Picture Of Health

Barry Ward, Dealer Development Manager at Swains Voice and Data profiles his switchless reseller company and comments on the possible demise of 0870 revenue sharing.

Swains Voice and Data plc was originally formed in 1998 as Swains Telecom, a division of Swains International plc, a major UK photographic distributor with a turnover in excess of £25 million. In 2002 Swains Voice and Data plc was formed as a separate company. The business is growing at around 20% a year with a current turnover in excess of £5 million.

Barry Ward, “The company now employs 11 staff directly but we

have access to specialised teams such as accounting and marketing through the relationship with Swains International. Our model is based on solid business practice employed in the distribution channel, from our revenue share scheme to the fact our dealers retain control of their customers, everything we do is managed via the channel.

Challenges

“The business challenges faced everyday are similar to that of all business, balancing growth whilst ensuring the consistent high quality delivery of services. In order to meet the demand of new services such as VoIP we have to identify high quality partners with specific product sets which complement our existing business. There are many companies which are over promising and under delivering and this. The other challenges are training of the dealer channel to actively promote new products and services which are away from their traditional route to market.

We have relationships with five major carriers to be able to provide the widest range of services to the dealer channel. THUS, through their partnership with Demon, offer excellent data connectivity services, with Opal offering the best solution on inbound services. There are other vendors such as Siemens Solution 1 now providing data connectivity who are new but exciting partners. The Gamma IP Network also provides increased opportunities. “

Convergence

“Convergence is finally here and will develop further in 2006 with carriers upgrading their network and providing access over IP. Traditional Phone installers are having to look at changing their revenue streams to accommodate the new services. There is a large opportunity for dealers who have installed bases of IP PBX’s to begin delivering calls over IP and providing lower costings.

Will it be true convergence? Will the transition away from traditional handsets to CTI, and other services really take effect this year? I think we are still a couple of years away from mass market converged services and it will be the early adopters phase increasing in 2006. More companies will be looking to leverage the functionality of IP in terms of intersite trunking rather than full convergence.

Business Outlook & Plans

Our plans for the business are to continue to develop our core products through close relationships with carriers and partners for minutes and WLR. Throughout 2006 we plan to actively recruit new dealers to deliver ongoing growth, but not only traditional minutes dealers who want a better return, but also new companies such as IT installers and maintenance companies who have a strong understanding of IP.

Market Observations

Many of the promises which came from the carriers and vendors over the past 12 months have never come to fruition. 2006 will be the real year of VoIP and many resellers are not ready for that transition. I see a lot of confusion in the market regarding IP telphony and many customers and dealers still believe that VoIP is all about free calls or significant cost savings, rather than focussing on the functionality. This needs to be addressed in the short term through education of the end user market.

The traditional minutes market seems to have stabilised but there are many companies looking at exit strategies as margins reduce. More mergers and acquisitions will take place in 2006 resulting in larger, less reactive organisations. The introduction of WLR3 from Openreach in 2006 should open up existing traditional markets further so companies have to be careful not to abandon their core product sets.

The impact of the loss of revenue share from 0870 will potentially harm many resellers that are reliant on their revenues, with many companies being forced to look at alternative revenue streams, such as LCR and lines etc. to offset the losses. This will potentially mean an uplift in reseller activity in the marketplace during 2006. Swains provide non geographic numbers as part of a solution so the impact on overall revenues will be relatively small, but it will still require managing carefully. Ultimately for the consumer any cost saving will represent a significant benefit but the confusion over charges I feel is overstated and any changes need to be well publicised to avoid further confusion in the marketplace. The education process of the existing customer base and possible migration to 09 numbers where required will be an ongoing process but it is an opportunity to introduce additional products and services. Ofcom should look at introducing a lower price point for a specific 09 number range with a revenue share to owners to directly replace 0870 numbers”

Trainning & Accreditation

Swains are ISO9001:2000 and Investors in People. Swains are business partners with BT Wholesale, Opal Telecom, THUS Telecom, Gamma Telecom, Cable and Wireless, Network Partners, Siemens Solution 1, X2 Communications.