Customers will soon buy their internet services from ‘trusted brands’ rather than traditional telcos, reports Heather Wright. Devoli aims to be the engine powering the brands’ services
In Karl Rosnell’s world if you have a trusted brand and loyal customer base, you have the makings of a service provider business – and a new way to increase stickiness and add revenue.
Rosnell, CEO of Auckland-based network automation and service provider Devoli, sees a future where customers increasingly buy services such as internet access from “trusted brands” rather than traditional telcos.
“People are reprioritising where they spend their money, based on who they trust,” Rosnell says. “In future, they’re more likely to spend their ‘internet dollars’ with brands they trust rather than having a traditional telco relationship. These brands will already be delivering a far higher level of value, and the broadband piece will become an attached component to deepen the value proposition.”
He cites Devoli customer, Stuff Fibre, as an example.
Customers get to purchase from a brand they know, trust and, dare we say it, enjoy dealing with (plus a single bill), while brands become stickier by providing more services, so reducing churn on traditional products.
Rosnell says it’s a massive “net new” opportunity. The Ministry of Business, Innovation and Enterprise’s last Broadband Deployment Update, covering the quarter to the end of December 2018, showed there were now 714,258 users connected to the Ultra-Fast Broadband network, and uptake was at 50 percent – leaving an equal number still to connect.
COMPLEX TO NAVIGATE
But the telco game is highly technical and complex to navigate. There is capacity planning, supplier management, backhaul and a myriad of other issues to consider.
Devoli though, has what it believes is the solution to enable brands, and ISPs, to outsource the heavy lifting.
The company, previously Vibe Communications, has flipped a portal it created to provide self-service for its traditional business-to-business customers, making it consumer facing and opening up a new market – the residential ISP segment. Increasingly, it is the engine underlying other brands’ offerings.
The Devoli engine takes the technical difficulty of being an ISP and wraps it in an “elegant” user interface, combined with business processes and consumable APIs (application program interfaces). In Rosnell’s words: “We automate the processes involved to within an inch of their being.”
Using “devilishly clever automation”, Devoli can provision the services of any of the local fibre companies.
“Our customers don’t have to buy infrastructure, learn tech speak or employ masses of people to set up and run an ISP,” he says.
“The Devoli Engine allows a brand to become an ISP, rather than the traditional telco/IT companies who have paved the way to date. The brand provides the loyal subscriber base and we provide the process, the network and automation, for a fixed cost per subscriber and no upfront cost.”
As well as adding relevance to their business, Rosnell believes this enables brands to take a leadership role – and experience all the associated warm fuzzies – in reducing the frustration around broadband connections.
With the automated provisioning and management across all Kiwi fibre companies, Rosnell says using the Devoli engine means there is no delay in receiving or processing orders. Customer orders are processed in real time as they are entered into the website.
It isn’t completely bullet-proof, of course. He admits there are bits outside Devoli’s control – if end-user customers pick an install date and aren’t there to let the fibre provider in, or if the fibre person doesn’t turn up, for example.
“These two things are outside our control. Everything in between is 100 percent up to us. We connect the end-user customer directly to the fibre provider and ensure the level of transfer of information is highly reliable and transparent.”
Rosnell says the company is being approached by a range of non-traditional players keen to bundle their products and services with the broadband network as it rolls out.
“Any company that has a brand and a loyal subscriber base, with the ability to talk to customers and have that message read with a pretty high degree of accuracy, now has the ability to bolt this service into their product mix.”
So, what is the process for setting up as a service provider?
According to Rosnell, it’s as simple as picking the products you want to sell. In Stuff Fibre’s case, it chose two offerings – 100Mbps or up to 1Gbps. Copper and voice services can also be added, with brands deciding on the bundles and pricing.
“Then, really, your job is marketing.
“We want you to tell your loyal followers that you’re now an internet provider and/or voice provider and you have this offering for $x a month, and here’s how easy it is to sign up.”
Devoli can handle the billing and service desk, or send a billing feed that maps into the brand’s existing billing feed, and train the brand’s internal support team on FAQs and the processes the team needs to follow.
“We have a model that is complete, but also has elements where if you want to own the billing relationship, or support it, you can. It’s highly bespoke or highly shrink-wrapped, depending on what bits you want to control.”
So, how many customers do you need to make it viable? Rosnell is cagey on exact costs, but claims the platform is workable, and provides a clean margin from the first customer.
“Every time you add a new customer you make a bit more revenue, a bit more margin.”
It’s not just brands Devoli is targeting. The highly competitive market, with downward pressure on pricing combined with increasing demand for unlimited plans, mean the ROI (return on investment) on running your own network can be “murky”, says Rosnell.
“Any ISP that has fewer than 10,000 subscribers is going to find it difficult to make money when the real costs of delivery are measured.
“It’s the combination of the physical costs of employing and managing people, coupled with the intangible costs of missed opportunity, when these people are tied up and therefore unavailable for higher value tasks.”