3 Reasons I Get a Rash from my Industry

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

3 Reasons I Get a Rash from my Industry

Actually, I don't get a rash from the Industry but from a large portion of the people in my Industry.

There are so many changes happening right now - every where. Our Industry is experiencing so many factors: declining prices, hyper-competition, anti-competitive actions, forbearance, Net Neutrality, and so much more.

Agents are locked in their business model and don't want to step outside the comfort zone. All growth happens when you are uncomfortable. 

Too many new things to offer your clients that are so NOT TDM: managed services, data back-up, message archiving, Hosted PBX, SIP Trunking, Energy and Natural Gas and The Cloud. The funny thing is that many people in the Industry still don't understand SIP, VOIP or MPLS, so the Cloud is going to really knock them for a loop. But let's not forget that salespeople don't take training because they know everything.

But right now, the same way of doing things that worked from 1996 till now, won't work going forward.

This goes from telecom employees as well as Agents. I have seen many channel managers and account managers who don't know jack about what their employer sells.

In the 80's, most of the Fortune 5000 hoisted training upon its employees. In fact, there were a number of companies that had excellent sales and management training that was competitive to get into. IBM, McDonalds, Xerox to name a few.  Today, companies have cut the training dollars. There is still product training, but very little management and sales training.

Our Industry used to sell on Value; now it's all commodity services sold on price (cellular voice and data, broadband, T1's). Notice that the best deals on DSL must be purchased online. Eliminates the overhead.  Transactional sales are still happening mainly because that is the structure that has been in place for years. It's what is known. No sales training.

Metro Ethernet is starting to sell, more because of the limits on T1 and the perceived speed. By that I mean, the market talks about 3G and 4G speeds, 6MB DSL, 50MB FiOS, 100MB DOCSIS 3.0, so what telecom buyer wants a T1 at 1.5MB -- even if that is probably enough for most businesses. Add to that the depression going on in Metro Ethernet pricing and you can see why it sells. (10MB used to be about $1200 with a loop; now it's about $900 -- and some CLEC's sell it for even less!)

Look at Bandwidth pricing: HE and Cogent have dropped the rates so low, you would think that everyone was in a telecom hotel shopping for a GigE port! Unlikely! Most still only want FastE but now they want a 100MB commit on a GigE port at GigE port pricing. The Industry is undermining itself. How many GigE ports do you think you can sell?  How many of those do you think will be in a Lit building?

And according to a recent FCC study, consumers aren't getting but half the advertised speed! But wait! It's all "best effort" or "up to". Marketing dribble. No wonder cable is winning.

Notice that many of the INC 5000 telecom companies are, wait for it, Hosted PBX companies. Integra, FiberLight, Host.Net and Telx are notably different companies. Fiber, Cloud, Collocation. Three big buzz words right now.

Meanwhile, the ILEC's have laid off so many workers that installations and repairs are often delayed. PF! The domain knowledge necessary to keep the telco house of cards intact is missing. The only jobs I want to see outsourced next are the C-Level ones!

The only innovation comes from the handset makers - Apple, Android, Samsung, HTC. The gear makers should be doing some R&D but the stimulus debacle almost caused disaster there - with spending all but suspended while companies waited for government grants. (And the NTIA and RUS screwed the pooch by taking so freaking long to hand out the grants. So long in fact that Congress has been re-purposing almost $1B for other expenses like the war.)

The Duopoly is again lined up against the FCC. Ah, Net Neutrality. If only anyone understood it. If only, just once the ILEC's would actually help America instead of hurt it. We need broadband. It stimulates the economy. Our service job culture is transforming more and more into a Freelance society. All these freelancers need broadband to connect to job databases, social networks, and customers (the W-2 term is employer, but more and more the W-2's are 1099's under a contract).

Freelancers are what Agents are. You sell, you get paid. On to the next prospect. With prices dropping, Agents have to sell more and more to make less. Mobile broadband is a must.

Best discussion about this comes under Broadband is a Utility and Common Carriage regulation is the right way to go.

For all the griping that goes on, Agents only want to organize to push back against the carriers. But even then, not so much. It's the business they chose, but most don't pay attention to it. Agents kind of remind me of ISP's. At one time, there were over 7000 independent ISP's in this country offering Internet Access to a majority of America. The Independent ISP's were the ones who introduced dial-up to every corner of the nation and then foisted DSL on to the marketplace. Once the ILEC's got in the game, it started changing. But no one was really paying attention. Business models didn't change. New skills weren't added. Strategic partnerships were't made. Instead, many sold out. The remaining ones today just got a swift kick in the groin by the ILEC's, but instead of getting mad and changing course, have simply said, "Thank you sir. May I have another next year?" I fear Agents will be doing the same thing, since carriers don't need you to sell stuff that they can sell via a website or a call center.

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