Michael “Sully” Sullivan, VP-Client Relations

When we discuss telecom services with clients, the topics regularly orbit closely around residential and business services, since these services are more common – they are much closer to our daily experiences and have a more direct impact on our daily lives. Regular mass marketing campaigns also serve as constant reminders of how direct-to-consumer internet and phone services fit into our lives as necessities, and they certainly are not wrong.

Behind these products, there is another component of the telecom business that tends to pass just under the radar, likely because it’s not advertised widely or interfaced with directly or daily. It is, however, just as important and can be an advantageous addition to your service landscape. This mysterious service sector is the Carrier and Wholesale business, and it could be a highly valuable addition to your sales strategy.  Below are a few questions I receive regularly, along with answers that help to demystify this subject and illustrate how it could likely work for you.

What is the Carrier & Wholesale business?  The working definition is a telecom services provider that sells network capacity to other providers. In effect, it’s purchasing capacity from a carrier or ISP (Internet Service Provider) to distribute to a pre-determined area for direct-to-consumer services.  In broad terms there are three major categorical functions that Carrier & Wholesale Services fall into:

  • Bulk purchase to be resold
  • Connections to provide a link between two networks
  • “Last mile” connections to reach a customer location where the purchaser has no owned network

Below are a few examples that fit in the above categories. It could be any one or a combination of these service scenarios:

  • Cellular and Wireless Tower Backhaul – data services delivered to the tower site for wireless distribution by wireless companies (Verizon, T-Mobile, etc.) or by Wireless ISP’s (WISP’s).
  • Long Haul Transport – long distance data transport (think interstate routes) to connect networks that may be spread over great distances
  • Point-to-Point Service – data service delivered directly to an end user
  • Dark Fiber – fiber spans between predetermined locations that have no electronics on either end. These are typically long-term leases or Indefeasible Right to Use (IRU) agreements.

How does the Carrier & Wholesale business work? Generally, Carrier and Wholesale services are the back-end machine that powers the residential and business services we use every day. There are several designated internet hubs around the nation, with sites in Atlanta, Dallas, and Chicago being three of the largest and most geographically accessible.  Internet is purchased at one or any combination of hub sites and delivered or “transported” to the purchaser’s network at a pre-determined destination handoff.  There is a very good chance you are reading this article utilizing internet that came from a hub hundreds of miles away and that traversed more than one company’s network to get to you.  Though you may pay one service provider for your service at your home, it is likely that they are working with more than one other service provider to connect all the dots back to you, the end user.

What is the opportunity for my telecom business?  Knowledge is power. Knowing how this side of the business works can be a great strategic advantage to you regardless of which stage of the business you are in currently.  Some key features that distinguish the Carrier & Wholesale business from the other segments are:

  • Cost Savings:
    • The ability to negotiate rates and take advantage of creative solutions provides real, and often large amounts of cost savings to you.
    • Buying in bulk saves money. Knowing how to purchase bulk IP, and where to purchase it from, can present another substantial cost savings for you.
    • Access to Tier 1 Providers – These hub sites feature access to carriers designated as Tier 1 – meaning they own and manage all their routing and switching and access every other network in a duty-free peering arrangement. This means higher quality of service and cost savings to you.
  • Revenue Development:
    • Longer term contracts mean longer term revenue – Most carrier services feature contracts that regularly hit averages around the 5-year mark. In some cases, like dark fiber IRUs specifically, the contracts can go out to 30 years.
    • Sales Pipeline Growth – Access to massive national account holders who may need last-mile connections in your area is a common feature of the Carrier & Wholesale business.

The Carrier & Wholesale business is long-term and relationship driven. And while there are some inherent complexities to navigate, this segment can be a very nice addition to your revenue and expansion plan.  Experience in navigating this space matters.  The key to getting you connected with the many advantages from the Carrier & Wholesale space is having the right partner who already has the relationships and who understands this business and its processes. Leverage is an experienced and connected partner that will get you there faster.