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TELCO INTERNET MARKETPLACES POISED FOR SUCCESS
July 10, 2000
By Cindy Dubin
Sites Are Uncomplicating Customer Purchasing Decisions
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Industry insiders have set their sights on two telecommunication e-marketplaces that have distinguished themselves by easing customers' buying decisions. TeleBright.com, based in Rockville, Md., recently was named to the dbusiness.com "50 to Watch," a list of the most dynamic 50 emerging private and public small- to medium-sized companies in the Washington area. TeleBright.com, which only launched a few weeks ago, provides free analysis and assistance to small businesses seeking to compare and buy telecommunications services. The marketplace lists plans and services from close to 50 leading providers, allowing businesses to customize their search and choose the plans that best meet their needs.
"We are the only site that gives the customer instant access to savings assessment because we have all of our provider members' calling plans in our database," explains Chet Thaker, president and CEO of TeleBright.com. "Other sites rely on a request for proposal approach, acting as the middleman by taking customer requests to the providers and e-mailing the customer with a provider's proposal."
Thaker says that TeleBright.com relies on proprietary technology, called IntelliRate®, to analyze a customer's potential telephone bill. "If the customer knows the number of minutes he talks, the number of calls he makes and the time of day when those calls are made, we can calculate, at no cost, what their monthly telephone bill will be, depending on which carrier they choose."
Unlike TeleBright.com, telezoo.com, which was just named by Forbes.com as one of the top five B2B telecommunications Web sites in the world, offers buyers a chance to comparison shop, but the actual purchasing is done offline. Says Elias Shams, chief zookeeper for Arlington, Va.-based telezoo.com, "Telecom is too complex to buy and sell over the Internet. Those are purchases that need to be done one-on-one with the supplier."
The Beauty of E-Marketplaces
In addition to offering obvious benefits to customers, Thaker believes that TeleBright.com offers carriers the opportunity to reach a source of customers and convert those leads into sales quickly and inexpensively. And, if a carrier wants to change its rates or introduce a promotion, TeleBright.com can update its Web site to reflect those changes overnight.
Speed to market is just one benefit telecom providers derive from e-marketplaces. According to a recent survey of 50 global 2,500 companies by Cambridge, Mass.-based Forrester Research [FORR], firms cited the ability to negotiate better pricing, reduce transaction costs, and reach a broader range of customers as the primary benefits of e-marketplaces.
Simon Yates, an analyst with Forrester Research, says firms are charging forward with e-marketplace participation. According to Forrester's data, two-thirds already do business over the Web through e-marketplaces and the rest plan to join within the next year.
Despite the benefits, 28 percent of respondents to the Forrester survey indicate less than 10 percent of their business is transacted through e-marketplaces each year. Only 4 percent conduct more than 50 percent of business via e-marketplaces on an annual basis.
It Comes Down To Brand Recognition
No matter how long it takes telcos to conduct business via the Internet, customers are definitely interested. And surprisingly, they are not shopping online to reduce costs, but rather to find quality products.
Both Thaker and Shams agree that e-marketplace customers are not basing their local and long-distance decisions merely on price. "Brand recognition is definitely more important to customers than the lowest-cost provider," says Thaker. "And because the customer has access to side-by-side comparisons, they will automatically see what premium they will wind up paying for a nationally known brand vs. a new provider."
"Telecom is a very complicated area and customers are spending millions of dollars for equipment, which makes quality a No. 1 priority," says Shams. "Pricing is definitely last on their mind."
What Benefits Do You Expect From E-Marketplace Participation?
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Cost Reduction |
54% |
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Automation of business processes |
42% |
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Broadening of customer reach |
36% |
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Greater accuracy |
20% |
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Increased productivity |
16% |
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Improved customer relationships |
16% |
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New revenue |
12% |
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Standardization |
6% |
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Source: Forrester Research
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