’s organisational chart, it’s also apparent that he oversees the bank’s technology support division — which the bank’s chief executive Nicholas Moore does not have a straight organisation line to.

Macquarie’s technology support division used to be called its Information Services Division (ISD). However, from Ward’s presentation this week, it seems apparent that the group has followed other major Australian banks and morphed ISD into a merged operations and technology division, representing their increasingly integrated nature.

In Macquarie’s case this division is called ‘Market Operations and Technology’ (MOT), and according to Ward’s presentation, it’s becoming a bit of a beast.

It looks like MOT’s formation dates back to 2010, when separate divisions Macquarie Securities Group and the Fixed Income, Currencies and Commodities group started sharing some back-office systems and data, as the pair moved towards a single view of clients’ financial resources. At that point, it looks as though Macquarie was also trying to consolidate some IT systems. I don’t know precisely what those systems do — but Ward lists them as ‘CONNECT, FIDESSA, Calypso, MTS and market data’.

The next stage took place in April 2010, when other systems and functions were consolidated into a new unit, the Market Operations Division. The driver at that point was to combine overlapping back office functions so Macquarie as a whole could reap efficiency benefits. By this stage, Ward’s presentation notes, the bank had racked up $28 million in savings.

Following that point, in December last year, the IT teams of MSG and FICC were merged, and the group started looking at using “lower cost locations” for some IT work. At another point in the presentation, it’s mentioned that Macquarie is using Manila in the Phillipines for IT development work (which we kind of already knew, due to rumoured job losses at Macquarie last year), although MOT is still quite large — with a combined headcount of some 3,500 staff. In total (across finance, technology, HR and business services), the group has over 1,000 offshore staff.

And the next stage is to leverage the combined MOT team across the other Macquarie divisions — with Macquarie Capital looking to be next, with integration occurring through the 2013 financial year.

So what does all of this mean? To my mind, it represents a fascinating shift in the Macquarie Group mindset.

Previously, it has been my impression that most of the group’s divisions attempted to be quite self-sufficient. This has been useful in maintaining the cut-throat competitive internal culture at the group, as well as maintaining so-called chinese walls between divisions when necessary. You don’t want a division aiding with secret M&A deals to be chatting casually with the staff in your equities trading division, for example.

However, it looks like Macquarie is currently trying to shift its administration footprint into being much more comprehensively cross-division, with IT as a core enabler of that shift. This is likely, of course, to bring the group significant efficiency dividends, as Ward mentions. However, it is also likely to give it a better view of its customers and a much more cohesive dataset about financial movements in Australia as well.

As its momentum in this area gathers pace, I would also expect Macquarie to run into some speed bumps. Because of the highly specialised nature of its business — even more specialised than the operations of major banks like CommBank and NAB, for example — Macquarie is likely to be currently running all kinds of niche financial software applications, and probably even quite a high degree of custom and in-house developed apps.

With several decades of that development work behind it, and with its divisions having previously operated on a more siloed basis, I would guess that integrating some of those IT systems will prove a lot more problematic than Ward would let on publicly. I’m also betting that some of them won’t end up being integrated — but rather just segregated off into convenient virtual containers, to keep running as they are.

One last thing: It’s interesting to see the difference in attitude between Macquarie and some of the other large financial services organisations when it comes to technology. The emphasis for Macquarie right now definitely does not appear to be on using technology to drive positive revenue and customer service outcomes for the group, as it is at CommBank. It appears to be more on the side of gaining efficiency dividends and taking cost out of the business. None of that is to say that positive technology improvement isn’t going on. But it’s not where the overall focus of the group is.

Regardless, as it is in Australia’s other major financial groups, technological change is definitely in the air at Macquarie. It will be fascinating to see what other tidbits of information escape from the mothership over the next year, after the unexpected treasure trove which Ward gave us this week.

Image credit: derivativeofcourse, Creative Commons

news Australian condom and medical protection giant Ansell this week revealed a botched implementation of Oracle’s ERP platform which went live last year had caused US$13 million to US$15 million worth of lost sales.

According to documents released by the company during its regular financial briefing this week, the project was kicked off in 2009, as the company recognised the need to update its business processes and consolidate no less than 25 separate legacy systems into a single global platform. At that time the company chose an ERP platform and a systems integrator. The Financial Review has reported that the platform is Oracle and that IBM is assisting with the integration. The project is named Fusion, which is also the name of Oracle’s unified suite of business applications.

The first phase of the rollout, which would primarily impact its North American operations, went live in July 2011, the company wrote, but ran into “systems design and interface issues”, particularly with relation to its largest (third party) warehouse. Since that time, Ansell has devoted “significant resources” to enhancing the system’s performance, correcting design problems, stabilising the platform and returning it to normality.

“Much progress has been made, but we have lost some customers, incurred extra costs and the global rollout has been delayed,” Ansell wrote this week. “It is hard to quantify the impact of Fusion, but lost sales in [the first financial half] are estimated at US$13 to US$15 million, and excess working capital at US$25 to US$30 million. Lost margins and higher expenses have been partly offset through other initiatives and savings.”

In a separate briefing this week, Ansell chief executive Magnus Nicolin said he expected the remaining ERP issues to be resolved by June.

“We needed an ERP system to improve our processes and efficiently support faster growth,” he added. “We went with a top tier ERP system, hired a top tier systems integrator and invested heavily in design and implementation — so we didn’t expect to run into quite as many issues as we have! However, we’ve spent the last few months working on rectifying these issues and I have no doubt we’ll have a fully functioning ERP system during H2″.

Nicolin added that the company had offset part of the negative earnings impact of the Fusion project through other savings and initiatives. “It’s too early to assess the impact on end benefits because the system isn’t yet fully operational,” he said. “But there’s no reason to believe we can’t deliver, albeit with a delay.” In late 2011, Ansell told shareholders at its annual general meeting that the total cost of Project Fusion had been increased to around $80 million.

opinion/analysis
Ansell’s management appears fairly surprised that it’s been having such extensive problems with its ERP rollout, given it’s got the top players in the field involved and it prepared extensively for the rollout. However, I’m not surprised by the problems.

Complex ERP rollouts such as the one which Ansell is undertaken are commonly the end result of a company which has made a number of acquisitions over a number of years but not comprehensively integrated the IT systems of its targets. This is true of Ansell’s case — the company has constantly acquired other companies over the past thirty years, as its company history makes clear.

At one point in its corporate history, Ansell notes on its web site, it had gone through “a decade of acquisitions worldwide and the establishment of factories in Thailand and Sri Lanka, plus the purchase of factories in the US, UK, Mexico, Germany and France.” And then, since that period in the 1980′s, the company made a substantial acquisition virtually every two years.

Given that the IT industry’s knowledge of how to handle such constant acquisition in terms of a company’s ERP systems has only been coming to a good level over the latter years of that period, it’s no surprise that Ansell has been having problems with its major integration project. 25 ERP systems into one? Well. There’s a disaster waiting to happen.

At this point, no real blame appears to have been apportioned to either IBM or Oracle over this one, and I’m not that surprised by that either. Most likely the problem in this case — as with most botched IT projects — was poor project governance at the customer level, combined with a requirements specification which might not have been ideal. And it’s also likely that to implement the new system, Ansell might have had to change large swathes of its actual business processes — which never helps.

Hopefully the company can get this sorted out over the next year or so. I would envisage that it will take at least two to get it totally bedded down.

news The nation’s largest telco Telstra has continued to blitz rivals Optus and Vodafone in the mobile phone and broadband market, revealing today that it had added 958,000 new customers to its roster over the past six months, in a year in which Vodafone went backward and Optus experienced only modest mobile customer growth.

The 958,000 new customer figure was revealed in Telstra’s financial results briefing this morning for the six months to the end of December last year. Of that number, some 338,000 customers were post-paid mobile customers on plans, with some 436,000 being mobile broadband customers. The results mean that Telstra, at the end of 2011, had a total of 13.1 million mobile customers of various stripes.

As a result of the growth, the telco bolted on an addition $430 million in revenue for that six months compared to the same period 12 month before — representing growth of 10.9 percent, which was the strongest growth the telco had seen in its mobile division in three years. The company makes earnings margins of about 34 percent on its mobiles division.

Telstra’s major rival Optus hasn’t yet disclosed its financial results for the last quarter of 2011; it is due to do so next week. And the nation’s third major mobile carrier Vodaone hasn’t disclosed Australian financial results since August 2011. However, on the basis of the evidence available, it appears as if Telstra is slaughtering both companies when it comes to Australia’s mobile market.

In mid-November last year, Optus revealed that it had added on 131,000 mobile customers in the period, to make a total of 9.23 million. Compared with Telstra’s 10 percent growth over the past six months of last year, Optus only achieved growth of 1 percent in that third quarter of last year. Optus is expected to post better financial results for the final quarter of 2011, due to the Christmas retail period, but if its results continue along the same lines they did in the quarter prior, it will only grow its mobile customers by a quarter to a third as much as Telstra did in the same period.

If its past results are any indication, Vodafone is doing even worse than Optus.

For the six months to the middle of 2011, Vodafone revealed in August, it actually lost some 375,000 mobile customers, with the besieged mobile telco struggling to shake off poor customer sentiment stemming from its disastrous series of network outages in late 2010 and early 2011. Some 110,000 of those lost customers were due to a change in the way Vodafone reports its customer numbers, however.

This morning, Telstra didn’t break out the underlying reasons for the incredible growth it’s seeing in its mobile division.

However, in the final six months of 2011, the telco experienced a number of changes in its mobile network and customer offerings that would be likely to have had an impact. To begin with, the company is believed to have seen very strong demand for Apple’s iPhone 4S handset, which launched in Australia in the period. Apple’s Australian division recently revealed its revenues over 2011 grew a colossal $1.29 billion — to reach a total of $4.88 billion. Much of that growth figure is believed to have come from iPhone 4S sales.

In addition, in that quarter, Telstra launched a number of high-end smartphones based on the Android operating system, from manufacturers such as Samsung and HTC. And in late September it sent the first base stations using the new long-term evolution (LTE) or 4G standard live. The technology allows dramatically increased mobile speeds and is not yet available through Optus or Vodafone. Telstra last month started selling the first handset which can take advantage of the higher speeds, but it has been selling mobile broadband devices to access the network since last year.

Asked this morning how Telstra’s Next G network was coping with the increased load being put on it, Telstra CEO David Thodey said the extra customers were “a lot to cater for”. However, the network had performed “very well”, he said. “There are going to be hotspots in any one period, but we’re pretty quick to fix them up whenever they happen,” he said. “But we’re very happy with the performance.”

Telstra is also experiencing growth in its fixed broadband division, but it’s much slower, with the telco adding on just 106,000 new customers in the saturated broadband market in the period. Several of its other revenue lines — the traditional PSTN telephony area, for example, and its Sensis directories business — experienced sharp downturns.

opinion/analysis
Wow. We are seeing some incredible results coming out of Telstra’s mobile division at the moment. From a bird’s eye point of view, the company looks like it is absolutely slaughtering Vodafone, and doing a pretty good job of wiping the floor with Optus as well.

I don’t have hard data to support this, but if I had to guess, I would say that the vast majority of Vodafone customers who were dissatisfied with the telco’s ‘Vodafail’ moments in 2010 and 2011 ran straight to Telstra, completely ignoring Optus in the process. And why not? If you’re experiencing network problems on your mobile, you don’t want to go to the next player up. You want the problem fixed immediately by migrating to the best telco in the land — and that’s Telstra.

There are two significant things which come to mind after reading these results this morning.

Firstly, the colossal bet which then-Telstra CEO Sol Trujillo placed back in 2005 in completely rebuilding Telstra’s mobile network infrastructure, courtesy of a billion dollar contract with Swedish vendor Ericsson, has paid off in absolute spades. Right now, Telstra owes virtually its entire growth to its mobiles division, and it owes that resurgence completely to Sol Trujillo.
Trujillo might have been one of the most reviled telco CEOs in Australian history, but he also created a huge wave of profit for Telstra. He was worth every penny the telco paid for him — and it paid a lot.

Secondly, Optus chief executive Paul O’Sullivan has a huge amount to answer for here.

Right now, Optus is experiencing growth of something like one (possibly two or three, with the Christmas period?) percent growth in its mobile division. Telstra is experiencing ten. Telstra just bolted on almost a million new Australian mobile customers in six months. In that period, Optus will struggle to bolt on a third that amount — and it might even look a lot more like a quarter.

Optus might call itself Australia’s leading telco challenger brand, but right now that’s nothing more than a bad joke. Telstra is the challenger brand in Australia’s mobile market — it’s challenging the status quo in terms of what we previously thought could be done in the mobile sector, and it’s blitzing Optus and driving Vodafone into the ground in the process.

This should be particularly disturbing for Optus.

As I’ve previously written, Optus has virtually ignored Australia’s fixed broadband market recently, resulting in its lunch being completely eaten over the past five years by the likes of TPG and iiNet, which now have stronger brands than it does in fixed telecommunications. It has done this in order to focus on the more profitable and unregulated mobile sector.

However, now Optus is having its lunch eaten in the mobile market as well. Telstra is making an absolute mockery of Optus in that segment. “Challenger telco”? I think not. Right now, in mobiles, Optus is virtually stuck in neutral.

Image credit: Speedy Gonzales (Warner Bros)

news National broadband provider Exetel has radically slashed the number of National Broadband Network plans it offers customers, as well as cutting prices and limiting the total monthly download quota on any plan to 150GB.

The company first published commercial prices for NBN services in late July last year. At the time, its prices were seen as significantly undercutting the only other major ISP at the time to have released NBN pricing, Internode. Exetel’s prices started at $34.50 a month and topped out at $99.50. At the time, Exetel’s download quota inclusions were pretty small compared to many current ADSL broadband plans — with the company offering only 200GB in total downloads on its top plans.

However, in plan changes quietly released this week, Exetel has cut its prices and available download quotas even further, as well as eliminating a number of plans completely. With its new plan structure, Exetel only offers between one and three options for each of the four tiers of download speeds (12Mbps, 25Mbps, 50Mbps and 100Mbps) which the NBN allows, as well as an additional two plans for a 25Mbps plan with higher upload speeds (10Mbps).

In general, all of the plans have received price cuts. At the low end, the cuts aren’t that significant — taking a 12Mbps 50GB plan from $39.50 a month to $35, for example. However, at Exetel’s top-end, the price cuts are significant. For example, a 100Mbps 150GB plan used to cost $89.50 a month, but will now cost just $60 a month, amounting to a minimum total cost saving of $474 over a year.

However, many customers will not be happy with the total download quotas which Exetel is offering customers. The company previously offered a 200GB download quota on its top plans, but it has simply deleted that tier of its pricing plans, with customers now being offered a maximum of 150GB quota per month. Customers who exceed their quota each month will have their connections shaped to 1Mbps speeds — which can be as slow as 1 percent of their normal speeds, if they’re on a 100Mbps plan. That limit will apply until the customers’ next monthly billing cycle commences.

The limitation comes in stark contrast to plans offered by other ISPs, with Internode, iiNet and Optus all offering terabyte packages and other tiers with multiple hundreds of gigabytes of download quota. It’s common now for ISPs even when it comes to ADSL or HFC cable broadband to offer plans with several hundred gigabytes for prices under $100. iiNet, for example, offers a 100Mbps NBN plan with a download quota of 500GB on- and 500GB off-peak.

It appears as if Exetel may have also recently chopped its normal ADSL broadband offerings, with the company’s site currently listing only two ADSL2+ broadband plans — at $39.50 and $49.50 monthly price points, and with 50GB and 200GB of quota respectively.

opinion/analysis
There are several noteworthy aspects to Exetel’s plan changes unveiled this week.

Firstly, they represent the fact that Exetel has now completely abandoned the heavy downloader market, in both the ADSL and NBN markets. Put simply, no self-respecting geek would settle for a download quota of just 150GB, when they are able to access NBN speeds. For most households of three to four people, and many solo technical individuals or small businesses, signing up for an NBN plan will necessitate a quota of several hundred gigabytes per month.

At the moment, Exetel is offering higher download quotas on its ADSL services than it is on its NBN plans … which is, quite frankly, ludicrous. Australians will download much, much more than they currently are, when they’re switched onto the NBN. I can only imagine that Exetel is trying right now to avoid high-level or even high mid-level customers and go instead for the entry level and low mid-level broadband market. Perhaps it thinks it can make more profits from that market.

Secondly, the plan changes represent the fact that NBN pricing has again become cheaper than it previously was.

Exetel’s NBN price cuts are the second round of NBN price cuts we’ve seen, after Internode chopped its initial commercial prices last year, to bring them more in line with the market. And that’s just within the past few months since commercial services were first launched on the NBN.

Not only does this — yet again — invalidate the Coalition’s argument that broadband prices will be more expensive on the NBN than in the current ADSL broadband market (how many hits can Malcolm Turnbull and his colleagues take on this issue before they admit they’re wrong?), but it also illustrates that the NBN market will be an extremely dynamic one, with ISPs changing their broadband prices regularly. We have yet to see a better outline of its more stable, eventual shape, and likely won’t for another several years.

Image credit: Robert Linder, royalty free

news National broadband provider Internode this week said its intention was, where possible, to eventually migrate all customers using ADSL infrastructure from rival wholesale providers Optus and Telstra to infrastructure owned by its new parent iiNet, as part of a “highest-priority” project following its acquisition.

iiNet announced it would buy Internode just days before Christmas, in a deal which has addded some 190,000 broadband subscribers and some 260,000 active services to iiNet’s already extensive customer base, vaulting the company into clear second place in Australia’s ADSL broadband market, ahead of Optus. The deal also extends iiNet’s current ADSL infrastructure and has seen Internode managing director Simon Hackett (pictured) become a major iiNet shareholders.

While many of Internode customers have been using its own ADSL infrastructure in telephone exchanges (these systems are known as DSL multiplexers, or DSLAMs), many have also been using infrastructure owned by Optus or Telstra, through wholesale arrangements. Using this infrastructure has been necessary in exchanges where Internode did not have its own DSLAMs, but delivers less features for customers and less profit for Internode.

In a post on broadband forum Whirlpool this week, Internode managing director Simon Hackett responded to a customer question about whether their broadband connection will be shifted off an Optus DSLAM during the iiNet/Internode migration and shifted onto an iiNet DSLAM.

“Quite likely (and certainly the intention), i.e. to migrate all customers we can migrate to Chime/iiNet ports where they are present and available and where direct Agile/Internode ports aren’t,” responded Hackett. “That project is part of what is pretty much our highest priority customer-facing integration project.”

However, the executive added, the migrations “may not be instant” because there were “quite a large number of them”, and there were limits to the speed at which exchange owner Telstra could implement the “bulk migrations” to iiNet’s infrastructure.

“Also, for various (partly wholesale contractual) reasons, customers who have been on Telstra or Optus ports for less than 12 months may not get migrated until the 12 month point,” he said. “These are things we have yet to fully explore – meantime we’re running full steam ahead on the actual integration/migration enabling process.”

Once the integration of key iiNet and Internode infrastructure is complete, however, Hackett noted all new customers signing up to Internode would be allocated onto iiNet infrastructure as a preference, ahead of Optus or Telstra infrastructure.

The practical implications for customers from being migrated is that they will gain access to certain technical features not available through Telstra’s wholesale network — such as the ability to gain higher upload speeds through the Annex M specification, as well as the ability to sign up to the full FetchTV IPTV service offered by iiNet and Internode.

Hackett noted there was a great deal of technical compatibility between the iiNet and Internode hardware in exchanges. “The nice thing about the Chime/iiNet ports is that they are identical hardware to Internode’s existing ports – so in feature set terms, we are working, obviously, toward the goal of 100% feature parity where you wind up on one of those ports (so that it ‘feels’ exactly like a native Internode port and works the same way in practice),” he said.

“We do have internal projections on the timeframe for enabling Internode customer access to Chime/iiNet ports and for then commencing migrations, but I don’t want to publish them here because of a tendency for some folk on whirlpool not to understand the difference between the terms ‘working estimate’ and ‘ironclad guarantee’. I will say again, however, that its a high priority for us, that all the pieces of that puzzle are already available to us, and that this work has already commenced.”

Image credit: Internode