CLECs may have spent a lot of 2010 bulking up their respective wireline fiber-based networks and service sets, but one service they will either consider or add to their business service diet in 2011 will be mobile wireless services.
But don't expect any of these CLECs to go out and plunk down billions of dollars to buy swaths of spectrum to compete with the deep pocketed wireless operators. Instead, what you'll continue to see is CLECs creating reseller relationships with the well-established wireless operators to incorporate wireless as part of their respective service portfolios.
Already, a number of CLECs, including CBeyond (Nasdaq: CBEY), Lightyear Solutions (OTC BB: LYNS.OB), and privately-held TelePacific have added mobile services to their SMB service bundle portfolio through reseller relationships with nationwide wireless operators Sprint and Verizon Wireless.
Wireless operators are more than happy to oblige with their services. Sprint Wholesale, for example, last year launched a Mobile Broadband On Demand prepaid wireless data product that lets MVNO or traditional CLEC customers provide prepaid mobile broadband services on a by the day, week, month or even by the megabyte.
Adding wireless to their service portfolio is a compelling proposition for both CLECs and their SMB customers.
By establishing a reseller agreement with an established wireless operator, the CLEC can instantly enhance and differentiate their SMB service portfolio with a service package that plays into the mobile nature of SMB segments such as the local insurance adjuster who needs instant data/voice access to process customer claims in the field. What's more, CLECs such as TelePacific has positioned their wireless voice/data offerings as a disaster recovery data backup service option for their wireline-based services.
Unlike large enterprises that are comfortable handling multiple wireless and wireline contracts, SMBs lack such resources. An SMB that has an established relationship with a CLEC that decides to offer wireless gain not only the benefit of a nationwide voice and data access through the wireless partner, but also a simplified bill.
While the idea of wireline-based CLECs offering wireless services is still arguably a growing trend, CLECs looking to add another point of differentiation to battle hungry cable MSOs targeting SMBs will need to consider.
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