By Simon Woodhead
It has been 8 or so years since we introduced our various ‘new’ service levels for Carrier Services, so we thought an overview was in order. We also have one change which some of you might like – make your own.
Our Startup plan is intended for those who don’t like commitment! While it comes with a very modest minimum monthly spend (all our service levels have a minimum spend – it is one way of ensuring we’re not dealing with your customers and this is wholesale business), it otherwise has no long-term contract. You just pay as you go month to month. As there’s no channel fees, call charges are higher than on other plans, but they’re price-matched automatically where a similar competitor has a keen but correct price. Where they’ve just done something daft, we of course won’t match it!
This originally was targeted at BT IPX Type A, and even tracked headline rates, until BT introduced connection charges on UK fixed and mobile calls, then we diverged. We have a similar channel fee and require a term commitment of usually 3 years, for which call rates are substantially reduced. However, we don’t levy a stealth channel fee buried in the footnotes of the small print, amounting to a further £6.30 per channel on all BT numbers, which could be 70% odd of your incoming traffic! Our channels can be flexed of course and we, uniquely, enable customers to burst beyond their channel limit if they need to – Frazer discussed this recently. We’ll host your number ranges at no extra charge on this service level and arguably do so with far less risk than others: we are already fully IP so have no disruption ahead migrating our BT interconnects (we did that in 2020 when we joined the Secret Club) and we’re fair and transparent in how we handle hosting inter-carrier, so there’s much less regulatory risk than BT IPX.
Managed Interconnect a.k.a. name your price
Our top tier service level builds on Virtual Interconnect; it was intended for those coming out the other side of something like IPX, and possibly considering deploying TDM to improve economics. It also aimed to service those migrating away from TDM without the ballache of soliciting a Secret Club invite. It did that, with the key difference to Virtual Interconnect being that channel fees were much higher and calls were much lower. It shifts the discussion towards commitment and infrastructure spending to access a better suite of economics. .
Today we’re changing Managed Interconnect. It’ll retain its pricing and this won’t affect existing customers, or indeed prospective customers who want the a la carte pricing, at all. However, this is the service level at which customers can define their own model, or negotiate key elements such as the channel fee.
What we’ve seen over recent times is customers wanting our best rates, but also wanting to match whatever ‘best’ they’ve negotiated somewhere else. We can, and do, win hands down against anyone in the UK market pricing a ‘basket’ of spend but what we won’t do is match someone else’s loss leader while preserving our own. We used to achieve this through high minimum spends or walking away where discussions weren’t honest, but now we have another way.
Let’s say you want everything Simwood does better than IPX (or a.n.other), but they have given you a super-discounted channel fee. They can do this because a) they’re charging more than Simwood elsewhere and b) they have stealth charges we don’t, such as the £6.30 per channel most customers don’t see on 70% of their inbound traffic. It is easy to think you have the best price in the world if you don’t know your wallet is being pick-pocketed somewhere else! Add them together and it is a very different story.
However, where customers are open to reality we can achieve the best of both worlds, and Managed Interconnect is where we do it. This may entail us holding our nose and replicating a stealth charge fully transparently and on better terms, to enable us to match or beat the headline rate you do know about, and winning in the multiple other areas our pricing is already better. We don’t need to assume a mix of traffic if we can get super granular and if we’re protected from cherry-picking and arbitrage, pricing can be really really keen.
This requires a certain scale of customer, certainly committing to at least £10k a month or more of spend – the bigger the commitment, the more aggressive we can be. It also requires a customer who is willing to be straightforward and open – if you want to deny note 10 in the IPX pricing exists when we’re both looking at it, or make up a rate we know is impossible, then we’re not going to get very far – something I ’wrote’ about recently! But if you have a need for all the value we deliver but our commercials need tweaking, then let’s talk.