Adding value in the white label broadband business

There are now over 11m sites in the UK connected to a broadband network. Most of the broadband lines installed into SMEs are actually highly contented 'Home' products used only for web-browsing and email. In the next three years these will all need to be upgraded to cope as broadband takes over voice and some leased line applications. This represents a significant opportunity for Resellers to improve margins and develop new sources of revenue.

It is no longer contentious to say that owning the IP link is vital to success. If a Reseller sells their own branded broadband, as speeds increase and converged networks become a reality, they are in the driving seat when it comes to the up-sell. Partnering with a business-only, channel-focused ISP is critical to ensure the best quality IP link to carry future applications, such as voice and video. Resellers do not need to be an IP expert if they Partner with an ISP that allows the Reseller to own the customer but also offers training, 1st line support tools, simple provisioning, branded first line support and pre-bid support.

Providing a white label service to the channel should be more than just 'handing over the keys' and telling the Reseller to get on with it. How many new products introduced to your sales teams fail to really get going and then languish in the portfolio? Resellers know that broadband is too important to let that happen but one broadband line represents a tiny part of a salesperson's target and is not as simple to sell as most people at first think. How will your telesales executive respond the first time a customer asks: "Why should I pay you £30 a month for a product I can get free from Sky?" Do you know the answer? Of course there is one or our most successful partners would not be selling hundreds of broadband lines every month.

Matching channel with product with target customer is critical. Choose a white label ISP that invests in the ongoing training and coaching of your telesales teams and spends time with your field guys identifying and qualifying major multi-site opportunities. Involve your partner early in the deal so that you are not tripped up by questions like: "Why would I trust you with my 500 stores when I can get a cheaper deal from BT?" Above all think twice before you choose a partner that also has a direct sales force competing with you on these lucrative deals.

In the retail sector alone more than one million electronic point of sale and chip and pin dial-up lines will need to be converted to IP over the next two years. This is a fantastic opportunity to introduce truly converged solutions to a sector with a compelling need to change. Resellers are able to justify the increase in cost of broadband compared with dial-up by replacing separate exchange lines that have been used for fax, voice and security with one or two broadband lines carrying voice, data and video.

New Multiprotocol Label Switching (MPLS) based broadband VPNs are far easier to install and manage than traditional internet based VPNs. As such this represents a rich source of high-margin recurring revenue without significant management overhead. In a market where consolidation and acquisition is high and where providers are here one day and gone the next, there are benefits in choosing a provider that not only has a good track record but also is innovative and prepared to invest in products for the channel.

If you already have a white label deal selling voice and broadband you have made a good start at protecting future revenues and increasing the value of your company. You may now want to consider other margin opportunities such as hosted voice, SIP trunks, white label managed hosting, storage and disaster recovery solutions for customers running critical IT solutions.

Overall the message is clear:

• It is nowhere near as difficult as it used to be for Resellers to sell and support their own branded broadband portfolio and even very small Resellers are doing it. Specialist ISPs will set you up in a matter of days with a fully managed white label platform for very little cost.
• Choose a 'full service' partner and they will help train your sales and customer service staff as well as work with you to win major bids.
• Turning third-party commissions into recurring revenue streams not only bolsters turnover but adds to the value of your company if and when you consider exiting the business.

And finally, do not worry too much about when IPCentrex and SIP trunking will take over from PBXs and SIP trunking. Your customer needs to ask you for a MAC key before they can switch to another ISP. So get your customer base onto your own broadband and they will tell you when they are ready to change - driven to you by your competitors.