Nortel partners with giant US cableco to expand SMB sales in North America

Nortel Networks is teaming up with Cox Communications as part of a new strategy that will see cablecos reselling Nortel products and services to their business customers. The agreement, announced at the 2008 NCTA Cable Show, will establish Nortel's first Small Business Center in North America, opening new channels to expand sales of the telecom equipment maker's hybrid IP PBX products.The partnership makes Cox the first major incumbent cableco to bundle telecom customer premise equipment with its own voice and data services. "We are giving Nortel a predetermined target list of data customers," Cox spokesperson Todd Smith tells Network Letter. "And if our existing sales team uncovers an equipment opportunity in our accounts, then we will bring in our counterparts at Nortel."The emphasis will be on premise-based VoIP offerings in the SMB space: Cox has more than six million customers in the United States, of which about 240,000 are business customers. From a product perspective, the partnership will focus on offering Nortel's Business Communication Manager (BCM) 50, which is best suited for businesses with three to 50 users.In a meeting with NL at the International Nortel Networks Users Association (INNUA) conference in Dallas this week, Nortel's VP for marketing in North America Net Payne noted that Nortel is in talks with other cable companies for similar partnerships, but wouldn't elaborate on specific markets or whether a deal with a Canadian cableco is in the works. "If you look at the cable market, the companies are disciplined in how they roll out existing services, from television, to Internet, to phone service for the residential market," he says. "As a result, although Cox is our first cable partner, we expect there will be more." The partnership will be driven by an outbound telesales team in Atlanta. These people will be calling as representatives of Cox Communications, but will in fact be Nortel employees, or employees of a call centre firm contracted to Nortel."Our callers are very focused in terms of execution," says Payne. "They will be offering the broad SMB portfolio, though it will be the BCM 50 that will have obvious appeal."It looks like a good fit: Cox offers up the channel, and Nortel drives unique product value and market knowledge."Nortel's expertise in the SMB space was attractive to us," says Smith. "About 70% of our business customers have less than 20 employees. We can see the value in Nortel's equipment capabilities, and also the need from our customers' perspective."And, though this is an important deal, Cox represents only a small part of what could be a major opportunity for Nortel."There are seven million businesses with fewer than 20 people in the US," says Nortel's Payne. "Cable companies can use us as part of long term opportunity to move up market. This is not just about connectivity, it's about being able to offer additional features and functions to business customers," he says, adding that Cox has a solid fibre backbone that's conducive to VoIP. Nortel will begin outbound calls at the end of June in Kansas and Northwest Arkansas with at least two additional markets coming online by the end of the year. The systems are simple enough that field technical implementation and support isn't considered a major hurdle. Nortel has premise-based sales coverage across the US, but either company might be involved in the install. "Only 10% of the businesses in this market have designated IT staff, or even an IT person," says Payne. "We are selling into these companies all the time, and geography isn't a hurdle with telesales. What's unique is the deepening of a partner relationship with a cable company like Cox."And what's unique for Cox is to have the equipment in place to sell richer, bundled services."We can go in and get additional business - there is a huge benefit here," says Smith. "Now we have equipment in our portfolio, and it's a trusted brand."

Nortel partners with giant US cableco to expand SMB sales in North America

News | June 5, 2008

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