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Cablecos Offer Channel Partners a Choice

Telecom agents are becoming increasingly interested in alternatives to the telcos as suppliers. This is not only because of less-than-friendly and inconsistent channel policies issued by certain large carriers, but also because their customers would welcome a diverse network option. Cable companies have emerged as the logical choice.

Over the years, telecom agents overtures to the cablecos have been met with degrees of interest by the leading cable companies from open arms to cold shoulder. In general the relationships between cablecos and agents are warming up; most cablecos will work with agents. What that means in practice varies widely. And, agents remain frustrated by cablecos inabilities to support them in the manner in which they are accustomed. A lack of centralized systems, pricing and processes as well as slow quoting are common complaints. There is a blanket acknowledgement from the cablecos that this situation must be rectified if they are to be successful building an indirect sales channel, but their commitment and progress on this point is anything but consistent or certain.

In fall 2008, Channel Partners took a look at the major cablecos partner programs or lack thereof. A spring 2011 review of those same initiatives raises hopes that cablecos will become a true telco alternative.

Cablevision

Cablevision Systems Corp. is the pioneer among the cable channel programs; it added an agent program in summer 2006. The cableco learned some early lessons, changing its upfront bounties to a recurring commissions and spiffs within the first year of operation to better attract telephony agents that expect residual payments. In 2008, Cablevision reported having nearly a dozen master agents and about 80 direct agents. Joe Magliulo, director of alternate sales channels for Cablevision, told Channel Partners that number has grown over the past two years, but he did not specify by how much.

Magliulo told Channel Partners that the companys strategy and commitment to the agent channel remain constant. We utilize the agent channel to obtain customers that we could not influence or reach without the products, services or relationships the agent channel brings,” he said.

The Cablevision partner program operates under the Optimum Business brand name, which the cableco uses to market its communications services to small businesses. The Optimum Business offering includes Optimum Online and Optimum Voice.  In 2008, Optimum Voice included up to 12 lines. Today, the product suite includes up to 24 lines, SIP trunking and PRI products. In 2010, the division introduced Optimum Business Benefits membership program, which offers discounting and third-party perks for customer who subscribe to both Optimum Voice and Optimum Online. The agents are communicating with customers about the program and the added value it presents. In many cases, the savings realized from this benefit program actually pay for the customers communications costs,” Magliulo said. 

Since 2008, the company has increased the staff supporting the channel to include additional administrative and dedicated provisioning support. In addition, in summer 2009, Optimum Business rolled out an online portal to simplify the sales process and customer management for the channel. The portal enables the agents to conduct serviceability checks, place and track orders as well as obtain all collateral and order forms,” Magliulo said.

The company declined to reveal growth metrics for the channel, but Magliulo said it has been successful in meeting its objectives.

Time Warner Cable Business Class

Since its national partner program was launched in March 2008, Time Warner Cable Business Class (TWCBC) has been working to develop infrastructure people and systems required to support a nationwide program beyond a common contract and compensation plan.

That effort shifted into high gear in March 2010 after the cableco tapped former XO Communications channel chief Jim Delis to run its indirect sales program as vice president of national sales. Nearly a year later, Delis reported that in addition to Greg Iuzzolino, director of the partner channel, TWCBC now has three national channel managers and 14 local channel managers and seven dedicated sales support reps. In addition the partner program is working with the regional provisioning teams to support partner sales. In a similar vein, the company in January rolled out parity pricing for direct and indirect channels on a market by market basis.

There is a real change in the spirit of cooperation,” Delis said, referring to the historically decentralized structure and culture of the cable company. We now have a program that we can say is one program among six regions thats a big milestone for us,” said Delis.

TWCBC in fall 2010 also added a new order management and tracking platform, which is integrated into the companys CRM application, Salesforce.com. Iuzzolino said all partners have been onboarded to Salesforce.com as of fourth quarter 2010. Significantly, as part of Salesforce.com partners can access an application called Starting Point that identifies service availability on-net, off-net and near net. Iuzzolino said a next phase for Starting Point is to be able to look up fiber availability; presently it works for HFC plant.

Delis said providing service availability information is a challenge for all cablecos, including TWCBC, and they are working to reduce the number of false positives the application returns. We are trying to get to 98 percent correct. We are not quite there yet,” he said. But the big hurdle of getting a tool out there has started. We are using feedback to continue to improve.”

TWCBC has focused on a two-tier distribution strategy since launching its national program. To date, it has signed 15 master agencies. It also has more than 60 direct partners from its legacy, regional program. Delis said TWCBC will maintain these direct relationships and possibly add more where it makes sense, but he anticipates 90 percent of indirect channel revenue will come through the master agencies.

In addition to local market field support for subagents, TWCBC is testing an API enhancement that will enable subagents to access TWCBC through their master agency portal. The interface is in early stages of development, but could be available in the second half of 2011.

Delis said the channel now accounts for about 4 percent of the companys revenue. And, he projects the channel will double sales in 2011.

Charter Business

Charter Business has formalized its interest in the channel since 2008. In 2009, it brought on a consultant, David Neely, to work on sale program development. Neely developed and launched the Charter Business channel partner program in March 2010 and now serves as the cablecos senior manager channel partner program and national accounts.

Prior to that, Neely said the company dabbled” with indirect sales. As Channel Partners reported in August 2008, Charter had signed World Telecom Group as a master agency.

Today Charter Business has about 20 partners. I am not trying to sign up anybody and everybody. That is not the goal,” said Neely. We want the best partners and the partners that are going to help us grow our channel program. We understand it is going to take time to smooth out the rough edges and we want partners who are going to be patient through that process. We are trying to teach a lot to the channel partners about what is the cable business, but at the same time, we are also trying to learn. I am really focused on trying to lay a strong foundation for the channel partner program and not get too far ahead of ourselves and overpromise and underdeliver. We want to be methodical and grow the program.”

The company has hybrid channel program, targeting master agents and direct agents. In certain markets where the masters dont fit our footprint, we utilize some local specific agents,” Neely said.

Partners are supported by four regional channel managers who cover the Charters 27-state footprint. I have one in the Dallas/Fort Worth market who also manages the California market and Nevada. Then, I have got one in St. Louis that manages that central area. Ive got one up in the Wisconsin market that manages Michigan, Minnesota and Wisconsin. Then, I have a fourth channel manager in the Southeast in South Carolina,” Neely explained. Channel managers support agents in their territories on nationwide sales opportunities.

The channel additionally is supported by a national accounts fulfillment team. They support national accounts, including aggregators/rebillers like MegaPath and EarthLink Business.

Aside from channel staff, Neely also is addressing systems to support the channel. A top priority was to automate service availability lookups. The first thing I did right out of the gate in March 2010 was create a portal where the partners can log in and check service availability immediately,” Neely said.

In addition, he planned to rollout MasterStream from Salestream Software Inc. for instant quoting capability by the end of first quarter. The platform will include information on training, incentives, commissions and order tracking. One of the main reasons we are going to the MasterStream type platform is to be able to order track,” Neely said. However, partners presently can do this through Salesforce.com, and Neely plans to allow partners the option of using the platform of their choice.

Channel partners are able to sell the all of the companys products voice, data and video. The company plans to launch SIP trunking and hosted VoIP later this year as well. Partners are on a level playing field with the direct sales force as it concerns products and pricing.

Neely declined to offer metrics on the channels contribution to revenue or its growth in its first year. It continues to be a big part of the Charter Business initiative and we are pleased with the growth,” he said.

Comcast Business

Comcast Business Services in January signaled its growing commitment to the channel with the creation of new leadership position, vice president of sales indirect channels. The cablecos tapped Craig Schlagbaum, former channel chief for Level 3 Communications Inc., to fill it.

In his new role, Schlagbaum is charged with building the cablecos indirect sales program. I will have the responsibility for running the sales and program elements of a brand new indirect channel program focused on selling Comcast Internet and voice services through channel partners primarily to small- and medium-sized business customers,” Schlagbaum told Channel Partners in mid-January.

Comcast Business Services is experiencing strong growth. In its most recent earnings report for third quarter 2010, the company said the divisions revenue increased 54.5 percent to $333 million. (Excluding the contribution from Cimco Communications and New Global Telecom (NGT), acquisitions completed in the first quarter, revenue increased 44 percent.) Comcast CFO Michael J. Angelakis said the company expects the momentum in the small end of the business market to continue and we remain very enthusiastic about our opportunity to serve mid-sized businesses.”

As part of its efforts to reach the business market, Comcast intends to roll out a channel program over the coming quarters,” Schlagbaum told Channel Partners, noting that he hoped to have more specific details to report in time for the Spring 2011 Channel Partners Conference & Expo, March 13-15, in Las Vegas. We are going to do this right and make sure its a program partners can rally around,” he added.

Comcast Business Services tested the channel waters with an exhibit at the Fall 2010 Channel Partners Conference & Expo. They evaluated what the community was about, met with partners and determined there was an opportunity here,” Schlagbaum explained. However, the company does not have any agents presently, he said.

Schlagbaum will report to Terry Connell, vice president of sales and sales operations. He said his team will include channel-familiar staff from the acquisitions of NGT and Cimco. The respective agent programs for those companies are intact and their contracts are in force, he said. Schlagbaum declined to comment on whether the programs would be integrated with the channel he is building.

Cox Business

Cox Business also has brought in new channel leadership. Larry Steelman was hired as vice president of sales channels and programs in fall 2010. Part of his job leading channel strategy development is to study the opportunity to build a national agent program. That does not mean there has been a decision to do so. We are studying it now to see how to do it.”

That said, Cox Business currently contracts with hundreds” of agents, Steelman said. He explained that agents are engaged or not at the discretion of the managers in each market. Some of the markets have dedicated channel support and others do not; there is no standard and no central program, he added. Thats why we are putting all the information on the table and trying to rationalize our approach across the country,” he said.

The study will determine whether the partner program remains decentralized or is centralized. The work is ongoing, but no date has been set for its conclusion, Steelman said. Refining our channel strategy is a priority for 2011. I dont think you will see a big bang, but I think you will see modifications as we are comfortable with making those and achieving [our] objectives.”

This work is being done as part of a larger channel sales strategy. We are in the process of transforming sales to align with the way customers want to buy,” said Steelman. He added that Cox Business unlike many competitors has an extensive inside and outside sales force boasting 525 professionals in eight markets. At the upper end of the market, customers want fewer, higher value contacts and specialized vertical industry knowledge that this sales force can provide, Steelman said. At the lower end, however, Cox Business is leveraging sales partners in the form of large call centers. The company presently works with three both on a paid and commissioned basis. An earlier relationship like this with Nortel that was reported in a 2008 Channel Partners article was dissolved shortly after the gearmaker filed bankruptcy.


Looking for More?
Attend the session Cablecos as Telco Alternatives” at the Spring 2011 Channel Partners Conference & Expo, March 13-15, in Las Vegas. For more information, visit www.channelpartnersconference.com.


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