It’s a Cross-Border Invasion, Eh

NetOne Solutions Inc. is telecom’s first master agent in Canada and has signed non-exclusive deals with multiple carriers. Why should that matter to agents in the United States? Because, say NetOne executives, this means U.S. agents can get paid for cross-border traffic terminating in the Great White North.

James Rutherford, president of NetOne, and COO Barry Wong have been negotiating with carriers for payment models that more closely resemble those in the United States; Canadian carriers tend to pay up front, with smaller residuals. “Every carrier in Canada wants that cross-border traffic,” says Rutherford. “It’s very important to them; they understand the value in it. So if we can build a business case as to how we can help them achieve it, they will certainly work with us.”

So far, NetOne has signed deals with Allstream Corp., Navigata Communications, Primus Telecommunications Canada Inc., Sprint Canada and Bell West. The company also has an agreement with Shift Networks, a broadband telephone company offering a suite of Internet-based communications services, such as wireless voice and networking, instant and unified messaging, and a variety of hosted business applications. Finally, NetOne recently partnered with TeraGo Networks Inc., wireless broadband data communications provider in Canada.

NetOne’s approach is so unconventional for Canadian telecom industry that few of its partners are willing to go on record about their dealings with the master agency beyond confirming the relationship.

However, a representative for Navigata, which is based in British Columbia and has offices in Alberta, Ontario and Quebec, spoke to PHONE+ via e-mail. The carrier, which is part of SaskTel, took on NetOne as its first Canadian telecom master agent, says Scott Calderwood, Navigata agent manager for Alberta. “The key reasons we have chosen NetOne Solutions [are that] they have an excellent understanding of both the Canadian and U.S. telecom industries, their understanding of subagent networks, [and] their proven work ethics,” Calderwood says. “We are confident that NetOne Solutions will professionally and effectively handle cross-border voice, data and Internet solutions.”

Navigata will enable NetOne agents to terminate high bandwidth data (T1 to OCx) and VoIP from the United States to Canada and to India.

Calderwood says Navigata is not yet engaging U.S. partners directly, but the company welcomes the opportunity to work with NetOne to expand its U.S. reach.

NetOne’s agent services are filling a void in Canada. One carrier representative, who does not wish to be identified, cites the “great need” for alternative sales channels between the United States and Canada. The source says the company wants the U.S. agent market to know there are options in Canada for providing face-to-face service and support, other than the incumbent telcos. The source says, while direct sales people obviously have relationships with the telecom carrier for cross-border deals, the agent market gives the company access to other U.S. carriers’ agents.

The source adds players in the Canadian telecom industry would “love” to see the agent market grow to the same breadth as the U.S. market, but acknowledges it likely would happen on a smaller scale. However, the source says, “The powers that be obviously recognize the benefits of the agent sales model and are committed to growing its success in the Canadian marketplace.”

Navigata’s Calderwood also says the partner channel should become as significant in Canada as it has in the United States. “We will watch the development of NetOne Solutions closely; we see a strong probability their business model becoming the standard for the Canadian telecom industry,” he says.

Certainly, Rutherford and Wong are working to create a successful cross-border channel for NetOne and its agents. Both men come from long backgrounds in telecom.

Rutherford founded NetOne Solutions and is president and CEO of the company. Before starting NetOne, however, he worked for AT&T Canada and Sprint Canada. He has extensive experience in sales and marketing of telecom products and services through indirect channel distribution. Wong was a dealer principle and manager of a prominent multilocation Rogers AT&T/Cantel Cellular dealership from 1996 to 2001. From 2001 to 2003, he served as president of Sienna Group Ltd., a Sprint Canada agency. Then, in 2003, with the merger of Sienna Group Ltd. and NetOne Solutions, Wong took on the role of COO and managing director.

NetOne’s goal is to help make small and medium-sized businesses profitable, Rutherford says. “We make them more profitable, we become profitable, and the customer wins because we’re able to provide high levels of customer support that they’re not going to be able to get from the carriers,” he says.

Rutherford and Wong are working to have 210 agents by the end of the year, with 50 percent of them based in the United States. They planned to attend the Channel Partners Conference and Expo in Las Vegas in March and scout for up to 20 top agents. NetOne has received queries from a few U.S. agents, Rutherford says. “We’ve had calls from four different U.S. companies over the last three weeks. We haven’t even put our name out there really to do anything. The last thing we want to do is start a bit of a momentum without the ability to maintain or sustain it,” he says. NetOne is expanding its support services; it has grown to include three offices and 16 employees.

NetOne continues to work on its compensation programs, as well. Rutherford says he hopes to offer agents 90 percent of the total deal because NetOne still is working with carriers to change Canada’s residuals. “I would rather pay the majority out and make enough to cover our basic operating [expenses] so that we can get a book of business to take forward to our carriers and say, “‘Look, here’s what’s coming out of the States, here’s how we have to be paid,'” he says. The company also touts bonuses and agency programs, agent and technical sales support, network design services and fast turnaround on quote requests.

In addition, NetOne does all quotes for its agents. “We don’t ask any of our agents to do paperwork,” Rutherford explains. NetOne has contracted RPM Software to provide its back-office solutions and to manage online agent access such as commissions tracking and access status reporting.