relationship, such as cable operators or ISPs. The service pro- which means that we manage all of their commissions, pay-vider does the marketing to their own customers.” ments, coop advertising, merchandising and so forth.”

“There are advantages for the customer to get voice as part “Building a catalog of products is important as we go to of a bundle as opposed to buying it as a standalone product national retailers who can now buy from one place–us–a in a retail store,” says Span. “A standalone service will suf- company that’s built a catalog of best-in-class products from fer from a higher level of churn than a bundled service. In around the world. We’re also just getting involved with web general, the cable operators and broadband service providers sales. Our agents can get online, choose a product and pay will also enjoy higher revenue per user on a monthly basis and manage their relationship with us at Brightpoint.” because they can offer multiple services across that platform.

Therefore, they’re not driven solely by price. It’s a winning combination.”

Masters of the Master Agent Model

Brightpoint also favors channel sales, though they have a broad approach. David Brown, senior VP of Brightpoint’s Advanced Wireless Services Division, says “We’re a wireless-centric distributor/service provider.”

“We basically follow four business models,” says Brown. “One you could call traditional distribution, that is, we buy products from manufacturers, we take title to them and we sell them into the channels that the manufacturers don’t want to deal with directly. The second model is the master agent model. We have a base of more than 5000 independent wireless/cellular agents who we sell product to. We’re working on the consumer side with Sprint Nextel as well as Virgin

Mobile, and it also extends into the VAR space with both “There’ still a problem of driving a knowledgebase associ-Cingular and Sprint. Third, we have a product sales group ated with the VoIP category,” says Brown. “People still ask which sells into those channels I’ve mentioned. Fourth and me what VoIP is and how it works. We’re also dealing with finally, we have the advanced wireless services unit, which is wireless agents who in many cases are familiar with a dif-really built into the VAR channel.” ferent kind of model, such as a big commission type model,

“We’re very entrenched in the national retail space,” says and maybe even product subsidization. It’s a little bit like that Brown. “Name any electronic retailer–we’ve been doing busi- with Vonage, but Skype is different in that it’s a more vital ness with them for years. We have a base of more than 5000 product, it’s not a commission model that you take into the independent wireless/cellular agents who we sell product to retail channel. In fact, Skype is a product sale, so it’s treated along with Sprint Nextel and Virgin Mobile services as a mas- more like an accessory.”

“You’d think it was difficult to make money off of Skype because it’s basically free,” says Brown, “but soon stores will set up Skype sections. After all, there are 60 million Skype users, many in the US, which suggests to retailers that they should have product offerings on their shelves, such as USB phones or headsets.”

Brightpoint will host the Skype web store where consumers can order Skype accessories, paid services, and the upcoming prepaid Skype card, coming to retail stores across the US. “We’re also building what we call alternate channels,” says Brown. “These include points of sale at WiFi hotspots, university bookstores and copy/shipping retailers.”

 

Selling South of the Border

Greg Keough, is founder and CEO of DigiLinea, a broadband VoIP service provider that specializes in US-Latin American voice traffic.

ter agent. We’ve partnered with both Vonage and Skype from “Our offerings are very specifically geared toward serv-the service side. We launched our Vonage program for our in- ing the needs of Hispanic users wanting to call their rela-dependent wireless retailer agents in August 2005. It’s a com- tives and friends in their respective home countries, and vice mission model, much like the ‘cellular’ model that Vonage versa,” says Keough. “Our telecom licenses in various Latin employs. More than 50 people out there now sell it. The key American countries enables callers to use real phone num-to that product is that it’s a consultative sale, and those 50 bers. It also helps us to vertically integrate and provide prod-people manage every aspect of the relationship with retailers, ucts that people really want. Focusing on a niche has some