CLEC Frustration Part II

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

CLEC Frustration Part II

One reason that the ILEC's have been frustrated with CLEC's and spend so much effort frustrating their orders is due to the Lack of Value that the CLEC's -- in general -- bring to the market place.

Resellers, Rebillers, switchless, UNE-P, and the like add nothing to the ecosystem, except lower rates. And this has been the case before the Telecom Act of 1996.

Along comes VoIP and what's the first thing the Industry decides: Hey! Let's sell it for less than TDMSIP trunking, same thing.  How wholly unoriginal -- and lazy.

The original plan for UNE-P was that CLEC's would use it to build up a customer base where they did not have a switch to finance the purchase of collocation and a switch. It rarely happened. That's why when the TELRIC ruling came in and UNE-P went good-bye, hundreds of CLEC's gulped and lost their business.

Even now, they can't bring margin. Birch - a two-time (2002 and 2005 and almost again in 2008) BK player - just bought Cordia assets - " Included in the acquisition are approximately 55,000 business, residential and broadband access lines across 24 states" for $8M. Those accounts are valued at $145 each. No wonder Cordia filed BK.

The big problem for most CLEC's is they have no idea what their mission is or what their value is (other than I will save you 10% cha-cha-cha).

The successful ones -- not the big ones because Intermedia was the first $1B CLEC and also the biggest CLEC to HAVE to sell itself -- the successful ones, like Sonic.Net, Gorge.Net, Hunt Telecom, Cbeyond and Socket Networks, know not only what the mission is, but the Value they provide AND on top of that they know what they do NOT provide.

Rule number 1 in sales is not always be closing but always be dis-qualifying. Sales does not have the time or manpower to hang with every prospect. Sales needs to determine who wants, needs and can afford our services now.

CLEC's hate to say NO. Even when it isn't a good fit or they will lose money on the deal. Just say No! Quickly.

Key points for any executives:

  1. Know what services you make margin on.
  2. Know your Value Proposition to your marketplace.
  3. Know who your marketplace is.
  4. Focus on just that - providing high margin services to your targeted marketplace.


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