Gamma has announced a new pricing strategy that is set to stun the channel and their competitors by moving as close as you can get to an ‘all you can eat at no cost’ model for their SIP trunk and Horizon hosted telephony product. Comms Business Magazine quickly tracked down Gamma Marketing Director Richard Bligh to get the low down for readers.
Comms Business Magazine (CBM): In making the announcement that you are offering zero call terminations rates for your SIP trunks and Horizon hosted telephony Gamma is clearly laying down a marker for the channel. Why have you done this?
Richard Bligh (RB): There are a number of reasons. Firstly the market is heading that way; just look at the way in which mobile phone bundles are now put together with fixed costs for calls and internet usage. The fact of the matter is that business customers love fixed cost services and they hate bill shock. Secondly, we wanted to provide the channel with a real differentiator based around price rather than features and we wanted to be the first to provide this type of cost structure in the market.
CBM: We all talk about adding value all the time so where is the value in zero cost?
RB: There are a number of value adds in our new pricing model. For example, we include a full toll fraud prevention management tool in our SIP trunk offer and certain models of the Cisco IP handsets are provided free of charge as well for Horizon hosted voice applications. We are not setting out to be the lowest cost provider but rather just to be more attractive to business customers that want real value for money.
CBM: What calls are included or excluded from the no cost pricing plan?
RB: All calls to 01, 02 and 03 numbers from IP DirectConnect (SIP) and Horizon will be free. International calls, premium rate numbers are excluded as are calls to mobiles. However, the call termination rate for calls to mobiles will be reduced to just 1p per minute. There are very modest rises in the cost of SIP channels and the cost of a hosted seat.
CBM: What are the benefits for the reseller?
RB: This provides our resellers with huge differentiators especially when selling against a traditional PBX where the customer signs two long-term contracts; one for the equipment and another for lines and calls. Our calls are free and the contracts are not for the 2-5 years of the CPE model.
This is an attention grabbing move for sales and marketing personnel in the channel – they will get more appointments and gain more customers – especially with the free handset offer included as well.
At the same time we do not want to proscribe how this new pricing structure is passed on to end users. If resellers wish to work under ‘ye olde model’ then of course they can continues to bill their end users.
CBM: How do you think that end users will react to this new pricing initiative?
RB: They perceive fixed bundles as being far more significant than they actually are but the fact of the matter is that price differentiation is far more compelling than feature differentiation. It also works against fixed mobile substitution… why use a mobile when calls are free?
Built in fraud prevention adds to the overall value proposition and when they compare someone else’s fixed rates against your FREE rates – who’ll win?
This firmly positions Gamma as both an innovator and leader in the channel. It also makes it far more difficult for ‘The Big Boys’ to follow suit.
CBM: There are bound to be lots of questions from resellers about this so why don’t we cover a few obvious ones here. Like, what about existing customers, can resellers continue billing as normal? Will their buy rates be affected? How is Communicator and feature Plus affected and, this is the hot one – is there a fair usage policy when it comes to free calls?
RB: Resellers will bill their customers in the same way but can set the cost for local and national calls to zero – so they can also continue to bill per minute if they want to. There are no changes to buy rates in the majority of cases – in fact some will be lower.
Communicator and Feature Plus are not included in this new pricing.
The fair usage policy is a great question. We have set a threshold of 2000 minutes per user per month for Horizon hosted telephony and 5000 minutes per channel per month for our SIP trunks however the key question to ask then is… how many of our existing customers would exceed these call levels.
The answer to that question is simple – none would exceed the threshold.
CBM: So, what has been the typical reseller reaction and where do you see Gamma gaining business from competitors?
RB: We ran a series of webinars announcing the new pricing and were astounded to have more than 300 resellers ‘attend’ these sessions. Additionally we have received many calls on the subject and the overall reaction has been one of genuine enthusiasm.
Our channel partners now have a distinct differentiator and I see them taking business away from those selling expensive combinations of hardware, lines and calls.