HOSTED TELEPHONY

HOSTED TELEPHONY

David Anahory

David Anahory, managing director at SpiriTel

 
Kenny Kamal
Kenny Kamal, chief technology officer at Inclarity

The hosted telephony market is increasing year on year, as the technology matures, as networks provide quality of service at a price point that makes it attractive as a proposition against IP PBX’s, and with its recession-shattering financial flexibility. Here, Heather McLean explores the opportunities for the mobile channel in hosted telephony.

Hosted telephony has been around for a number of years, but it is only in the last two years that that industry is seeing real traction in winning new business, states SpiriTel’s Anahory.

Anahory comments: “There are two main reasons for this; firstly the technology is robust now, allowing providers to deliver private DSL connections to customers and guaranteed quality of service to the end user. Secondly, customers are now more aware of the technology and are no longer afraid of embracing technology which was seen as cutting edge two years ago.”

Hosted telephony offers a whole new approach for the independent channel, agrees Everitt. He says: “Traditional PBX suppliers have been encroaching into the mobile space for some time now with some success, but until now the ability to reciprocate has always been stifled by the specialist knowledge required for the hardware and installation.

“As with all the potential additions to the mobile dealer’s portfolio, hosted telephony provides a revenue stream that, once fully understood, can increase customer entanglement as well as provide important ongoing revenue,” continues Everitt.

Recession proof

The market for hosted VoIP is gaining momentum. During this current economic climate, customers see the benefits of deploying cost effective, flexible telephony, states Kamal. Whilst the lack of CAPEX investment has always been a benefit for hosted VoIP, today this also means customers can concentrate their resources on their core business, he says.

The current economic climate provides an excellent opportunity for the mobile dealer looking to increase customer efficiency and money saving, Everitt states: “These two things are at the top of the priority list of almost every customer we talk to these days; even if things are still buoyant in their

business today there is an undercurrent of nervousness, understandably, that factors outside of their direct control could have an adverse or catastrophic effect on revenue at any time. I think if hosted telephony can be profiled to be efficient, cost effective but most of all, flexible, customers will be far more open to it. I think as adoption of this concept becomes more widespread, the independent dealer can springboard off this.”

Orr agrees: “Selling hosted telephony means more in the way of recurring revenue and profit. Unlike minutes and lines, there is less competition in the hosted area, and more long term contracts, which will automatically lead to winning network and call revenue.”

 

New revenue

Anahory lays out the situation for mobile dealers today, and why hosted telephony is a new revenue opportunity that should not be passed by: “The mobile industry has been growing ever since its inception over 20 years ago. As the industry matures, operators are constantly looking at new products and services that will drive up spend from existing customers. In a commoditised world the costs for mobile telephony are only going in one direction, and the income opportunity from selling mobile voice services are going to be limited.

“For mobile dealers who have not diversified and taken on fixed line telephony products, the jump to hosted telephony is something that will deliver benefits today and in the future,” claims Anahory. “SpiriTel finds that contacting a mobile customer with the ability to offer a hosted telephony solution gives the business additional gravitas as a solutions provider. The fact that you have hosted telephony in your portfolio means that your business isn’t seen as a one trick pony, regardless of whether the customer has a requirement at the present time. In addition, hosted telephony opens up a new revenue stream for the business that can be tied in for three to five years, substantially longer than current mobile contracts,” he explains.

As part of its consultancy services, SpiriTel has found that customers are looking at reducing overheads as the country falls into recession. Selling hosted telephony can deliver additional cost reductions to businesses as well as securing the customer and revenue stream from multiple products, says Anahory. “At SpiriTel we’ve found that customers are looking for solution sales and a partner that adds value across multiple telecommunications products and applications, not someone who can just provide a cost saving on mobile telephony,” he comments.

 

Challenges

Yet Everitt says spreading a portfolio too wide can have a detrimental effect on the mobile dealer: “As dealer’s products and services portfolios grow, it is important that they are not seen as trying to do too much and thereby increasing the potential to fail a customer, by becoming less ‘specialist’. That said, there is a definite synergy between mobile and hosted telephony. Technology is continually offering new revenue streams and dealers need to build confidence over a period of time with such solutions.”

The biggest challenge for hosted telephony is mistrust in the channel, claims Everitt. He claims this has a potential slowing effect to widespread adoption within the channel. “We as a dealer had a horrific experience with fixed line provision a few years back and have not had any involvement with that business area since,” he explains. “The availability of hosted telephony does change things, but there are always concerns with new revenue streams that a sound mobile relationship might be hurt by poor customer experience with something new, should it not go according to plan, and no one can afford to risk losing customer right now.”

Everitt continues: “I suppose it needs a leap of faith by the dealer to really get behind new revenue streams like this. For us, I want to be investing and using it ourselves before taking it to our existing customer base. Even then it will be a case of dipping one’s toe in the water.”

Dealers must choose customers for hosted telephony services carefully, says Everitt. By that he means size, level dependency on their fixed system and how easy they will be to work with. “Success stories and positive testimonials are key to building any revenue stream, but particularly so when replacing a business’s core infrastructure when new technology is involved,” he comments.

 

Partnering

This leads to another major challenge facing dealers wanting to move into hosted telephony is to decide whether they partner with an established provider and resell hosted telephony products, or try to build the capability themselves, says Anahory. He states that his company has a dedicated channel business and support infrastructure geared towards supporting dealers who have no experience of selling hosted telephony, including a large field engineering team for nationwide installation and maintenance services, plus training for dealers.

Kamal adds: “It is key for a mobile dealer to find a partner that can offer the whole range of services, from design to project management and installation with ongoing support. An ability to whitelabel the offer to dealers is also key, either in whole or part.”

While Orr states: “Mobile dealers trying to get into this area need first of all to find a good partner to supply the hosted product. Servassure can help with the deployment. We are installing such systems in offices and public buildings. We have engineers trained to do fixed-mobile surveys and installs.”

To sell hosted telephony, dealers should look to their core vertical customer base, and study what their customers buy and why they buy, recommends Kamal. He also says a good play for sales in this area is to package hosted VoIP with existing offerings and perhaps with hosted applications. Kamal sums up: “A strong defensive play is required for dealers looking to retain their customers. Hosted VoIP makes customers stickier, with higher ARPU with strong uptake of value add services, in addition to innovative tariff models.”

 
 

Ed says:

As with all things sold through the mobile channel, the most important point is to match customers’ needs and requirements to the right product, and to work on a consultative approach to ensure strong long term relationships. Hosted telephony is another string to the bow of the savvy mobile dealer.

 
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