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Firstly and maybe most importantly you need to be sure that the ISP you partner with is not going to take advantage of their position to cream off higher margin recurring revenues for themselves. When the roll-out of 21CN is complete all traffic will go via the ISP and Resellers need to ensure that they own the IP relationship with their customers by partnering with a channel-only business ISP that offers a white-label managed broadband option.

Also, ask your ISP about their sales strategy and the pre-sales technical support they are prepared to make available to you. Multi-site IP deals can be complex and include hundreds if not thousands of lines. They represent a significant amount of monthly recurring revenue (and profit) to the Reseller and consequently it has been known for ISPs to take the business direct, cutting out the Reseller under the pretext that it was 'already on their prospect list'. This is particularly common where channel managers are allowed to deal with direct customers as well as Resellers.

Look at the financial stability of your partner and understand how much they are investing in product development and innovation. True convergence will not happen until broadband starts to look more like leased lines and less like a best-effort replacement for dial-up internet access. This is achievable right now but sophisticated and expensive equipment is required in the core network to give Resellers the power to manage bandwidth usage and prioritise applications like voice, on all of their broadband circuits.

ISPs that have been going after residential customers – either retail or wholesale – are suffering a ‘treble-whammy’ at the moment. To compete in the residential market they have had to go in at wafer-thin margins. The recent spate of ‘free’ broadband offers has driven many of their residential wholesale customers out of business leaving the ISP with millions of pounds of bad debt. Those residential customers that remain are using more and more bandwidth creating unmanageable traffic peaks and congesting networks also used by enterprise customers. Many ISPs do not have the money or technical know-how to control this and many are faced with raising capital externally or putting themselves up for sale.

There are now several alternatives to BT’s IPStream and although LLU (Local Loop Unbundled) operators are in no more than 30% of BT’s exchanges, between them they cover around 60% of the business population. This offers the Reseller the choice of a number of new products from very cheap highly contended entry-level business ADSL to 1:1 contended broadband for leased line replacement. However managing all of these suppliers is complex, requires an in depth understanding of xDSL provisioning, XML and in-life management and is really not the job of the Reseller. Choose an ISP with a strategy of broadband aggregation and good technical skills if you want to have access to variety of broadband products.

Management of your estate of broadband customers is key. Typing orders into an ISP portal and managing faults over the phone is fine when you have only a handful of customers but for an estate of hundreds of broadband lines it is totally inadequate. Furthermore, compared to the value of a PBX or call revenue, ADSL is insignificant and if it causes a customer service problem your sales people will soon stop selling it regardless of how strategically important you tell them it is to own the IP connection to the customer.

Choose an ISP that can give you comprehensive and easy-to-use provisioning and management tools so that your customers are kept automatically updated of the progress of their orders and when they have a problem your own staff can easily do end-to-end tests and isolate network faults from equipment faults. This will become increasingly important as you supply more applications (voice, VPN) to your customers via their broadband connection and they become more reliant upon it.

Finally do not be bamboozled by the current hype around VOIP. Setting up SIP trunking or a hosted PBX is relatively easy, witnessed by the almost weekly announcements of new entrants into the market. Making it work at a price that both makes money for the service provider and the Reseller is a little more challenging. Choose an established operator with robust and well supported technology and again watch out for the ISPs using their IPCentrex and SIP trunking products as Trojan Horses to get into your base. Every SIP handover is slightly different and a true ISP partner will be working on compatibility with major voice and hosted PBX suppliers rather than trying to just force their own product on you.

If you have any further questions you are welcome to ask Griffin by calling 0870 8040804, emailing sales@griffin.com or visiting www.griffin.com.

Source: Comms Business - May 2007