Telecom Services Agent Business Model Is Thriving

The telecom services agent business model is thriving, according to agent partners and industry executives gathered here for the Channel Partners Conference & Expo.

Quy "Q" Nguyen, CEO of Allyance, a Newport Beach, Calif., telecommunications agent, said his business is growing about 35 percent every quarter. "The mood is very positive despite the negative economy and the bad reputation of the telecom industry," he said.

Ted Schulman, founder of US Telebrokers, one of the most successful master agents in the country, expects his business to be up 70 percent this year after a record 2002. Schulman attributes the company's success to a commitment to the channel and an 11-year successful track record of delivering residual checks on time to partners.

Schulman hosted a vendor Q&A panel at the show, during which industry executives voiced support for the agent business model but noted that they are looking for agents to step up and offer more sophisticated solutions.

Randy McNeal, general manager of eMeritus Communications, said his company is looking for agents that can handle more complicated voice and data applications. He said eMeritus as an unknown brand is depending on the agents to "bridge" that gap for the company. "The agent channel today represents 95 percent of our business-to-business sales and is critical to our continued success," he said.

John Melick, co-president and COO of Primus Telecommunications, said his company is looking for agents that "do not simply sell on price but sell bundled solutions to the customers."

Sherman Henderson, CEO of Lightyear Communications, said Lightyear is looking for agents that are interested in being trained to offer the next wave of telecom technology. Lightyear is dealing with fewer part-time agents than several years ago and is working jointly with its top partners to close deals, he said. "We think all of our agents are our partners," he said. "We don't separate them."

Mike Ruley, president of market sales at XO Communications, said a lot of agent partners have evolved into voice/data service providers. He said one of out of every five orders XO receives is from the agent channel.

Sprint is looking for agents that can offer more value-added services, said Don Green, senior director of distribution marketing. "The single biggest change over the last few years is we are looking at somebody who has extensive data expertise and can bring some value-add to the relationship that Sprint can provide," he said. "Three or four years ago, it was primarily voice and a little bit of data. Now it is primarily data."

Craig Schlagbaum, vice president of channel sales at NTT/Verio, said he sees a convergence of the VAR channel and the traditional telecom agent channel. He said some of the agents are transforming themselves into full solution providers, while others are partnering with VARs to offer a complete voice/data solution.

"Solution providers are mostly focused on the sale of hardware and software, while agents are mostly focused on the sale of carrier services," he said. "There are very few that know both."