Carriers: comrades or rivals?

Dave Everest is sales director of the ViNO division at Matrix Communications

Broadband virgins are hard to come by nowadays, which is one of the reasons carriers are so deeply entrenched and inward looking; becoming highly protective of existing customers while flying the occasional sortie to snatch business from the competition.

Fewer carriers seem to be investing in channel relationships, when not so long ago they were nurturing and supporting them. Aggressive consolidation among the ISP community is fanning the flames of this trend. Service providers are not only bigger and more difficult to engage with now, but they have enhanced their product offering beyond wires only to provide routers, firewalls and the like.

This fervent merger and acquisition activity increases brand penetration, but also makes those service providers far ‘stickier’ to their customers. We are now seeing the rise of xSPs, essentially ISPs of old, that are offering bundled products to enhance competitiveness. But while beneficial for the service providers, this new market landscape leaves resellers with less choice of suppliers and, in turn, suppliers who look more like competitors.

Many resellers experiencing the cold shoulder from the carriers they used to do business with are shocked to find those same carriers showing up in competitive tendering situations. In the face of this threat, the smart choice would seem to be to cut your losses and concede defeat. After all, for xSPs to provide high-quality voice services natively, it invariably results in customers being locked in and competitors locked out.

On the other hand, what if there was another way into these big sales opportunities and potentially
wide-margin value-add?

The reseller’s intrinsic value has always been its ownership of the customer relationship, based on hard-earned trust. This overwhelming advantage cannot just be given up. Another asset for the reseller is that customers do not want to spend resources managing a relationship with a carrier.
So the carriers have finished their ‘land-grab’ and now seek to grab resellers by the short and curlies. The choice is either negotiate out of the situation with clever tactics, or run in the opposite direction and risk some painful damage.