ChannelVision Magazine

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Undersea transport providers and other regional or lo-
cal capacity providers actually are indifferent to the specific
size of the “mobile” opportunity. It simply does not matter
whether the underlying demand consists of “mobile access” or
“fixed access” bits.
Other providers, such as data center and cloud computing
providers, likewise are basically indifferent to “mobile” rev-
enue, as such, since their products are largely insulated from
“access” nuances.
In other cases, some industry participants are largely or
completely unable to participate in the mobile business, even
if they might prefer to do so. Smaller fixed network operators
or Internet service providers, for example, might never have
the footprint or capital to become viable contestants in the
mobile business.
In other cases – particularly for telecom channel providers –
there simply might not be a role. Whether that is a “problem”
or not is the issue. For some industry participants, mobile is an
essential part of all business strategy. The question is how im-
portant mobile is for the telecom channel.
Some products are more complicated than others, and fa-
vor use of channel partners that add value. The SMB market,
and computing products, are the classic examples.
Where is the Value?
It is fairly easy to describe how consumers use mobile
channels for e-commerce. It is fairly easy to describe the ways
enterprises or small and medium-sized businesses sell their
products through mobile channels.
Establishing the value of indirect telecom sales channels
for selling mobile services to enterprises and small and mid-
sized businesses is far less clear.
As much as 85 percent to 90 percent of partner sales are
based on use of indirect channels, according to Stephen Dent,
Partnering Intelligence founder.
And yet most participants in the U.S. telecom channel
business know instinctively that sales volume is not driven by
mobility products, if mobility products have any substantial
role in the sales portfolio at all.
Traditionally, channel sales have been most valuable for
products that are moderately complex, in the space between con-
sumer retail and enterprise direct sales. And that is significant.
Many products, even some that once were more complex,
now are simple. And simple is the enemy of channel partner
potential value. With some exceptions, international long
distance is simple. Video entertainment feeds – as used by
business customers – are simple.
As it turns out, mobility also is simple. To be sure, enter-
prises might want to neg e purchase agreements.
They might wish to mandate use of virtual private networks
when employees and partners access enterprise databases.
But beyond using VPNs and negotiating volume dis-
counts, business buying and use of mobility services is rather
straightforward.
The mobility buying process also poses little financial risk,
compared to past decades.
The absence of a big “hand-holding” function is a tradi-
tional reason why indirect channel partners often are valuable.
So how do people buy mobile service?
By 2011, perhaps 66 percent of devices were sold di-
rectly through carrier retail stores, according to NPD. Per-
haps 29 percent of devices and associated service accounts
were sold through other retail locations (electronics stores,
grocery stores). Perhaps 5 percent of devices were sold us-
ing online channels.
Mobile service, as it turns out, has become a product more
akin to a consumer packaged good than ever seemed possible
in the past.
What is conspicuous about that pattern is the nearly
complete absence of traditional telecom “channel partner”
sales. There is high involvement by “retailer” channels,
but not the traditional telecom channel partner distribu-
tion mechanism.
That is not to say there are not potential changes coming
in the distribution function. As consumers (business or con-
sumer) become increasingly comfortable with the mechanics
of buying service and devices, there is room for new retailers
(national discount chains or retailers) as well as online chan-
nels to generate higher sales activity.
In 2013, the Apple Store, for example, sold 11 percent
of all mobile phones bought in the United States, and
about 25 percent of all U.S. iPhone sales, according to
Consumer Intelligence Research Partners. Electronics
retailer Best Buy represented 13 percent of U.S. mobile
phone sales.
The CIRP study also confirmed that carrier stores
were the leading channel. Big box retailers such as Target,
Walmart and Costco made up 12 percent of sales, while
Amazon represented about 7 percent of sales and eBay 2
percent of sales.
One might note that mobile is a well-understood product,
easy to source and activate, with few provisioning complica-
tions. That might not have been the case in the 1990s, which
is why mobile service providers opened their own branded
retail stores, allowing them to explain how to use the services
and how to choose devices.
Source:
Cable Business Services and Selected
Competitors’ Revenues
Comcast Business
TWC Business
Charter Business
Mediacom Business
L(3) Enterprise proforma
Cablevision Lighpath
WOW Commercial
VZ SBS
AT&T SBS
$10,000
$8,000
$6,000
$4,000
$2,000
$-
Q1 2012 Q4 2014
Millions
Source: CompTIA, 2014
Primary Catalysts for Channel Business Transformation
Cloud pushing in new directions
Demand for new services and IT delivery
Desire for recurring revenue model
New financial models are more lucrative
Vendor pushing for change
Margins on product sales declining
Defensive more against obsolescence
41%
36%
35%
32%
27%
23%
23%
Source: Consumer Intelligence Research Partners
2013 U.S. Mobile Device Sales Pie
Carrier
57%
Amazon
8%
Mass/
Warehouse
11%
Best Buy
12%
Apple
9%
other
3%
Percent Saying “Likely to Respond” to Sales Call
Source:
87% 87%
78% 78%
61%
43% 39% 35
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Email Text
Message
Mobile
Phone
Office
Phone
Voicemail Linkedin Instant
Messaging
Faceb
Source: The SIP School
If you could ask one question of your SIP trunk provider wh
Source: Research Triangle Institute
Comparing Respondents Reach
BRFSS, by age
When will you
support HD Audio?
What are you doing to
support FAX over IP?
Can you provide TLS/SRTP for
secure signaling and media?
When will you support SIP
‘profiles’ to match each PBX/SBC
manufac ures’s configurati n?
Other
11.55%
7.37%
0 20 40 60 80
18-24
35
30
25
20
15
10
5
0
25-34 35-44
Percent
Age Category
BRFSS ICS
Comparing Respondents Reached,
BRFSS, By Education
45
40
35
30
t
62 ChannelVision | January - February 2016