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July 23, 2008
Bandwidth.com is taking a run at becoming a next-generation CLEC. It will be certified to do business as in all 50 states by the end of July. And, it will roll out VoIP origination to 195 LATAs by the end of the year. To fill up this network, it has targeted indirect channels and launched its partner program June 1. Already two master agents – Telecom Brokerage Inc. (TBI) and World Telecom Group – are processing orders with Bandwidth.com.
In June, the company rolled out its first offer on its new network, an integrated access service available in 300 metro markets. The BoxSet service bundles feature unlimited calling, Internet service and the capability to work with virtually any phone system – all at a flat-rate price point as low as $179 per month.
Becoming a CLEC might seem like a big leap for a company that was founded in 1999 as an agent and became a data reseller in 2003. But, it is no stranger to IP telephony; the company has been an ITSP since 2004, processing and billing VoIP calls over a Sylantro softswitch using originating and terminating services of other carriers. Now, it has its own Sonus-based backbone with interconnections in 95 percent of the country’s LATAs, enabling it to provide its own DIDs and originating and terminating services.
“It gives them a much broader swath of the market that they can cover under their control and not have to be reliant on others,” said John Macario, president of consulting firm Savatar, which is know for its demand-side and channel research in the VoIP space. “I think it’s a great move. You’ve heard me say a million times that nobody is taking a dominant position in this market. I don’t know that it will give them that dominant position, but it’s certainly a necessary step for anyone who wants to dominate.”
As in its previous three annual studies of the market, Savatar’s most recent research, published in March, shows no one category of VoIP provider has gained a foothold in capturing the SMB market. Savatar said its study shows that SMBs that already have deployed VoIP are buying from equipment providers (39 percent), VARs (20 percent) and, to a lesser extent, traditional telcos (14 percent).
As a nationally branded IP voice provider, Bandwidth.com will face unavoidable comparison to XO Communications Inc., the No. 2 CLEC, which offers its own VoIP services. It also will be chasing after the same market as the ILECs and the cable companies.
But Macario said Bandwidth.com’s primary competition will be “inertia and business as usual.” “While they are likely to run into the XOs and the LECs and the cable companies from time to time, if they do this correctly, they will have an opportunity to be the first in to acquire customers that are currently being underserved,” Macario said.
Execution always is the caveat to success. On the network side, Bandwidth.com has installed a Sonus-based network with switches in six data centers – Los Angeles; New York; Atlanta; Dallas; McLean, Va., and Sunnyvale, Calif. On the OSS side, it is using some of the provisioning capabilities of the Sonus platform and the homegrown billing system it’s been using for the past five years.
And, on the sales side, the company has decided to beef up its channel strategy. The company has recruited Jeff Uphues, the former president of Voila IP, as its vice president of partner services.
“The channel is a big part of our strategic plan,” explained Bandwidth.com Chairman Henry Kaestner. “We’ve known that the products and systems that we had developed for the channel were top-notch, but that we needed an established leader that knew the needs of VARs, integrators and agents. It seemed that everyone we talked to recommended Jeff. We couldn’t be more excited that he chose to join our team when he had several other opportunities.”
Uphues, who is based in Houston, joined the company in February and relocated to Bandwidth.com’s Cary, N.C., headquarters this summer. Uphues started his career in telecom in 1989 at WilTel Communications Inc., but said most industry sales types know him from Voila, the VoIP upstart that was moth-balled after investors pulled support last year, or his years directing the local services sales teams for then startup MCImetro in the late ’90s. Uphues is responsible for several channels – strategic partners, agents/VARs and wholesale. The wholesale program will be rolled out later in the year. For now, Uphues is focused on furthering strategic partnerships and revamping the agent program.
He isn’t starting completely from scratch; Bandwidth.com claims 500-plus agents, five partner managers, two sales engineers and three channel managers who interface with large OEMs and distributors. However, Uphues said there was little structure, such as dedicated support and marketing resources.
As part of the retooling, Uphues has added a partner support manager, Mary Kate Fish, who worked for the company for four years as its primary customer support person. Fish will be charged with hiring support personnel for the partner managers. Uphues also added two new directors. Stacey McCormick, formerly director of sales and WTG, has become director of partner accounts West. She will be responsible for in charge of all partner accounts west of the Mississippi (excluding Texas) and will drive the formation and management of the partner advisory council. Uphues said he is grooming McCormick to run the partner channel. Darren Chamberlain, the former general manager of alternate channels at Global Crossing, has become the director of channel accounts West. He will drive large account opportunities (e.g., OEMs, SaaS providers, distributors) and is being groomed to run the program on a national basis.
Uphues also has defined a three-pronged program to allocate resources according to the requirements and commitments of the partners. Affiliate Partners will include agents bringing in occasional business; they will not have dedicated support or quotas. Sales Partner will be producing agents with dedicated support. Premier Partners will be master agents.
Uphues is evaluating the existing base of agents and recommending different roles for each. However, he is pushing a two-tier plan, incenting agents to align with one of a half dozen master agents Bandwidth.com hopes to secure. Those who remain direct agents will earn less – 10 percent on the BoxSet, for example – than they would by working with a master agent. Very large Sales Partners may be exceptions to this rule, he said.
In addition, agents also are required to become certified IP communications sales consultants via a two-day training course.
“Bandwidth.com is one of the few resellers that is totally focused on data,” said Vince Bradley, CEO of WTG, a Bandwidth.com master agent since 2005. “We are excited about Bandwidth.com’s new program. With WTG getting good traction in our new agent partner recruiting efforts in the VAR community, this program is a great fit for those WTG agent partners.”
TBI is a recent convert, but its CEO, Geoffrey Shepstone, said Bandwidth.com is doing well for the Chicago-based master agency so far. “They are hitting most of our requests for quotes in this footprint. Their commissions are very aggressive, and the support is really good,” he said.
Read more about:Agents
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