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The business end of the ISP market is almost as crowded as the residential end so what makes an ISP stand out from the crowd?
In the last 12 months consolidation has been the key theme in the UK ISP market with many once famous name ISPs being gobbled up by rivals seeking the volume and critical mass to make money in a very competitive market. How do they add value and where are the real reseller opportunities in the market? What are ISPs doing about Voice?
IP is the platform of choice for all emerging technologies so ISPs would appear to be in the ideal position to exploit this as ‘masters’ of the dominant technology. However, despite this advantage, true commercial success will only come if ISPs offer a quality service, supported by solid customer service and attractive margins. It is only ISPs who work with the Channel, rather than trying to break it, who will succeed and build meaningful relationships with their partners.
Mark Salvin of Fused Group says that it will also only be ISPs who move from traditional IP products like connectivity to more networking and application-led services that will be successful – both in their own right and with recruiting and retaining channel partners.
“Fused is proactively working on ensuring we have the right solutions for the channel in terms of voice, networking, mobile working and convergence applications but that we also offer opportunities for margin and that the commercials are thought-out and attractive.
| Top 10 ISPs By Subscriber Size |
| 1. BT Retail 4, | 251,000 |
| 2. Virgin Media | 3,590,000 |
| 3. Carphone Warehouse | 2,604,000 |
| 4. Tiscali (Pipex) | 2,000,000 |
| 5. Sky Broadband | 1,199,000 |
| 6. Orange | 1,138,000 |
| 7. Kingston Comms | 195,255 |
| 8. Tesco.net | 132,000 |
| 9. THUS Group (Demon) | 126,000 |
| 10. Entanet | 92,000 |
| Source: ISP Review February 2008 |
“It is our aim to add value by ensuring interoperability of all our products so that channel partners can make the most of convergence opportunities with confidence. We trust this will lead to lower churn rates – it is in everyone’s interest to have longer contracts and relationships.
“Cheap ISPs with no commitment to service, support or quality are demeaning the industry and add no value whatsoever. Whilst broadband has become almost another household utility service, in the business sector, its value needs to be maintained as it has far greater value to business clients and is mission critical for most business processes.
“ISPs are the companies who should be actively embracing voice – they are the ones who are supposed to have the greatest understanding of the IP platform so should have no fear when dealing with it. Fused Webcalls, the Fused Group’s IP telephony service, has been completely re-worked to ensure it is meeting the needs of the channel and we are confident it will offer one of the most compelling channel voice propositions.”
Consolidation:
Tiscali has been at the centre of the consolidation of the UK ISP market with several key acquisitions. In 2006 the acquisition of HomeChoice enabled the company to extend services offered to the residential market to include not just data and voice but also TV, positioning Tiscali as the leading innovator in the residential market.
The acquisition of Pipex in September 2007 however not only boosted its share of the consumer market but extended Tiscali’s Business to Business capability. The acquisition brought familiar names to the reseller community such as Nildram and Pipex Business which are being integrated by Tiscali to extend the product proposition and simplify relationships with key resellers.
The combination of Tiscali Wholesale Services, delivering high volume deployment of Next Generation Network-based ADSL, and Nildram capability, with some very innovative services such as bonding, means new services can be brought to market to increase the opportunity for both large and smaller resellers.
The recent launch of ADSL2+-based products offers one example of this. Bringing real value to resellers now and leaving in their wake the resellers dependent on wholesale products reliant on 20th Century legacy equipment.
From a commercial perspective the experience of the combined Tiscali/Pipex/Nildram activities allow significant economies of scale to be passed through to resellers, enabling them to compete more effectively and further raise margins in their Business to Business activities.
Lastly and most importantly, the consolidation of the B2B activity has allowed Tiscali to focus all B2B reseller support activities in one 24/7 centre focused entirely on business activities. That means better support, by more qualified engineers, delivering a more consistent experience through the channel to the end customers.
Another ISP that has recently launched ADSL2+ is Murphx who offer speeds of up to 24mbit download and 1.3mbit upload across over 800 exchanges throughout the UK.
ADSL2+ increases the speed of the broadband connection by increasing the frequency band that the service operates at. This service is not due to be offered nationally by BT Wholesale until full deployment of 21CN in 2011.
Carl Churchill, Commercial Director at Murphx, commented: “The demand for the service has increased rapidly as organisations look for high bandwidth solutions to deploy convergent applications. With BT 21CN not providing a national ADSL2+ product until 2011 partners have been concerned that there was a long wait for such technology when the requirements for such a service are now apparent. Our partners no longer have to concern themselves with both upload and download bandwidth constraints they have experienced with other broadband products.”
Differentiation:
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VoIP Propositions
In the small – mid-sized business market, identified by nearly every voice and data provider as offering resellers the biggest growth potential in terms of VoIP, end-user customers are looking for a solution that provides business-class functionality and the flexibility to meet their specific needs.
Entanet’s approach to providing a competitive VoIP service that resellers can aggressively compete with has been evolutionary. Using their in-house programming team, Entanet has applied their technical IP expertise to develop their own VoIP platform and product portfolio. Farnden concludes, “As a result we enable resellers to address the needs of single and multiple user customers. We address those that have bespoke requirements for integration into current business systems or already have an IP PBX solution installed and simply need to terminate VoIP traffic.”
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Griffin Internet - Top 10 Reseller Tips
1. Pick a business-only ISP
2. Pick a channel-focussed ISP
3. Pick a voice-ready ISP
4. Pick an ISP that offers white label products
5. Pick an ISP that offers full sales, marketing and technical training
6. Pick an ISP that offers pre-bid support
7. Pick an ISP with experience of successful lead generation and close rates
8. Pick an ISP that can demonstrate that they have run successful sales and marketing campaigns with their partners
9. Pick an ISP that can help you uncover and win large bids
10. Pick an ISP you can trust
The Smaller B2B ISP
Calum Malcolm, Business Development Manager Solution1 says typically the large ISPs dealing mainly with the domestic market rely on the fact that their typical end-user is a single household with typically 1 or 2 PC voice extensions and that having enough bandwidth is the key. The domestic market will also more happily put up with the occasional quality degradation.
“A business user who relies on voice as key business tool will expect a high quality reliable service. The B2B ISP is better placed to provide this as their networks are built around providing consistent service to business users.”
Ed Says
Growth and competition in the UK market for consumer broadband and VoIP is forcing resellers to focus on the business market more aggressively, as consolidation is fuelled by price wars and free-service bundle marketing programmes. To many, the business-to-business market presents a more stable opportunity to grow healthy business that’s driven by customer desire for business-class functionality, reliability and quality of service.
