Comptel 2010: Quality, not price, is job one for wholesaler operators
After finally landing Monday night in Nashville, Tn., which caused me to miss a day's worth of meetings due to poor weather in Massachusetts, I found my way on to the COMPTEL Plus Spring show floor where I met with some heavy hitter executives in the wholesale carrier segment.
Coming off one of the worst economic recessions since the Depression, there was a sense of optimism in the air as all of the wholesale industry segments have set their sights on new opportunities, including IP data and, of course, wireless backhaul. Even with all of this optimism, I do think what will set apart one wholesale provider from the other besides size and scale won't be price, but customer experience and quality.
I say this because the show featured not only your usual suspect incumbent wholesalers (CenturyLink, Qwest, Sprint, and Verizon), but a growing list of competitive wholesalers (Covad, FiberLight, nitel, TTM, and TowerCloud) that are eager to take away business from the incumbents.
While you would think that all this new competition would make the incumbents scared, they actually see it as an opportunity. CenturyLink, for one, believes that what they are going to compete on is not price, but quality and customer experience.
"We have to have a differentiator and frankly quality is what sets us apart," said Bill Cheek, President of CenturyLink Wholesale markets. "I like to think of it this way: when you get to a small company we have resources that they don't have. As an incumbent, we can bring in technicians from other parts of the country if we have a hurricane hit whereas some of the smaller players that are focused on one region don't have."
Certainly, there are a lot of pieces a wholesaler has to put in place to maintain quality. Not only does the supplier have to satisfy the service provider customer, but also the end user. This is even more critical if the end-user is an enterprise customer or wireless carrier whose business depends on the connectivity or service they get and does not want to get into a finger pointing dispute over whose fault it was that the service went down.
A wholesaler's drive to maintain quality is nothing new. What customers loved in the old SONET and then later in the ATM, Frame Relay worlds was that whether you were a wholesaler selling service to another operator or to an enterprise was these services came with quality of service (QoS) and class of service (CoS) parameters and penalties if the operator failed to meet certain thresholds.
I think the challenge now is to apply these concepts to the new emerging Ethernet and IP worlds. Help is on the way via the Metro Ethernet Forum's MEF 26 specification, which defines phase one of the External Network to Network Interface (ENNI). The standard is designed to simplify the process service providers take to establish peering arrangements with other carriers when they go outside of their respective network regions to expand their Ethernet footprint.
All of this creates both a challenge and opportunity for wholesale operators. For the incumbent, it's an opportunity to show their customers that if you come to us we can not only give you the geographic scale you need, but a dedicated team that can rise to the occasion to resolve issues if a major disaster strikes or an outage occurs. At the same time, I think smaller regional wholesale players (cable, wireless specialists and regional wholesalers) can also sell themselves on their nimble nature and the fact that they can also respond quickly to needs.
Regardless of the size of the company, those carriers that can keep up service continuity and respond when there is a problem are the ones that will succeed in the eyes of their customers.--Sean