The Limits of Being a Carrier Agent

Most Interconnects and MSPs are well positioned to offer cloud communications services to their customers. Small and medium-sized businesses are clamoring for the power of cloud-based unified communications and service providers typically have a running relationship with them, as trusted partners. 

The challenge comes in how the Interconnect or MSP is going to add the cloud communications arrow to its quiver of services. There are several options.

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The first is buying a softswitch and building a solution from scratch, but that is increasingly expensive and beyond possibility for most service providers.

The second option begins with determining whether the service provider wants to position themself as an agent of a carrier, or as a brand of its own, deploying a white-labeled solution. There are certainly advantages to aligning with a carrier; when the service provider walks in to meet the prospect they get to toss out a big name that the prospect has likely heard of. That can seem like a position of strength because it gives the appearance of a proven choice.

However, being a carrier agent can be limiting for the Interconnect or MSP (and, yes, we admit we’re a little biased around here). Being an agent, subagent or a reseller will always be seen as a position of weakness because end customers perceive agents and resellers as middlemen. Even though the Interconnect or MSP is the one with the customer relationship, their brand is diminished in the eyes of the customer. Perception is reality.

Moreover, the carrier/agent relationship typically has a fairly low financial ceiling for the agent. Most resellers gain roughly 10 to 15 percent of the revenue from a given customer. This, despite having created the relationship and having to service the account. 

A white label service that positions the Interconnect or MSP can offer significantly greater returns for the Interconnect or MSP. Critically, it also positions the service provider in a much better light; their brand is front and center and they control the customer relationship. Simply put, they reap greater rewards.

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