CLEC Struggles Mean New Opportunities for Agents

With AT&T and Sprint essentially exiting traditional residential voice, channel partners have a new opportunity to work with new VoIP competitors, as well as RBOCs looking to win back customers lost to the CLECs, says Rob Wunder, vice president of marketing at VoIP service provider Sipmedia.

People are literally just exiting the [residential voice] business en masse and are moving at this relatively unproven technology en masse, says Wunder, who along with Ken Rotman, president with Allianex LLC, is a panelist on Tuesdays session entitled Partners Hit Home: Residential/Consumer Opportunities.

Today is a tremendous turning point in the industry due to the exodus of CLECs from residential voice, says Wunder of Sipmedia, a one-year-old company offering Internet-based local phone services in 45 states.

AT&T and Sprint have announced plans to stop marketing traditional residential voice services in light of the expiration of rules allowing competitors to lease RBOC-switching facilities at government-mandated rates. Wunder says he expects MCI to make a similar move.

As a result, agents have the opportunity to help VoIP companies like Sipmedia as well as RBOCs win some of the new business created by the CLEC void, Wunder says. Theres an extraordinary opportunity similar to the time in 1984 when the Bell system broke up because finally we have a legitimate path directly to the customer, he says.

So the agent can choose to bring customers back to the ILECs and deal with what the ILEC does to the agent which usually is lower commissions over time or agents can act as a channel for a company like Sipmedia, says Wunder.

Allianexs Rotman, the founder and former managing director of Fionda, says the fact AT&T and Sprint are leaving the residential business means agents no longer have to compete with their TV advertisements and heavy marketing. Those services were big profit centers for [the CLECs], says Rotman of Allianex, which specializes in selling consumer services such as high-speed Internet, cell phone and pager services and soon VoIP. The agent channel had to compete with them. Now its almost as if our agents competition is no longer there.

Still, with prices for end-user services decreasing, the channel community needs to figure out how to deal with monopolists like the RBOCs, cable companies and direct broadcast satellite players, adds Rotman, explaining agents need to offer a variety of services to keep customers and drive revenue. Agents need to consolidate power and convince cablecos we are a viable channel for them and that they should offer us residual income, he says. One issue channel partners can stress is how working with master agents that handle back-office and other support systems means monopolies dont have to incur a lot of new expenses to support the channel.

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