Thursday, March 24, 2011

What Does Continued Mobile Consolidation Mean For The Channel?

The big talk at CTIA is the pending acquisition of T-Mobile by AT&T. Most of the discussion is about the impact on consumer choice, hardware suppliers, and wireless technologies. But there’s another dimension. T-Mobile has a robust set of programs for channel partners, resellers, affiliates, and retailers. What will happen to those programs and the participants? If AT&T’s past approach is any indication then it is likely that many will be consolidated into AT&T programs, some will be discontinued, and many participants will be groomed out. “Groomed out” is a euphemism for “left out”. It should be clear that if your business currently generates significant revenue from selling telecommunications services that industry consolidation is probably not a good thing. You’ll have fewer options of services to sell; customers will have fewer choices to navigate; carriers will have fewer competitors so commissions are likely to decline; and product and service innovation is likely to slow. So what should you do? Wake up and smell the coffee!

Continue to sell telecom service if you must but see it for what it is – a means to an end. That end is the applications that users run over those telecom services. Leading consumer applications are largely free and advertising-supported and the ones that cost money are sold directly through app stores (if I can use that term generically and not get sued [,0,5609580.story]) controlled by the dominant players. But business applications – particularly applications for small and medium-sized businesses – represent a massive and available opportunity. If you currently sell T-Mobile devices and services to businesspeople and businesses then you should immediately begin investigating applications, like InPhonex’s Televate, that you could start offering to your customers. That way if in a few months you get a “Dear John” letter from AT&T it won’t be such a blow.

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