Vodafone North America Business Turns to Channel, TSDs for Expansion

British communications service provider Vodafone is seeking to drive upwards of half of its revenue in North America through partners.

The multinational telco has operated in the U.S. since 2015, but Vodafone North America is nine months into a concerted push to rely more on the channel in the U.S. Specifically, Vodafone is increasing its footprint with technology services distributors (TSDs), value-added resellers (VARs) and system integrators (SIs). The provider is currently generating about 20% of revenue through indirect sales in the U.S. and is aiming to grow that number to 50% in the upcoming years.

“It is over $100 million that we’re looking to do,” said David Joosten, director of Americas and partner markets.

Vodafone had previously partnered with the B2B marketplace provider AppDirect since 2015 for its own digital platform in Europe. However, they have expanded the relationship to put Vodafone on AppDirect’s line card, allowing AppDirect’s technology advisors to refer the vendors to customers for a residual commission. Vodafone has also signed an agreement with Avant and is eying other TSD partnerships.

Vodafone’s David Joosten

Joosten, who leads Vodafone Business in the United States, Canada and Latin America, said the vendor previously used direct sales as its predominant go-to-market motion. The channel could only engage with a little more than 100 U.S. accounts, he said. Now Vodafone is tapping into a larger range of customers as a result, he said.

The channel expansion comes at a time when telcos are figuring out how they want to resource their go-to-market efforts. For Vodafone, which is shedding 11,000 employees globally over the next few years, the channel can help scale their expansion in younger territories like North America. That’s especially so in a competitive hiring market like the U.S.

“Finding different indirect go-to-market channels for us is economically much more interesting and gives us much more scale than through a direct sales force,” Joosten told Channel Futures.

However, turning to the channel requires a shift in the types of deals a company like Vodafone would normally pursue. Moreover, the company had to pivot to more quickly onboard and process those expanded use cases, he said.

“Typically as an enterprise business entity that we are, we do big projects. And now we are starting to get smaller types of activity in, like one to five circuits. A bit more things that we in the past wouldn’t have signed on to. So we had to change our processes and our delivery engine to be a bit more agile than it used to be,” he said.

Fixed Opportunities and IoT Opportunities

Joosten said Vodafone doesn’t desire to play in the same swim lane as domestic ILECs like AT&T and Verizon, who are going after large connectivity contracts within the U.S. Vodafone instead is building its value proposition on connecting multinational U.S. customers to parts of its global network backbone or giving them mobile and IoT connectivity in different European countries.

Joosten said much of the opportunities coming through Vodafone’s channel pipeline so far stem from the fixed side. That includes both circuits and several SD-WAN deals, he said.

He said that in the future, however, Vodafone hopes to drive more on the IoT side. Joosten said Vodafone is currently activating approximately 10 million SIMs per month, with strong presence in automotive, manufacturing and health care. However, more channel leads are coming in to Vodafone for fixed network, he said.

That’s not to say the demand doesn’t exist. One prospective TSD partner, for example, recently told Joosten that they’re seeing a sizeable number of IoT leads. However, that TSD and its partners had to turn down those customers.

Joosten said the technology advisors (agents) that leverage TSD contracts will benefit from increased simplicity. To that end, Vodafone is working on bringing a bundled offering to the channel. In addition, Joosten said some partners need more education on how to position IoT solutions. It may come down to getting trained on buying personas. Those buyers typically come from the lines of business, rather than the IT department, he said.

“I think it’s up to us to simplify the offering and probably do a little more training on how they can activate it and who the people are that they need to go for,” Joosten said.

Channel Futures has been examining trends in the connectivity channel. Vodafone joins a growing number of non-U.S. telcos who are turning to the TSD community to grow in North America.

At the same time, many service providers are weighing the merits of implementing self-service digital marketplaces that end users – particularly SMBs – can directly leverage.