|Comms Business talks to BT and Colt regarding their views on resellers developing European business.|
The minutes market is changing – the battle for mass-market voice is hotting up. By 2010, mobile and VoIP services will account for more than 60% of voice spend in Western Europe and up to a quarter of households will have abandoned plain old telephony services (POTS), according to a new report, Fixed–Mobile Substitution and VoIP: published by Analysys.
The mass market for voice services in Western Europe is being transformed by the substitution of mobile and new VoIP services for traditional fixed voice services. Katrina Bond, lead author of the report told Comms Business Magazine. “We expect that in five years 45% of voice minutes will be made from a mobile or VoIP connection, compared to 28% in 2004.”
The report reveals that there has already been substantial fixed-mobile substitution in Western Europe – mobile networks accounted for 51% of voice spend in 2004 – and predicts that mobile voice services will account for 35% of voice minutes and 57% of voice spend in 2010. Meanwhile, POTS will also face competition from VoIP services.
“The usage of broadband connections for VoIP is at a nascent stage in Western Europe currently, but the scene will change dramatically over the next five years,” says Bond. “In 2010, it is estimated that VoIP could account for 9.6% of voice minutes, but only around 3.6% of voice spend because of its low price compared with POTS services.”
The report points out that spend on voice services will decline as a percentage of disposable income because falling prices for all voice services will enable spend to be transferred to other services or uses of time.
This transitional phase of the voice market presents a number of challenges to the channel – not least from the carriers who have to migrate their offerings from a time based model to VoIP but also for resellers who need to be mindful of the fact that if they don’t manage their own customer migrations then someone else will do it for them.
Meanwhile, resellers and carriers have a day job to do and here we examine the views of both BT and Colt who in the same month have made significant comment to the channel regarding the opportunity for developing international business.
On the same subject Jon Lane at BT Indirect Channels says the advent of the Euro and the blurring of geographic boundaries across Europe have created a vast array of opportunities for UK companies looking to extend their reach into new markets and to new audiences.
“This evolution has also brought new opportunities to UK communications providers as their products and services become more and more attractive these growing companies. Now, while businesses of all sizes are able to have a physical presence in other countries, thanks to new communications services, they can even give the illusion of having a presence in another region without investing valuable resources in expansion or relocation.
As wider markets and new products become available, the opportunity for UK resellers to expand their portfolio and attract new customers has never been greater. But how do you go about identifying the customers most likely to want to take up these new products and services, and how do you capitalise on these to drive as much value out of them as possible?”
There are three core markets for international inbound call services:
• Companies that have a need for employees or customers to call them from overseas. These include businesses with large mobile workforces or satellite offices across Europe as well as retailers and services organisations with a customer base across a variety of locations.
• Organisations looking to extend their presence or audience into new locations or to ‘test’ a new market before investing large amounts of resource.
• Businesses that wish to give the illusion of an office in another country, or countries, but are unable to have an actual physical presence there for resource or cost reasons. For example, a small company based in Oxford may find that they do not have the resources, in terms of budget and people to open a physical office in Germany, but want to give people the impression they are local and will be easy to buy from.
In order to identify the customers that are most appropriate for you to work with in this area, there are some key questions that you should be asking:
• What are their international communications needs now and how will these change over time?
• Will there therefore be an opportunity for up-sell and cross-sell over the next 9-18 months as the organisation’s requirements alter?
• Does the company have a requirement for 24/7 communications availability?
• Do they have a large, mobile workforce spread across a number of regions?
• Would they want to develop a presence in another country, or test a market, without having an actual office there?
• Are they working with any other major communications providers to solve their international call issues?
• Do they lose business because customers perceive them to be too far away?
• Does the company want to advertise one number for people to contact, reducing marketing costs?
Getting the answers to these questions can help the reseller to establish the extent of the relationship and what solutions would be most suitable.
BTIC’s Jon Lane, “Traditionally, the way to communicate with a local audience (or mobile workforce) was to set up a call centre in each geographic location where you have a presence. This however, was expensive and time consuming. With the arrival of affordable non-location based inbound numbers (for example, 0800 or 0870 numbers in the UK) any business, no matter how small, can now afford to set up a single point of contact, which can be called from any locations specified. This can also be used to give the illusion of an international presence, because it is completely transparent to the caller that they are being answered in another country.”
Resellers can also add value by enabling companies to ‘Follow the Sun’, ensuring that their calls are answered 24/7 by routing them round the world in line with the working day. For example, an 0800 number can be provided, which is hosted in the UK from 9.00am to 5.00pm Monday to Friday, and is then routed via the US once the American workforce goes to business. Once the US working day end, the calls are then sent via Japan and then back to the UK. This provides complete continuity of communications for businesses, and gives the perception of a global presence, which can be extremely valuable for SMES working out of a single office if they want to compete in the global digital networked economy.
Deregulation has brought a glut of new voice and data providers in many countries, and any reseller looking to capitalise on this market needs to take this into consideration when selecting a vendor partner. Where it was previously possible to enter the German market, for example, by negotiating one contract with the main communications provider, vendors now need to be able to enter into agreements with all the providers in that country in order to provide a fully optimised solution for the customer. This is a crowded marketplace, and resellers should therefore look to partner only with those providers who have extensive, favourable contracts within the desired locations in order to be able to offer customers the best deals and to maximise the margins.
Deregulation has also brought with it a substantial drop in international calling rates, which is good news for the end-users and the business community and creates more opportunities to sell. However, this in turn brings down margins for resellers and it is therefore important to look to bolt-on and bundle value added services where possible. The market for data-services is rising exponentially, and this is one area in which the channel can capitalise on existing and new contracts. If you’re selling international data networking, the end customers could well require international voice services too, and vice versa.
The key for any channel player looking to increase reach and revenue in the international arena, is to look for companies that are trying to do that too, or those that are wanting to test new markets and audiences. By delivering a combination of trusted and preferential relationships with local providers, and a range of value-added services, the channel can certainly reap the rewards of this emerging market.
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