For over a decade now the IT industry has been moving towards a converged market for voice and data services. In this converged market many IT resellers are excellently placed to be supplying phone lines and minute billing services to their customers, yet many seem to be reluctant to make any moves towards the voice market, perhaps believing that they lack the know how to provide adequate service in this area.
The reality is however, that in today’s world providing voice services is no more technically challenging than the data networking that IT resellers must already provide. Once established, voice provision will generate an ongoing revenue stream that the customer is unlikely to change unless there is a major disruption in service. By supplying voice and data connectivity, the IT reseller also prevents rival suppliers breaking into the account, keeping the customer ‘sticky’.
So how easy is it to be a supplier of a converged voice solution?
The first step is to partner with a network carrier and here there are two options. The first is to establish a direct relationship with network carriers such as BT Openreach, BT Wholesale, Gamma and so on. Such direct relationships have advantages, but it can mean maintaining several accounts with network carriers so that you can offer a full range of services at competitive rates. The wholesale price you are able to negotiate can often be dependent on the volume and commitment you are willing to make. Network carriers will also require a strong financial track record and may set minimum billing levels with upfront payments. This can be challenging for a new entrant into the voice market.
The alternative is to partner with one of the many network wholesale providers in the market. In addition to lines these companies usually offer a raft of network services, which can include hosted telephony services, 08 numbers, voice to text messaging and so on. Using a network wholesaler also means there is usually one contact for all services.
Services from network wholesalers are normally provided in one of two ways, depending on the payment model. The network wholesaler can have a direct financial relationship with the customer and pay you, the dealer partner, a commission on sales. In this case the services are usually branded in the wholesalers name and they are running the financial risk with the customer base.
Alternatively, the dealer partner buys the wholesaler’s services and bills the customer direct with an added margin. In this scenario services can be supplied ‘white labelled’ so that you, the dealer partner, can brand them as your own. Obviously there is a higher financial risk with this approach if the ultimate customer defaults on payment.
The approach you take will really depend on how much of a potential market you see coming from your customer base for voice network services and how risk averse your company is. If you see a lot of rapid growth and are keen to exploit it, a direct relationship with network carriers is probably a better option.
If you just want to dip your toe, with the minimum of resources, then using a network wholesaler can be better. Some will pretty much do all the work for you, such as line provisioning, fault administration and so on, leaving you to collect a tidy commission each month. However, many network wholesalers also supply end-user accounts direct, so there is always a possibility that customers may seek to eliminate you as the middleman.
Once in bed with a network wholesaler it can also be difficult to break away as they will be very reluctant to pass on a lucrative account to a network carrier and the network carriers may be reluctant to take you on if it means upsetting a highly valued network wholesaler!
Once a decision has been made on a preferred route for sourcing voice services for your customers, you need to establish a robust billing platform to invoice for those services, a whole topic in itself, which is best given it’s own blog post which you can find here!
Authored by Vincent Disneur, Head of Sales for Union Street