Wholesale Channel:   Wholesale Utilicoms Plug Into Alternate Channels

Posted: 2/2002

Wholesale Channel

 Wholesale Utilicoms Plug Into Alternate Channels

By Khali Henderson

Progress Telecom, a provider of wholesale telecommunications services and a subsidiary of Progress Energy, expanded its sales division with the launch in December of an Alternate Channels program.

Progress Telecom joins other utilicoms, including FPL FiberNet, that made similar moves in 2001. FPL FiberNet quietly rolled out an agency program earlier this year and plans a more aggressive marketing strategy in 2002. Williams Communications also formalized its channel strategy with the quiet introduction of its PartnerEdge program.

As was the case with Williams and FPL FiberNet, Progress Telecom’s new program adds a new dimension to the company’s sales strategy. Previously the company engaged only in direct sales to wholesale providers. Now its wholesale services can be sold to service providers through resellers, agents and brokers.

Progress Telecom combines long-haul network coverage from New York to South Florida with metro network connections in first-, second- and third-tier markets throughout the Southeast. The company covers about 130,000 fiber miles and 7,200 route miles in its network including about 150 points of presence.

It offers wholesale customers circuits from DS3 to OC192 as well as wavelengths at 2.5gbps and 10gbps speeds.

Progress Telecom will provide dedicated resources and personnel for its channel partners, and, uniquely, will work directly with customers from initial contact to finalizing the agreements if needed.

“This new program allows carriers, vendors, resellers, agents and brokers to resell our network, either together or as a private-label product. Progress Telecom gains flexibility in the solutions it offers so that it can build both new client bases as well as enhance existing ones,” says Frank Dame, vice president of sales and marketing for Progress Telecom.

Denver-based Bandwidth Market, an online telecommunications brokerage, has agreed to participate in the private-label marketing strategy. In addition, TelCel Communications Inc., a Lakeland, Fla.-based telecom brokerage and end-user consultancy firm, will resell its eastern U.S. network.

“We see our agreement as a complement to our present product mix,” says Louie Holmes, a TelCel vice president. “Furthermore, Progress Telecom is an organization we know will be around for the long haul and will be our only partner in its particular market segment, broadband wholesale transport.”

Stability also has been a selling factor for the 10 new agents signed by FPL FiberNet, says its director of alternate channels Nanette Peralta, who was hired in January 2001 to create the company distribution program.

“The advantage to [agents and resellers] is that we bring balance to the program,” says Peralta. She explains the company offers competitive compensation, support and an extensive network, as well as the financial backing of its parent company FPL Group, a $7 billion utility.

Peralta notes FPL FiberNet is cash positive and contributed 2 cents per share to FPL Group stockholders in third quarter 2001.

FPL FiberNet provides dark fiber and bandwidth on its 2,400-mile fiber-optic network in most metropolitan cities throughout Florida. Through multiple interconnection and partnership agreements, the network spans 8,600 miles throughout the Southeast. Wholesale customers are offered metro dark fiber, DS3 to OC192 circuits, optical hubs, metro wavelengths and collocation services.

Peralta says the company plans to beef up its marketing campaign for the channel program, which includes agent and reseller models. A referral model was expected to be launched in January.

The referral program enables agents, resellers, carriers or industry specialists to earn one-time commissions on leads that result in sales.

Peralta says the model already is being used with one agent that sells FPL FiberNet’s collocation services but prefers not to be the primary seller for dark fiber accounts for clients that require such services.

FPL FiberNet also will expand its channels support staff in 2002 by adding a post-sale engineer and a salesperson, bringing the number on the team to five.

Peralta says the company plans to keep membership in the program to a manageable level with 10-15 agents, and a handful of resellers. The company already has one reseller in ITC^DeltaCom, which also is a partner in a joint build of its North Ring.

Unlike FLP FiberNet and Progress, Williams’ channel program includes resellers that sell its finished products into the retail market. Its agent channel, however is brand new and includes brokering wholesale deals for the company’s data services — a strategy in keeping with Williams’ commitment not to compete with its resellers for retail customers.

Amy Reiber, a Williams veteran, was tapped in mid-2001 to run the program as director of alternate channels. She says that the agent channel developed in part because of the opportunity presented by downsized executives who bring strong carrier relationships to the table. She would not disclose the number of agents the company has nor projections for the size of the channel.