Wholesalers should push services, not access

Jessica Scarpati
11 Jun 2010
00:00
 
Although some of those losses can be chalked up to the economic downturn over the past year, the wholesale drop-off reflects the same problems carriers are facing in their consumer and enterprise units, according to Cindy Whelan, principal analyst at Current Analysis.
 
"They're still losing a lot of access line revenue … as customers move to VoIP and other technologies," Whelan said. "That's still aligned with wholesale."
 
Leasing network access will continue to be inherent to wholesale telecom services, but it will be the value-add products that play a starring role in reviving wholesale revenues, according to Whelan.
 
Service providers are "looking toward offering higher-valued services, managed services and things they can offer their wholesale customers at a higher value and a higher margin -- instead of just providing access," she said. "What we're seeing is a transition right now.
 
They're developing these unique services for wholesale but still having to contend with losses on legacy wholesale [telecom services]."
 
AT&T recently announced it would open up its Intellectual Property unit to wholesale customers, who will be able to license some of AT&T's proprietary, in-house business management systems -- ranging from customer relationship management (CRM) to network monitoring -- within their own operations.
 
Sprint CEO Dan Hesse has said strengthening his company's wholesale telecom services will be "a strategic priority," according to Smith, who said the unit has focused on working closely with cable operators, competitive local exchange carriers (CLECs) and mobile virtual network operators (MVNOs) to offer more creative and individually tailored wholesale packages.
 
"[Customers] have told us point-blank that there are plenty of wholesalers that approach the business the old way: 'Here are the options we have. Take it or leave it,'" Smith said. "We are very consciously trying to break that model and break that mold because we think that's what's going to unlock the value of what this wholesale business can bring…. If you don't have that deep, collaborative relationship with your customer, you're never going to achieve that goal."
 
Sprint's wholesale unit recently worked with i-wireless, a MVNO reselling prepaid access to Sprint's CDMA network and using the Kroger grocery chain as its sales channel. Kroger customers earn 20 wireless minutes for every $100 they spend at any Kroger-owned store.
 
"We're enabling [i-wireless] to deliver a unique solution to a marketplace that gives their customers something different than they might buy from Verizon or AT&T because it's not just another wireless service and we haven't just provided a dumb pipe," Smith said. "We've taken [our] assets and collaboratively integrated [them] with the asset of our partner to create something new and different that gives them a competitive advantage."
 

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