Next generation telcos focus on servicing Kiwi SMEs
By Jo Bennett Auckland, Wednesday, 20 August 2008
Real competition may only just be hotting up, but New Zealand already has a few next generation telcos.
Computerworld looked at four companies: Worldxchange, Digital Island, Zintel and BayCity Communications, all offering distinctly different services but emphasising the same key element - service.
Digital Island’s general manager, Blair Stewart, says SMEs are being poorly serviced.
“Only the corporates are on Telecom’s radar. They’re well taken care of, with tickets to Eden Park lavished on them.”
Meanwhile, smaller customers endure a mass market approach that doesn’t satisfy their needs, he says. Overseas call centres are one point of customer discontent but Stewart says that Digital Island’s customers aren’t directed to a “MySpace teenager in the Philippines” for service.
Zintel’s general manager, Lindsay Cowley, says his company’s customer service phones are manned by “people not machines” - and are based in Auckland, Wellington and Christchurch, not overseas.
Simple, transparent billing is another point of difference.
Digital Island explicitly says one of the keys to its success is its “focus on taking any confusion out of telecommunications”, while Worldxchange’s CEO, Cecil Alexander, says his company is extending its online billing service to allow users to micro-manage their accounts online - so there are nasty billing surprises.
In the rural market, BayCity Communications (BCC) general manager Duncan Boenic says users have been particularly confused by the complex offerings available, as they are early-stage users who have experienced either slow dial-up or no internet service at all so far.
While very different, all of the companies emphasise a “customer intimate” approach.
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Digital Island
Digital Island is four years old and targets the SME market, which, it thinks, is neglected by Telecom and TelstraClear as they focus on the corporates.
The Auckland-based business centres on reselling services that run on the two giants’ networks, says Digital Island GM Blair Stewart, has no plans to build infrastructure itself. Indeed, Stewart expects there to be a wholesale glut, particularly in tolls, as a result of government-mandated improvements in competition.
Stewart says the company works off an outsourcing business model. Its points of difference are two-fold: cost savings of 20% to 30% and the kind of personal account management Telecom reserves for corporate customers.
For example, a company may have a “fruit salad” of Telecom lines, Telstra tolls and ihug broadband. “We’ll bundle this up, with account management,” Stewart says.
The company handles everything but mobile, although its new $199 NetDepend internet guarantee service - for when an SME’s cheap but unreliable copper wire-based service falls over - switches over to mobile back-up.
“There’s no point in having great products if they are not the right price, or having the right product at the wrong price… What customers need is better service,” Stewart says.
Many clients, he says, are Baby Boomers and all they have known is big telco service.
“They don’t realise there are other choices out there and that small telcos are more likely to bring new products to market… You’re not going to find the ‘you never got fired for buying IBM mentality’ in the new telco space.”
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