Agency - PointOne to Launch Agent and Reseller Program

Posted: 05/2001

Agency

PointOne to Launch Agent and Reseller Program
By Josh Long

PointOne Telecommunications Inc. (www.point-one.net) is turning to the telecom sales channel sector in hopes of making broadband IP services a force to be reckoned with in the small to medium-sized business market.

The Austin, Texas-based provider, which operates roughly 60 nationwide PoPs, including 20 core facilities in all NFL cities and most secondary markets, expects to capitalize on the existing relationships agents, CLECs and value-added resellers (VARs) maintain with businesses to reach the tens of thousands of small to medium-sized enterprises (SMEs) throughout the nation. It's a model that's winning support on Wall Street amid a more general slump in telecom investments.

PointOne's plans are based on the assumption that SMEs are inclined to purchase from CLECs, resellers and other indirect channels because they have been underserved by the incumbents and large telecom providers. Agents could sell the IP-based services on behalf of PointOne, and resellers could purchase the services at a wholesale price, branded under their own name, an executive said. The long-term plan: Deliver a suite of voice, video and data products and applications to enterprises and service providers. Getting the word out will require more voices than any direct sales force can supply.

"Economics dictate you are not going to be able to deploy ... paid sales people coast to coast," said Steve Braasch, vice president of marketing at PointOne Telecommunications. What's more, agents and resellers already have relationships with enterprise customers, added Barclay Doyle, PointOne's vice president of channel development.

Doyle expects to sign up sales channel partners in the third quarter of this year. The data products could include a bundled offering, such as unified messaging, IP LAN and hosted applications, but the company is still working on the packaging.

Doyle said he has spoken with VARs and CLECs about the sales channel program. VARs selling vendors' telecommunications products to enterprises are looking to move into service provisioning, he said.

In the regional CLEC space, Doyle said, reselling services on a network gives local companies a national footprint and links networks that a parent company owns. CLECs providing an Internet connection to ASPs can enhance the reliability of service delivery--avoiding the traffic hassles of the public Internet--by using a managed IP network, he added.

PointOne is delivering its voice and data products to carriers using second-generation infrastructure, Braasch said. The company uses Sonus Networks' softswitch technology, software that Frost and Sullivan analyst Elka Popova said is more flexible and much cheaper than a legacy network Class 5 switch. Braasch said the facilities-based provider would focus this year on ramping up voice minutes and deploying additional PoPs on the IP network.

In February, as more telecommunications businesses announced layoffs and bankruptcy filings, PointOne broke the mold by closing a $70-million debt-and-equity deal that wrapped up its third round of funding.

"Nobody is raising money, so that is very significant that they have access to capital in this market," said Vik Grover, CFA and senior vice president of Equity Research at New York-based Kaufman Brothers LP (www. kbro.com).