Satellite Sales: An Out-of-This-World-Opportunity

We all know that broadband has moved from a nice-to-have to a have-to-have for businesses. But what happens when those businesses are too remote for affordable wired circuits — or any circuits at all? And what happens when disaster strikes and the SMBs and small enterprises that rely on data communications find themselves shut down?

The answer is, literally, cosmic: satellite service.

As astronomical as it is (think 22,000 miles in outer space), it’s an answer that channel partners can increasingly and convincingly give their customers. “For agents and channels, satellite represents just another offer they can bring to their customer base, but one that differentiates,” said Mike Polmar, vice president of sales at SkyPort Global Communications. “A lot of folks are already selling T1s, traditional services, voice termination and video, but there are so many market segments they’re already tapping that they can go back to with a satellite story.”

Satellite Sales Proposition

Take the business continuity and disaster recovery scenario, for instance. “A lot of people have diverse facilities coming in, but we’ve found that even if it’s a diverse T1 you buy, at some point it connects through some kind of cable or fiber, and those facilities might meet or be side-by-side conduits,” Polmar explained. “Satellite is a completely separate path, not beholden to the terrestrial network — that’s very attractive to companies that stand to lose large amounts of money in the event of an outage.”

The fact that satellite was the only thing that worked after Hurricane Katrina has heightened satellite’s profile in such situations.

Beyond disaster recovery, channel partners can solve any number of business issues with satellite. Frank Marro, program manager at Cleveland-based channel partner MCPc, said multilocation companies always should be vetted for a satellite fit. “A lot of companies may have multiple locations but are not needing a lot of bandwidth to each of them,” he said. “Gas stations fit this profile; we have one account with 100 stations along an interstate, transmitting small amounts of PoS (point-of-sale) information. In some areas they can’t get DSL and don’t want to pay $400 for a T1. So we put in a satellite link and they aggregate the traffic across all the locations onto that, and it’s very cost-effective [compared to dropping a T1 to every location].” SkyPort’s sat-links start around $1,000 each.

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Satellite also has the advantage of international reach. “We work with a lot of international companies, in one case a military contractor with people all over the world as well as in Iraq and Afghanistan,” said Marro. “In these types of cases, they don’t have a lot of options. When you’re out in the desert, in that case, satellite is the primary connection.”

Polmar said satellite is attractive even in areas where there are other options. “Let’s say a company has seven sites in the U.S. and one in Africa,” he postulated. “The price for a terrestrial circuit in Africa will be extremely expensive. Satellite there is very price-competitive.”

Remote locations within the United States are another ripe opportunity for similar reasons. “We have accounts in tribal areas, for outfitting school buses in those areas where nothing else works,” said Jim Corry, vice president of government solutions at Mobile Satellite Ventures, which provides voice-over-satellite and push-to-talk-style services. “We also work with a company that has 1,100 fishing boats of the coast of Alaska. We provide a common talk group so they can talk one-to-many and keep in touch. It also helps maintain morale because we allow crews to talk back to the base station, where a wife or daughter can come into the dock house to say hello.” MSV plans cost $69 per month for unlimited push-to-talk service and $1.19 per minute for phone calls.

Other applications might include support for police in squad cars, command center mobile vans, health care clinic vans, bloodmobiles, and other mobile clients that might find themselves in remote areas. Also, satellite fits well in verticals like oil and gas or construction, where the work locations are temporary. Satellite is ideal for data networking. Also, it’s ideal for one-to-many content distribution and digital signage in retail environments or advertising-heavy enterprises.

“There really isn’t one sweet spot,” said Sam Baumel, assistant vice president of channel sales for the SMB market at Hughes “We have everything from poultry farmers with 15 locations, delivering data from those operations to HQ, to one business with two locations literally across the river from each other. The trees and water make for a non-line-of-sight situation, so microwave is out.”

Satellite Sales Partners

Satellite providers increasingly are turning to channel partners to tap accounts. For instance, SkyPort actively is pursuing agents, which are paid a monthly recurring commission and a percentage of equipment revenue. It also targets resellers, which buy wholesale from SkyPort, mark up the service and performing billing and Level 1 customer service. “In both cases, we do the installation, configuration, setup and acceptance testing,” Polmar said.

For its part, MSV sells through a dealer network, and also has an alliance partnership with the Sprint-Nextel Corp. emergency response team and corresponding channels. MSV dealers make margin on hardware and monthly recurring commission on the service. “Dealers themselves will go in and sell the equipment, then hand the customer a contract,” said Corry. “The majority of them are two-way radio dealers, so this dovetails nicely with the business they’re already doing.”

The opportunities are evolving in the market, according to Baumel. Hughes traditionally has sold residential services and a large-enterprise suite of customizable options. Now, it is branching into the middle market and looking to channel partners to get it there. In March, it signed its first master agent, Microcorp.

“The interesting thing is, it’s a perfect complement to their existing skillset,” said Baumel. “It’s a consultative sale that requires understanding the needs of the customer and how satellite will support the app that the customer is driving. It allows you to sell to locations you’ve never been able to sell to before, like mining companies that have a remote strip-mine operation.” Hughes takes care of connecting the satellite dish, activation and customer care. Baumel declined to reveal specific compensation figures, but did say that it’s a “blended” approach with referral compensation plus other elements.

Satellite Sales Skills

Despite the efforts to make it easy to sell, satellite does take some training; Marro, who said his firm has an opportunity to present satellite once or twice a month, said the complexity lies in design and engineering; specifically, the need to correctly size the bandwidth and to design applications. “Agents might know everything about PRI and, unless they’re special, probably don’t know a lot about satellite,” he explained. “Bandwidth isn’t as available in outer space as it is here. A lot of companies overbuy terrestrial bandwidth because it’s so cheap, and they can get 10 megabits for $1,200 per month. But with satellite, data is pricey. You have to fit the amount to the application and make sure you’re selling the right thing.”

Polmar said companies essentially pay for what they get. “Some of the SOHO satellite services are very price-competitive but are highly contended and highly shared,” he explained. “Or, you can pay much more for a private link. We have a few different services and we publish the contention ratios. [It] depends on the application and the budget as to what you sell.”

SkyPort offers a training program via video conference or on-site, “which is a little about the technology, and a lot about apps and how to do the sale,” Polmar added.

Looking for More?

Executives from SkyPort Global and Hughes Network Systems will be featured speakers in a panel discussion, Successfully Selling Satellite, at 4-4:50 p.m., Monday, Aug. 18, 2008, at the Channel Partners Conference & Expo in Boston.

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