It’s a common refrain – don’t try to do everything yourself. Yet large service providers, in their bid for market share and higher profits, sometimes stumble in their attempt to serve some of the country’s harder-to-reach customers when a partnership with a utelco would better suit its needs.
There are two ways to get to become the new high-touch, IT/systems integration/communication service provider that’s so often discussed in telecom circles – you can go it alone, or you can partner with someone who has made the journey already.
Our view is that partnerships should be examined closely. Customers are the reason why.
What customers are looking for is a vendor – or a vendor consortium – that can meld the skills of a full-service carrier (for coverage as well as skills), the customer focus of the utelco and the knowledge of a system integrator/outsourcer.
The supplier customers want to hear from will be one part carrier, one part service and provisioning specialist, one part IT consultant and systems integrator and one part nursemaid.
Growing your own capabilities is an option, but to the desired level of service, there is a significant investment in skills that are somewhat foreign to the business model employed in past by utility telecoms, or utelcos, as they are known in the business.
There are companies that have made that investment already – some of those companies are already competitors, some of them are customers, some of them play both roles.
The partner, perhaps a large managed service provider or a best-of-breed data hosting provider, can complement a large service provider or a utelco’s customer-facing efforts. Customers don’t have a lot of extra money to spend on new gear so unused capacity from a hosting provider partner offered at affordable rates may match the prospective customers needs.
Large utelcos, such as Telus in central Canada or Bell in the west, may be trying to expand out of territory. That’s a partnership opportunity for everyone. Another alternative may be a managed services provider, such as a carrier, like Telus or MTS Allstream, with capacity to spare. Those types of companies can help round out the utelco’s offering to businesses in a particular region.
The benefits of partnering are many. A partnership with a managed services provider, for example, brings it with a number of advantages.
A partner can also bring extra credibility to the utelco’s sale – an established brand name could even help a utelco close the deal.
But aren’t managed services providers competitors? Yes and no. MTS Allstream and Telus have large sales forces that sell communications products and services across Canada – in effect competing at a regional level against the utelcos.
However, they are also potential partners, collaborators and suppliers. Among the many strengths a managed services provider brings to the table:
· Product depth, including a range of systems integration and skills expertise;
· Provisioning and support systems and protocols;
· Proven track record in service level agreements and outsourcing;
· Common challenges and competitors
The partner, that’s best suited to round out a consortium, obviously should first have a need – a gap that can more easily be filled with a partnership than by doing it themselves.
Technical depth is also a must – without the necessary skills a partner won’t be able to help solve the customer’s problem.
Equally important is reach, utelco’s know their traditional geographies well – a partner must be able to take them to new places.
Though a partner of larger stature will ideally compliment the utelco, there should be room to grow for both parties in the relationship. Find a team that appreciates your strengths, compliments your weaknesses and that give you room to grow. That’s the hard part.
A tall order for sure! But the partnership route can be the fastest, though treacherous, way to expansion.
So, look around for partners, learn how to team, learn who to team with … all teams aren’t equal!
Kevin Restivo is an analyst with the SeaBoard Group, which provides consulting services to telecommunications service providers and utelcos. He can reached at [email protected].
