Verizon, AT&T Are Changing Up The Carrier-Partner Sales Model

The relationship is warming up between carriers and solution providers. The traditional agent model between the two is morphing into a true reseller partnership, with partners doing the billing -- wrapping in their own managed services -- thanks to partner programs from the likes of AT&T and Verizon. Allowing solution providers to take ownership of the billing relationship rather than just acting as an agent is critical to driving sales growth, solution providers say.

Verizon last week unveiled its strategy to leave billing in the capable hands of its channel partners. Under the Verizon program, all of the carrier's more than 1,000 partners can bundle Verizon services with their own managed services under their own brand.

Verizon is winning plaudits for its new program. But AT&T had a partner breakthrough of its own two and half years ago when the carrier rolled out a co-branded Partner Exchange Program for solution providers that could handle the billing themselves. The program now enables more than 350 solution providers to do the billing for AT&T services.

[Related: As Cloud Rolls In, Partners Should Transition From VAR To Value-Added Service Provider]

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Other carriers will have to follow the path these telco giants are paving for partners if they want to meet the needs of more customers, solution providers say.

"Going through multiple bills takes up tremendous internal resources for customers, and from our perspective, it's something that can be replaced by having a single vendor and bill," said Max Silber, vice president of mobility for MetTel, a New York City-based solution provider. "It's a more streamlined way of doing business, and ultimately for [partners], it means we can provide more value and savings to our customers."

AT&T Partner Exchange was launched by Brooks McCorcle, president of AT&T Partner Solutions, within the first 90 days of her appointment to channel chief, a major breakthrough at the time.

Unlike in Verizon's program, however, AT&T partners have to feature the AT&T brand on their solutions. The program allows partners to create co-branded bundles, with no restrictions regarding who they can sell to, said Sue Galvanek, vice president of AT&T's Partner Exchange.

"We put partners in the driver's seat from Day One -- they can do contracting, billing and support for their end users," Galvanek said.

MetTel wraps its own services -- like security software -- around AT&T's services. The AT&T brand is reflected in the bundled offering from MetTel, but it's often an important selling point for customers, Silber said.

"People are very specific about which carrier they like in their area," he said.

The Partner Exchange program was created based on feedback from partners. But in order to help them tap the recurring revenue stream, AT&T needed to give its channel access to tools and programs to ensure they could support their own end customers, according to AT&T.

"It's one thing to say they can own billing, but another thing to make sure they have systems and infrastructure to do that so they can own relationship," Galvanek said.

While any partner can join Partner Exchange, there are several requirements that the partner must meet, Galvanek said. "They must have some basic capabilities to consume this model and truly be a reseller, like billing capabilities. If they aren't there today, we have tools available that can help them get there," she said. "It's a big shift and we want to give [partners] what they needed to be successful."

MetTel partners with several major telcos, and joined AT&T's Partner Exchange as the carrier's first partner for mobility services. From the first day in the program, MetTel has been able to resell AT&T mobility services on their own paper, Silber said.

Providing a "one-stop shop" for customers is important to MetTel end customers, especially when they're dispersed throughout the U.S., Silber said.

"We were doing this with other carriers, but typically this includes tremendous obligation in terms of commitment levels, and millions of dollars in billing before carriers allow you to get to that point," Silber said. "AT&T's Partner Program has opened up that space to more players, both large and small [partners] who maybe weren't offering telco services to their customers, and wouldn't have been granted access to billing."

MetTel's own billing portal allows the provider to blend AT&T's services with its own services and gives customers a single invoice.

"We are very fortunate AT&T gives us access to these services, but at the end of the day, we are making them our own," he said.

Still, not every carrier is comfortable handing off the billing piece quite yet. Some carriers believe that solution providers are more interested in selling IT-based services as opposed to network connectivity, and taking over the billing aspect is a risk partners aren't looking to take on if they can help it.

"I think the more it's an IT service, the more they want to rebill," said Craig Schlagbaum, vice president of indirect channels for Comcast Business during an Infrastructure Services Roundtable at The Channel Company's 2015 Xchange conference. "I think the more it's a communication service on a network they don't control, it's less material to them to rebill it," he said. "[Partners] also don't want to deal with the headaches associated with all those customers, and a receivable problem if bad debt occurs that they're then liable for," Schlagbaum said.

But programs like AT&T's Partner Exchange, and even Verizon's recent billing shift in favor of solution providers, are very attractive to the channel, said Mike Champion, executive vice president of Creative Technology Partners, a solution provider and AT&T partner.

"When we looked at the model that Brooks McCorcle and her team were creating, we felt as though they really listened to partners, that that has created a good working relationship. They built a model that is easy for us to operate effectively and efficiently," he said.

Norcross, Ga.-based Creative Technology Partners, like MetTel, was one of the first members of AT&T's Partner Exchange, and has been reselling the carrier's services for the past two and a half years.

When dealing directly with carriers, there are pain points that customers often run into, Champion said. Partners can put a high-touch business model around carrier services to solve some of those pain points, like provisioning or billing, he said.

"We are 100 percent in charge of the customer relationship. We have been able to develop a process consistent with the way [customers] want to buy carrier services. We are able to provide flexible terms that maybe don't exist from the larger carrier organizations," he said.

AT&T doesn't dictate prices for their services sold though partners, which gives the channel the ability to add margin on top of the price. For that price, end customers are also receiving value-added services from their solution provider.

Thanks to recurring revenue being driven from telecommunications services sales, Creative Technology Partners has seen more than 300 percent growth in sales since 2013, according to Champion. "I would expect by the end of this year, we will have grown by about 500 percent versus the previous year," Champion said.

MetTel has also seen a significant uptick in recurring revenue for mobility services, Silber said. "I hope that other carriers will adopt the same strategy, because it's ultimately successful and a better model," he added.

PUBLISHED AUG. 25, 2015