Roundtable Presents Wholesale Survival Tips

Convergence and consolidation are among the factors changing the carrier landscape, and urging wholesalers to revisit and reinvent their business models. To discuss the changes in the market as well as trends and opportunities, COMPTEL has assembled a panel of wholesale executives for an hour-long roundtable this morning. These include Michael Friloux, COO for Citynet; Ernest Ortega, president of carrier services for XO Communications Inc.; Ted Raffetto, CEO of Vanco; and Glenn Russo, group vice president for Level 3 Communications Inc.

Session leader Judy Reed Smith, CEO of research and consulting firm ATLANTIC-ACM, will kick off the session with new market-sizing numbers, and then the panelists each will discuss wholesalers three greatest challenges and opportunities.

Sometimes in talking to those, they end up being the flipside of the same coin, said Reed Smith, citing the example of wholesale relationships with content providers like Google. They are a huge opportunity at this point in providing wholesale services to them, but they are possibly, in the long term, a heavy competitor.

While Google has told its wholesalers it is not going to build its own network, wholesalers should not count on it, said Smith. Time does funny things to business models, she added.

Another two-sided issue is the issue of consolidation, making it more difficult for CLECs to match the massive footprints and the economies of scale of the mega telcos, Reed Smith said. However, this reality creates an opportunity for CLECs to explore ways to share their networks to extend coverage and develop more profitable business models. Panelist Ortega recommends instead of buying from the larger players, competitors find ways to work with each other whenever possible and fill each others networks first.

Panelists also will discuss challenges such as downward price pressure and declining revenue from voice services.

On possible countering opportunity is the renewed requirement for bandwidth, partly due to IP and now the emerging video and picture sending. We think in the 2008-10 range, there will be more demand due to video, she said.

Of course, another opportunity is VoIP. Reed Smith said in her firms research, there are nine different products, ranging from hosted PBX to termination, that wholesalers can offer to other services providers.



XO Communications Inc.


Level 3 Communications Inc.

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