Definitely Not Dull!

In an exclusive post IPO interview Comms Business Magazine talks to Gamma Managing Director Richard Bligh about what we will see in 2015 from the carrier and how they will make an impact in the market.

Comms Business Magazine (CBM): All the talk in the industry at the moment seems to be around consolidation. For example, BT buying a mobile player or two and Vodafone buying a fixed line provider and some TV channels. What is your take on the state of play right now?

Richard Bligh (RB): I guess the first thing we can say is it’s not dull! There’s so many rumours out there about who’s buying who and why. Our take on it is positive because Gamma and the channel exist because the large established telco’s can’t offer services and solutions to parts of the business market that customers want, or more typically, can’t work in a flexible way the customers want. As the larger players get even bigger two things will happen – they’ll spend even more time and effort on internal re-orgs, and they’ll get even slower to react to market changes and demands. That creates further opportunity for the channel, and therefore for Gamma.

Ultimately there could be a point where sector consolidation could squeeze out the mid-sized and smaller players like Gamma or KCom or even the large service providers such as Daisy etc. However, we feel that scenario is highly unlikely. The main driver for this potential bout of consolidation is the consumer market and developing a quad play. That’s a long way from selling SIP to a utilities company, or selling call centre solutions to a bank.

CBM: How will Gamma’s recent IPO position the company in this new world?

RB: It puts us in a fairly unique position in terms of our size and scale. Most of the publicly listed networks businesses are very large companies (BT, Vodafone, etc.), so Gamma is a bit different in that we’re of a much smaller scale and represent something different to both the customer and to the market. Obviously, from our perspective we build our propositions around both scale of a networks business and flexibility of a nimble service provider.

The IPO was very much to do with positioning ourselves favourably in this new world and wanting to ensure that our brand becomes better recognised in the end user business market and therefore make our partners selling job easier.  PLC status does add a degree of credibility to our business and particularly in markets such as enterprise and public sector. This has been further enhanced by the share performance since we listed.

Going through the IPO process did give us confidence that we have a strong future in the new world – our existing shareholders are staying in for the longer term having sold down a portion of their shareholding, and the float was oversubscribed where demand for Gamma shares far exceeded supply. One of the most important and pleasing aspects of the IPO was that all our staff were given £1,000 worth of free shares, and therefore felt that there was something in it for them.

CBM: Why do you think the Gamma IPO was a success ?

RB: Two main reasons – the fact that we could demonstrate ten years’ worth of successful, cash positive growth made our story a lot more credible, and also that it is mainly the same team from ten years ago that took Gamma to market in October. That combination gave potential investors peace of mind that it wasn’t a high risk technology business relying on some embryonic market to grow in the future.

CBM: What differences will the channel see in Gamma in 2015?

RB: I don’t think the channel will see much difference to be honest. Same people running the company, same strategy and same emphasis on our market leading services. The IPO wasn’t done to raise cash and go on a massive acquisition trail, so as much as you can ever predict anything I would expect Gamma in 2015 to be very similar to Gamma in 2014. We will continue to really put our foot on the gas with SIP, hosted and Inbound. There really is so much potential for growth with these services in the business market, and we feel there’s no reason to change our core focus. Changing a winning team is always risky, although speaking as a Leeds United fan, I don’t really have much experience of winning teams!

The changes and new products planned for 2015 are very much part of what we’ve been working towards for a number of years, it ensure we have a full portfolio of voice, mobile and data services and that we continue to look at innovative ways of making these services integrate better with each other around how customers work.

CBM: Why has Gamma been so successful in SIP trunk and hosted telephony markets?

RB: A number of interconnected reasons. First to market was the main reason but coupled with the fact we already had decent volumes of ‘traditional’ business with channel partners. That meant we were competing with early providers of SIP and hosted who in effect were starting from scratch. The size and scale of our network and operations was also a key factor in establishing an early market lead, not so much in terms of ‘we’ve got a big IP network’ but more in terms of ‘we know how to port numbers from BT’ and we have a 24/7 support infrastructure already in place.

Looking back it was the more subtle benefits we brought to the party like our portal, our porting capability and our breadth of services that helped our success. For example, we never believed the PBX would die and the world would go hosted – we always felt there would be a healthy market for SIP connected into PBX’s and for hosted as a PBX replacement. That was a good call. The final reason for our success has been our decision to constantly innovate our SIP and hosted services, not just in features and capabilities but also in the commercials. So from bundling in the calls to 01/02/07 numbers on the fixed price of SIP channels to introducing a PCI solution for SIP in call centres, we’ve continued to develop and evolve our hosted and SIP services in an effort to stay ahead of the competition.

CBM: Do you have a view on the reported proposal for BT to merge Wholesale in to Openreach?

RB: It’s something we’ve read about in the press but to be honest, don’t really have a view at this stage, as it’s just ‘industry talk’. We can see some industrial logic for such a move, but wouldn’t want to comment further.

CBM: Against a backdrop of worrying performances in overseas markets how confident are you that the UK economy has really turned a corner and is looking positive.

RB: If you can judge the state of the UK economy by the positivity and success of our 650+ channel partners, then I would say the UK economy is in good shape. Clearly that’s a very big if, but safe to say our continued growth as a business is driven by the success of our partners. If we look at the more negatives aspects of dealing in the channel – bad debt, disappearing partners, etc., then the channel is doing well. Recent shows like IP Expo and Convergence Summit South reinforced our impressions that the market we operate in is in rude health and has bounced back nicely from the challenges of a few years ago.

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David Dungay

Editor - Comms Business Magazine