As internet services progress, and speed, bandwidth and demand increase, service provider Timico reckons the hyped convergence market will flourish. Mobile dealers in particular are well placed to offer such compatible kit to strong customer bases, because of their expertise in the voice market.
Timico defines the convergence market as the collaboration of voice, data and messaging services from a single internet service provider (ISP).
Chief executive Chris Tombs (pictured left) says that, although the business started life in 2004 as a mobile service provider essentially re-selling Vodafone minutes, it has mutated into something more complex, where non-mobile products are crucial to its dealer proposition.
“When the business started up, one third of the connections were non-mobile and two-thirds mobile,” says Tombs. “Now, it’s the reverse.”
A major driver for this trend away from straight mobile connections has of course been the extension to contract periods.
Average SME contracts, today, run for 18 to 24-months, as opposed to the standard 12-month deals of old. Competition in the market place has also afforded customers hugely increased allowances – more voice and data usage for less. Reseller sales revenues have decreased dramatically, as a consequence.
“The offers have become much more acute; customers are getting much more for much less. So margin opportunities for providers are lower. It runs through the food chain, from network, through distribution and down to business partners. The maturity of the market place means you would need to have many, many more customers to make the same revenue as before. And it’s a saturated market so there aren’t many new customers out there.”
So, it is by necessity as well as design that Timico has recast itself as the mobile dealer channel’s convergence technology champion. Mobile is only one aspect of its value chain, remarks Tombs.
Of course, the present economic climate has just exacerbated the meagre returns available from the declining mobile sales channel, and Tombs suggests now, more than ever, it is essential traditional mobile dealers go beyond their comfort zones to cross-sell and up-sell a broader range of communications services. Differentiating on product, as well as service, is now essential for the independent channel.
Tombs suggests the Timico convergence proposition is greater than the sum of its product/service parts.
He says: “The reason the buyer buys and the seller sells is the eventual combination of solutions that makes the customer more dynamic. Delineating our proposition as separate divisions doesn’t work. It’s irrelevant which of our products first brings a customer to the Timico experience.”
Timico head of indirect channel Iain Sinnott (pictured right) adds: “It’s not that mobile is not important to us – it is just that mobile-only sales are unimportant to us. Our business is to supply customer solutions involving all forms of communication. We’re interested in mobile as part of that whole service.”
It might be unhelpful to its bottom line, and perhaps even its customer pitch, to distinguish Timico’s proposition as a disparate collection of business services. But it helps, here, to detail the range of its offering. Timico describes itself as a ‘business-grade’ provider of unified communications services”. Basically, it offers a head-spinning range of mobile, fixed line, broadband and VoIP services.
The mobile component comprises service provision of O2 and Vodafone airtime, covering voice, data, broadband and wireless LAN. For those familiar with comms terms and acronyms, the great chunk of its SME IP and fixed line proposition is concerned with VoIP, SIP Trunks, managed WAN, IP VPN, hosted servers, WLR and ISDN lines.
It sounds hideously complex, but Timico’s basic pitch is to enable SME’s voice and data communications across mobile and fixed line networks for efficient working. At the top end, it is reselling its services to BP, Foxtons, Vodafone, Stirling Ackroyd and Murco via its base of existing fixed line and IT resellers. Mobile dealers are operating at the core of its target market, traditionally offering a single part of a completely unified communications solution.
And they have to come on board, now, reckons Tombs. Old-school connectors are chasing an ever-decreasing circle of customers and commission payments down the drain.
Tombs suggests, on average, 92 per cent of sales through the channel are churn to existing customers, and just eight per cent of connections are brand new leads. Network operators cannot justify high acquisition costs just to keep business, without incremental growth attached.
“That circle has to change somehow,” says Tombs. “With us, 80 per cent of our business is new connections to new customers with new technology.”
Sinnott remarks: “Mobile dealers do not want to be low skilled prostitutes of a connection any more than their suppliers want them to be. You have to show them something else that they can do. Some of the bigger dealers have waited patiently for their suppliers to come up with a unified communications solution,” he says.
Full article in Mobile News issue 421 (June 15, 2009).
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