Daisy Group has backtracked on its plans to integrate O-bit Telecom into Daisy Wholesale after O-bit Telecom resellers raised objections.
The news comes as O-bit announced its move into mobile this week. The move leaves O-bit Telecom in competition with fellow Daisy subsidiary Daisy Wholesale.
O-bit Telecom was earmarked to be integrated into its rival Daisy Wholesale, following its acquisition by Daisy Group last February. However, O-bit’s resellers lobbied hard for the company to stay as a separate operation.
Elizabeth Sparrow, sales & marketing director at O-bit, told Mobile that during the period of consultation it emerged that O-bit’s particular entrepreneurial and business reputation was highly valued by its reseller base.
She said: ‘The sale created a lot of uncertainty among the resellers and some grumbling within the wider industry that merging the two companies would degrade the amount of choice in the market. So Daisy said, fine, let’s keep the two separate.’
She added: ‘One of our unique selling points is our software, which provides all the white label marketing collateral, the interface with customers, billing systems and so on. The resellers had really bought into that and to the team here at O-bit, so there was a lot of loyalty there.’
Sparrow said competition between Daisy Wholesale and O-bit Telecom would prove productive. ‘There is a danger that two competing companies within the same group can end up cannibalising each other, so the senior team is alert to the prospect of ensuring that does not happen.
‘A bit of healthy inter-company rivalry can be stimulating, however, and create further growth.’
Sparrow said that O-bit will continue to grow as it launches more teams like mobile and data, while still operating as autonomously as possible within the Daisy Group.
‘Mobile telephony is a natural fit as it enables us to look at the whole communications package and not just some elements of it. We can offer voice, data, broadband, SMS, VoIP, geographic and non-geographic numbers, software, global calling cards, conferencing solutions and now mobile. Clients can now take that all from O-bit Telecom.’
O-bit, which was set up in 2002, has aimed its products at internet service providers, telecoms resellers and IT services organisations to resell to SMEs. One of its strengths is its white label service, which allows resellers to market themselves under their own brand. O-bit has approximately 120 resellers and 170 virtual resellers.
‘O-bit Telecom has not moved into mobile before, as resellers want our white label solutions, which is an important factor for them,’ explained Sparrow.
O-bit is providing its resellers with three mobile options. Most fixed-line and data resellers are used to upfront commissions, while the mobile market has now largely switched to revenue share.
Depending on their expertise and client base, resellers can opt for either one or the other or a bridge position which mixes the two. The balance between upfront commissions and revenue share will be negotiated on a per deal basis depending on the client.
O-bit undertook a beta launch for mobile last month to get the billing side sorted and get staff trained up. Sparrow said the uptake has been remarkably swift with one reseller signing a 70-handset deal already.
‘It’s a nice deal for their size of operation, so we know we are pitching the proposition properly,’ she said.
Sparrow said the mobile market has an emphasis on longer term and more attractive margin solutions. ‘There are good connection bonuses and commissions available in that market, so there are some nice incentives for resellers – it is very complimentary to what they already do,’ said Sparrow.
She added that the unified comms market was definitely taking off with more and more clients wanting the whole package. ‘Clients weren’t seeing the benefits before and were asking why do we need texts or email? How can it make me more efficient? But the mobile networks and resellers have got cleverer at explaining the benefits, so there has been a good education going on.’
Fixed-line resellers have often found the mobile market difficult to get to grips with. Sparrow acknowledged that it is a tricky market for fixed-line resellers and said it would take a bit of an education process before they could take it to market themselves.
‘We pretty much handhold a reseller until they are ready to offer mobile solutions,’ said Sparrow. ‘We have workshops in November explaining the tariffs and services; how it can add to and compliment their existing offers and how to promote unified communication services to their client base.
‘We will go to their end clients and help them sell the solution and provide them with back office support, as well as helping to train their back office staff,’ she said.