Story image

2degrees isn’t a challenger brand in wholesale market

25 Mar 15

In reading the press yesterday around the acquisition of Snap by 2degrees, I saw the term ‘challenger brand’ thrown around a lot, and I found myself wishing that 2degrees had sought to be a challenger in the wholesale business market.

It is no secret that they have struggled in the business space and that was no doubt a large driver in their decision to buy their way into the fixed line game. They could have been doing other things to improve their position a lot earlier though. Years ago, I made contact with 2degrees to try and find a way to market a worthwhile wholesale mobile service, but I received something along the lines of “we aren’t ready for that yet, check back this time next year.” Business moves faster than a vague ‘maybe next year’ approach and we moved on to other options and other priorities, and never heard from them again.

We have subsequently worked with some individual enterprising 2degrees sales staff to find adequate solutions for mutual clients that have kept Spark and/or Vodafone bundle offers at bay, but I would certainly not say that their solutions have been particularly ingenious or proactive.

What I think 2degrees should have done was:
    •    Allow us to sell at their retail price while making a small but respectable margin on services sold. 10% is a reasonable margin both to give and receive for partners on each side of the wholesale table.
    •    Sell the service in such a way that enabled us to route mobile data through our own gateway and therefore make mobile data on net. This allows a provider like us to make an outside service our own and provides added value to customers buying it from us as it could be integrated into their existing connectivity platform and have supplementary services such monitoring and networking applied.
    •    Remove minimum purchase levels as a condition of a wholesale agreement, or at least make the minimum number viable for

ISPs such as DTS and our contemporaries. My experience has been that Spark wholesale have a requirement for wholesale clients to commit to purchasing thousands of services, which is not realistic within a short period.
    •    Remove excessive training/set-up costs such as those imposed by Vodafone.
    •    Give access to white labelled billing platform with API for B2B integration
    •    Provide wholesale resource for pre-sales assistance and training.

I know the margins are tight in mobile – they are tight everywhere – but making themselves the wholesale supplier of choice for NZ business ISP’s would have built them a substantial sales channel and helped gain them key market share.

Instead, they worked closely with Snap, and tinkered around the edges with other ISP’s such as DTS in a an attempt to push for a share of the status quo.

It is now obviously harder for me to envisage working with them as we have been, but I would welcome any attempt by them to adapt the model outlined above.
 

Brendan Ritchie is the CEO of DTS, a business focused ISP that has been supplying clients across Australia and New Zealand with internet, voice and tailored WAN solutions since 2002. Tweet him on @bcarmody.

Disruption in the supply chain: Why IT resilience is a collective responsibility
"A truly resilient organisation will invest in building strong relationships while the sun shines so they can draw on goodwill when it rains."
The disaster recovery-as-a-service market is on the rise
As time progresses and advanced technologies are implemented, the demand for disaster recovery-as-a-service is also expected to increase.
Apax Partners wins bidding war for Trade Me buyout
“We’re confident Trade Me would have a successful standalone future," says Trade Me chairman David Kirk
The key to financial institutions’ path to digital dominance
By 2020, about 1.7 megabytes a second of new information will be created for every human being on the planet.
Proofpoint launches feature to identify most targeted users
“One of the largest security industry misconceptions is that most cyberattacks target top executives and management.”
What disaster recovery will look like in 2019
“With nearly half of all businesses experiencing an unrecoverable data event in the last three years, current backup solutions are no longer fit for purpose."
NVIDIA sets records with their enterprise AI
The new MLPerf benchmark suite measures a wide range of deep learning workloads, aiming to serve as the industry’s first objective AI benchmark suite.
McAfee named Leader in Magic Quadrant an eighth time
The company has been once again named as a Leader in the Gartner Magic Quadrant for Security Information and Event Management.