Is the TSDModel Sustainable? By Peter Radizeski Many would argue about the definition of master agency, but it boils down to the company holds carrier agreements and has selling partners as sub-agents. While the term master agency is being phased out, the telecom broker model is still in effect. The new terms are technology services distributors (TSD) or technology services broker (TSB); let’s shorten that to “broker,” as the company that holds the partner agreement with the vendor to get paid commissions on the sale of services. Today, the landscape is dominated by less than 10 companies. There used to be more regional brokers with sub-agents or partners selling through their carrier agreements. As quotas were increased by carriers at the same time price compression started, regional players have been rolling their bases up to the brokers in order to secure on-going commissions. Many partners utilize more than one broker – up to five different TSDs – in order to spread the risk around and maximize the commission. Undoubtedly a majority of that business ends up with one of the larger TSDs. As the regional brokers get squeezed for business and by less attractive agreements with carriers, more business rolls up to the larger TSDs. This is a giant of the vendors’ making. Vendors wanted just a handful of agreements, but the flip side of that is your channel business is controlled to an extent by a handful of firms. 50 CHANNELV ISION | MARCH - APRIL 2022 CHANNEL MANAGEMENT
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