Channel Partners

December 7, 2006

7 Min Read
A Great New "Door-Opener"

By Dan Baldwin, Telecom Association President

A new “black box” technology known as a PBX cellular gateway is raising small business interest and scoring appointments for distributors by helping them show businesses how to lower their cell phone bills without switching carriers.

Also known by the term “fixed cellular terminal,” cellular gateways save a business money by cutting their cell phone bills four ways:

1. Cost for calls from the office to an employee’s cell phone go to zero when the office phone system calls the employee’s cell phone accessing the cellular gateway. Calls from the office to an employees cell phone normally entails two charges — an outbound landline call charge and an inbound cell phone charge. In contrast, the cellular gateway, a.k.a. a fixed-cellular terminal connected to the PBX or phone system, turns the “off-net call” (landline to cell phone) to a cellular-only “on-net call. This is achieved because the office PBX or phone system connects directly to the cell network through the cellular gateway.

2. Cost for calls from an employee’s cell phone to the office go to zero when the employee calls the office cellular gateway. Normally, you would be charged once if the cell phone calls the office landline phone number and twice if the cell phone calls the 800 number.

3. Cost for other calls from an employee’s cell phone drop when the calls are made through the cellular gateway. Certainly the cost of international cellular calls are cheaper when connected through the office landlines. In addition, employees will not use the cell phone for unauthorized calls when the employee knows that calls not made through the gateway are not authorized and that calls made through the cellular gateway are being tracked.

4. Costs associated with employees maintaining two voice mail boxes drop when the office phone system routes all employee calls not answered at the employee’s desk to the employee’s cell phone.

How to Make Money With This Information

Business cellular gateways or fixed cellular terminals, while very popular overseas (Google the terms and most sites are outside the United States) are just now catching on here — probably because the United States seems to always be a year or so behind the rest of the planet when it comes to incorporating great new cellular technologies. This cellular technology adaptation lag creates a tremendous opportunity for telecom and technology solution providers as follows:

1. Find businesses with a lot of cell phones

Obviously, you’ll want to target businesses you know that have high cell phone bills due to outside employees. The best way to find such companies is to partner with business cell phone distributors. Once they learn you’re going to help them sell additional activations to power the cellular gateways they’ll be happy to work with you. If you know of a particularly hot business SIC code or Yellow Page listing that uses a lot of cell phones, give TA a call and we’ll hook you up with a big prospect list of those businesses with that SIC code or yellow pages heading in your area.

2. Direct mail or telemarket the prospects to set up appointments

Because using plug-and-play cellular gateways or fixed-mobile terminals is a relatively new way to help businesses cut their cell phone bills, getting appointments with lead statements like, “Let me show you how we help businesses like yours cut their phone bills in half using plug-and- play cellular gateways.” Another great lead would be, “Let me show you how to cut your business cell phone in half even if you’re in a contract and can’t switch cell phone carriers.”

3. Screen prospects by getting them to fax you their phone bills

You may or may not have time to personally visit every business that has a cell phone. Start by calculating the categories of cell phone calls. The target category is calls between corporate cell phones and the corporate offices that could install a cellular gateway. All these calls can be switched from “off-net” (from the cell network to the POTS network). Another category of calls would be 411, international or other premium cell calls that would be cheaper if routed over a landline through the cellular gateway. Finally look for off-net calls more than two minutes long that could be routed over the office’s landlines.

4. Calculate ROI before calculating the solution price

When a new solution with limited competition is rolled into the market, it is more appropriate to base the solution price on the customer’s expected and/or accepted calculations for ROI or return on investment rather than some arbitrary “cost plus profit margin” model.

For example, let’s say a business is spending $10,000 a month on its current cell phone bill. The customer agrees that with a cellular gateway in place their cell bill will drop to $6,000 a month which provides a $4,000 per month savings to pay for the investment of the cellular gateway. If the customer accepts that six months is a proper time frame to recoup their investment for the cellular gateway, then the cellular gateway solution price (equipment, installation, programming and follow-up) should equal no less than $24,000, or six times the monthly savings figure of $4,000.

The six-month ROI used in this example is the absolute minimum “ROI rate” among successful cellular gateway distributors — many are getting 12 months ROI or more. If you can’t get your prospect to pay at least a 100 percent margin on your costs for the packaged cellular gateway solution then keep looking for better prospects — they’re out there and they’re waiting for your call!

5. Don’t directly sell the solution components

Selling equipment is a lot different then selling service. You can’t “give it away and make it up on volume.” In other words, don’t give away the equipment at your cost or with a cost-plus markup. In fact, don’t ever tell a client that the cellular gateway can even be purchased as an individual component. Every VAR worth his or her salt never sells components separate from the total “value added solution” package (hence their title). If your cellular gateway supplier (or any other cellular gateway distributor on the planet) discovers that you’ve posted a retail price for a cellular gateway solution component on the Internet, expect a severed horse head in your bed.

6. “Loan” your client the solution in exchange for other business

Since the cost of the solution is cheap in comparison to its ROI value (a lot of telecom equipment is sold that has a 24-month ROI) you should seriously consider not selling the cellular gateway solution to your client at all, but simply “loan it to them” for the duration they contract with you for other services, an MPLS data network for example or to enhance your return on a TEM/TCM (telecom expense/cost management) agreement you sign with them where you get paid on how much money you save the customer. (In an arrangement like this you’ll want to first make sure you can block the customer’s cell phones from calling off-net to force the cell phone users to use the cellular gateway for off-net calls.

7. Use a demo as a door opener for your other solutions

Even if you know a business client or prospect does not have a lot of cell phones, the appointment getting lead statements in No. 2 above will likely get you a demo appointment with those C-level technology business decision makers who love to see any and every new business cost saving solution so they can impress their bosses. The cellular gateway demo is very easy to do, can be done in five minutes and is an efficient way to prove to the decision maker that you’re the go-to guy for all his or her telecom and technology solutions.

Click here to watch a video of an easy-to-do cellular gateway demonstration.

Next Step, Get More Information and/or Buy a Demo Unit

The next step in distributing cellular gateways is to get more information or to buy a demo unit like the one in the demonstration video. My source is ITS Telecom. Ask for Fred Palacios, director of sales, +951 243 2253l, [email protected]. Tell him I sent you.

Comment on PBX Cellular Gateway Solutions

I have created a topic in an Internet group to field feedback from telecom distributors with experience installing cellular gateways for business customers. If you would like to comment on cellular gateways or read the comments of others please click here or go to and search on “PBX cellular gateway”.   

Dan Baldwin is president of TelecomAssociation and can be reached at+1 951 245 6877 or

[email protected]


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