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Gamma: Putting B2B dealers back in control

Michael Garwood
April 22, 2013

After establishing itself as a major fixed-line player, Gamma Telecom is looking to make its name in mobile. The firm’s head of mobile, Rob Davis, tells Michael Garwood how it plans to go about it

Gamma Telecom is an established name in the UK B2B fixed-line wholesale market space.

Having only entered the space back in 2001 after being founded by Paul Banner and Phil Corbishley, the company now ranks fourth behind giants BT, TalkTalk and Virgin – carrying around 13 per cent of all UK calls on its network.

After starting life in a single office with a couple of chairs, the firm today turns over annual profits of more than £6.7 million (see boxout on next page) and has offices in Newbury, Manchester, London and Glasgow, and even a software team in Budapest. The company currently employs more than 400 members of staff – this is double the number of employees it had in 2010.

The firm’s strategy from day one has been to be a disruptive force, offering unique propositions to reseller partners  and building closer ties than the multibillion corporates operating in the same  market areas. Today, Gamma works with more than 600 resellers – a figure that continues to rise year on year.

According to the firm’s CEO, Bob Falconer, Gamma’s philosophy is built around understanding what it is that the business market wants, rather than playing by the rules set by others.

He says in a promotional video on the firm’s website: “We look to see what their needs are and seek to use technology to develop products and services to really help them do what they need to do in their markets. We can only be a success if our partners are a success.”

Into mobile
The one missing ingredient – the “glue” to bring all its products and service together – was mobile.

According to Gamma, in 2006, there was a 50/50 split between fixed-line and mobile business calls. By 2012, the split was 30/70 in favour of mobile.

But while fixed-line usage had decreased, the demand from businesses to own a fixed-line connection had not.

The natural progression for the firm was to dip its toes into mobile for the first time, and in 2006, the firm appointed head of mobile Rob Davis (pictured) to oversee the transition.

But the firm had no interest in becoming what Davis calls “just another airtime distributor” competing at the same level as the likes of Avenir Telecom and Carphone Warehouse Business had for years. It needed to create an offering which was both simple to understand and familiar to that of its existing fixed-line partners – but also create interest among those in the traditional mobile space.

Rewriting the rules
So later that year Gamma signed a wholesale deal with Three to become a mobile virtual network aggregator (MVNA).

The MVNA deal meant Gamma resellers were able to launch their own MVNO service, managed entirely by Gamma.

Resellers had the choice either to offer the service as a Gamma product or go under their own white-label branding.

Davis explains: “When I joined in 2006, Gamma was purely a fixed-line business and wanted to grow some new products. I came in to help set up and get into mobile in the right way.

“The core asset Gamma has is its channel partners and channel reach. Our channel partners offer services across a whole range of things in the telecoms and IT space so we need to provide services in those key sectors.

“Mobile is the fastest growing of those segments so we needed to get into that space, but in a way we wanted. It’s been a long time coming.”

Teething issues
The partnership with Three was labelled by Davis as a success in the sense that partners were introduced to the idea of becoming an MVNO and selling mobile airtime services – many for the first time.

However, he confesses the launch did not generate the levels of interest the firm believed it was capable of given its roots in the fixed-line space.

The problem, he explains, was in part down to limitations from partnering with Three, such as the inability to add a BlackBerry service to deals. He says Gamma was also unable to include its own developed services on the network – which we will come to in a moment.

Davis describes it as a “basic wholesale” deal and one which mirrored an MVNO more than an MVNA. He admits Three’s reputation in B2B may have been a sticking point for some.

“In the wholesale game the brand isn’t visible at any stage, be it on the phone, the SIM or the billing. It’s a Gamma service,” says Davis.

“But people are of course aware of the network it runs on. When we were working with Three it was reasonably successful, in the sense it got us into the market, it got some of our channel partners selling a service and made them aware of what they could do with an MVNO-based type of service.

“We reach around 15 per cent of the UK SME market on our fixed-line side through our channel partners. But mobile is a lot smaller than that – less than one per cent – so there is a huge opportunity for us to grow.”

Vodafone switch
During 2011, Gamma switched its MVNA partnership to Vodafone and spent the remainder of the year transferring all its customers – said by one publication to be in the tens of thousands – onto the Vodafone network.

Gamma soft-launched the service in January 2012 , immediately taking to the road with a series of roadshows designed to encourage both traditional mobile and fixed/IT players and explain the opportunities running an MVNO can provide.

The move proved an instant success, with Gamma seeing its number of MVNO partners at launch double to 100 in under 12 months. It expects the growth to continue this year and has this month begun a number of roadshows to help encourage new and existing partners to get on board.

Davis says the number of connections has more the doubled too – although he refuses to be drawn on details.

“We spoke to everyone in the market second time around,” said Davis. “But we felt from a business and quality perspective Vodafone and O2 were the key players when trying to work out which was the best option for us, but ultimately for our customers.”

Full article in Mobile News issue 537 (April 22, 2013).

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