Vendor Q&A Provides a Window into the Future

The buzz in the meeting room was palpable as attendees got ready to hear from the participants in the show’s biannual Vendor Panel. Always a forum for stirring up dust, this year’s panelists gave valuable insight into what to expect in the next few months.

The panelists were:

Don Green, senior director of marketing and distribution marketing, Sprint Corp.’s Global Markets Group

Sherman Henderson, president and CEO, Lightyear Communications Inc.

Randy McNeal, general manager, eMeritus Communications Inc.

John Melick, co-president and COO, Primus Telecommunications Inc.

Dan Moffat, president, CEO and co-founder, New Edge Networks Inc.

Mike Ruley, president of market sales, XO Communications Inc.

Moderator Ted Schuman, president and CEO of master agent PlanetOne Communications Inc. kept things lively and moving, fielding questions from the audience and adding a few of his own.

The most heated discussion of the afternoon came with the discussion of evergreen clauses-those contract provisions that state the agent continues to earn the same commission as long as the customer is on the network. Sprint’s Green drew fire from Schuman as well as those in the audience for being the only panelist whose company did not offer some form of evergreen, official or otherwise.

"Our business model is such that we expect growth and commitment," he said. "We’ve found that if we don’t have a method for weeding the under-performing ones out, we lose — because we have an operational cost in our system for every agent partner. We’re looking for agents that believe in our vision-this is not perfect for every agent."

Nonetheless, Green didn’t rule out the possibility of Sprint offering evergreen in the future.

"We are continually evaluating and making changes," said Green. "We look at the competition and what agents expect, and every 9 to 10 months we re-evaluate."

Speaking of re-evaluation, Ruley noted that XO is in the midst of redesigning its agent program to include more revenue commitments. However, he says that if the agent renews his customer’s contract, he receives the same level of commission.

Hand-in-hand with talk of commissions came a discussion on partner profile. With many vendors turning to a sleeker, more targeted channel partner strategy, the comments were unsurprising.

"Sprint is looking for agents with extensive data experience that can bring a value-add that Sprint cannot provide," said Green. New Edge’s Moffat agreed, explaining that his company was looking for agents that believe in the company’s vision of better business broadband.

eMeritus’ McNeal noted he wants agents that can "handle both a voice and a data environment, and can be real partners." Similarly, Melnick said Primus looks for those that "don’t sell on price and can bundle a solution with enhanced services."

Finally, Lightyear’s Henderson said he wants agents that can commit to full-time maintenance, that get trained and that are willing to work with Lightyear on their accounts.

Another afternoon highlight was a discussion on rates. The subject, near and dear to everyone present, drew commiserating thoughts. The panelists noted price stabilization on long distance, but agreed that data and IP capacity continued to degrade in price.

"Until we get to IP, voice is at the cost floor," said Ruley.

Another hot question was the biggest challenges moving forward. An overall concern over the economy and the feasibility of expanding carrier infrastructure going forward, along with a need to expand customer and agent support, was the common theme.

"Expansion, growth and acquisition are the significant challenges right now," explained Lightyear’s Henderson. "But every single day you have to focus on the positives-it’s a challenge for any organization."

The panelists offered windows into their plans by laying out priorities in a discussion of what’s hot and what’s not. Local figured high on the hot list for Lightyear, eMeritus (McNeal also included call compliance) and XO, while IP services rule the roost for Sprint and Primus. On the outs? Hosting, calling cards, frame relay and long distance.

When asked if telecom had turned a corner, none of the panelists were willing to wholeheartedly say yes, considering the uncertainty surrounding the war, interest rates, the stock market and foreign investment.

"People are getting back to the basics of checkbook accounting," said Melnick. "Consolidation is still on the horizon and many people are evaluating their business plans. We just don’t know yet."

Several participants noted signs of improvement, however.

"We’re not out of the woods, but my banker’s eyes do light up sometimes now," said Henderson. "There are lots of positive people out there with positive thoughts, so we’re headed in the right direction."