Colt woos channel for telco model shift
Unit director reveals plans to embrace newer technology as it targets PBX resellers in growth drive
City lights: The City of London-based Colt has revealed that financial services remain a key vertical for the carrier
In the increasingly cut-throat carrier market, Colt is migrating a wealth of resources towards the channel to help its bid to “move away from the telco model”.
Rob Jupp was recently promoted to a role as Colt’s business unit director for its mid-size business division, in which he will effectively serve as channel manager. He replaces former SME head Andy Horn. Jupp said the division’s increased remit means it will now address 20- to 1,000-seat companies.
“My target is to grow our business,” he said. “There are two main things: one is more focus on our [existing] partner channel, the other is recruiting new partners.”
Mid-size freeze
Jupp revealed Colt has recently initiated a policy of taking no new midsize customers direct. Some existing direct custom will be migrated to the channel as and when appropriate, but there is no masterplan to do so on a grand scale, he added.
“We have done that to an extent, where we can give customers a better service, and we will continue to look at that.”
Financial services remains a key vertical for City of London-based Colt, said Jupp, in addition to media and professional services.
“Colt is good at moving large amounts of data around Europe,” he said.
“As an organisation we still have the historical strength in core network services and voice is still a very important application.”
The carrier landscape has become fiercely competitive over the past couple of years, with many channel figures reporting that margins – particularly on voice lines and minutes – have faced a tight squeeze.
Data from Ofcom reveals that, between 2003 and 2009, the volume of fixed voice minutes used annually in the UK fell from 167 billion to 138.6 billion – a 17 per cent drop. Revenues from fixed access and calls fell almost a fifth, from £11.2bn to £9bn.
Ofcom’s most recent Communications Market report, published in August, described the past 10 years as “a decade of change”.
“Over the past three decades the telecoms sector has seen the emergence and growth of new technologies and services,” it added. “Until the 1980s the telecoms market was primarily focused on fixed-voice telephony services.”
Mobile call volumes exploded during the past decade, with 111 billion minutes clocked up in the UK during 2008 – an almost 90 per cent rise in five years. But mobile revenues grew at a progressively slower rate of less than 60 per cent to £15.4bn. Between 2007 and 2008, revenue grew by less than three per cent on the back of an 11.1 per cent spike in minutes.
Jupp claimed Colt still enjoys success in the voice space, but that the carrier will increasingly look to newer technologies.
“Voice minutes is definitely a very competitive market and there are very competitive carriers out there,” he said. “We still play in that area, and have some good business, but the focus is on the next generation.”
Overstated erosion
Richard Bligh, group marketing director at Gamma Telecom, argued that the erosion of margin in the voice market has been overstated.
“Conventional wisdom says there is not any margin left,” he said. “But if you look at the margins that you make on minutes, it is a damn sight more than you would make on selling routers or PBXs.”
Bligh said that the number of competitors his firm faces had dwindled over the past decade, with Colt, Gamma and Kcom being the only remaining smaller players. There will always be a place for more specialised firms “provided you know what your niche is”, he added.
Colt is particularly on the lookout for PBX VARs, according to Jupp. He said the carrier would work hard to skill up partners whose background was squarely in hardware.
“Some of them [only] focus on managing the change-out, installing the new switch and then providing the maintenance,” he said. “We are investing in more focus, more support for partners and joint partner development plans. Where appropriate, we will help train the partners.”
Recently, making more information available to partners has been a key focus, he added.
“It is now easier to deal with Colt and [partners] are aware of the potential of all our products. Even with our long-standing products, there was a knowledge gap.”
One partner to have recently signed up with Colt is G3, which previously worked with Opal. G3 director James Jeffs claimed Colt’s continental reach had been a deal-breaker. “It had a pan-European network with a lot of features and benefits,” he said. “It also gave us some good rates.”
Jeffs agreed with Colt’s policy of courting hardware VARs and said that PBX resellers need to skill up quickly.
“For companies that are not looking to become more skilled with their data services, they will find it difficult to win any real enterprise customers,” he added.