Smaller can be better in R.I. market

In the two years since Broadview Networks set up a sales office in Providence, the telecommunications company has more than doubled sales in the state. Still, the company remains a small player in a market dominated by giants such as Cox Communications and Verizon Communications.
Broadview is one of several small telecommunications companies to enter the market since the Telecommunications Act of 1996 made the larger players in the industry provide access to parts of their infrastructure at a competitive price.
To succeed in a market dominated by the industry giants, Broadview must stick to its niche – serving small to medium-size businesses – because that is an area the company feels is underserved by the market.
Businesses in that niche also are more open initially to new product offerings because large companies usually already have a large investment in their existing telecom infrastructure, said John Ficarra, sales director of Broadview’s Providence office.
Despite that potential to offer differentiated service, smaller telecom providers still face their share of challenges in the market.
One is to provide a complete package of offerings, including voice, data, hardware and managed security services such as e-mail security, managed firewall, content filtering and offsite data replication.
The idea is to be a one-stop shop so clients don’t have to hire an IT employee, which saves money for the customer, said Giovanni DiFede, Broadview’s regional sales director for New England.
Broadview also tries to differentiate itself from competition by hosting IP-PBX, a system that uses VoIP technology, on its server, Ficarra said. The system allows customers to transfer phone calls among their networks more easily and at a lower cost than traditional phone systems.
“That makes us somewhat unique among carriers because we’re one of the first carriers to successfully deploy this, and we are the largest hosted IP-PBX provider in the nation,” he said.
But Broadview isn’t the only provider to the small and medium-size business segment in the state. One Communications has been selling telecom services to that segment since 1998 and has 10,000 customers in Rhode Island. Broadview has about 1,000 customers in the state.
Dennis Nally, branch manager of One Communication’s Lincoln office, said one of the challenges of competing in the market is the fact that the industry is changing.
“Customers have different needs,” he said. “There’s a lot of interest about IP telephony. It’s challenging because I think our competition, one thing they don’t do is educate the customer … IP telephony makes sense from location to location … but the general customer with 10 lines, he doesn’t need it.”
Nally said One Communications sells IP solutions to customers with multiple locations within a geographic region because they can get free calling between locations, but doesn’t recommend providing it for each employee’s desktop because it doesn’t always bring value.
The companies are similar in that they rely heavily on face-to-face interaction with customers to grow their referable customer base.
“Service really separates us,” Nally said, adding that One Communications puts its account representatives “on the street” to establish one-on-one relationships with customers.
Ficarra added: “Larger carriers don’t really pay attention to smaller customers … We give them personal service they haven’t gotten in the past in addition to value.”
Rhode Island provides a unique advantage as well because of its size, Ficarra said. The business (or customer) network is easier to maneuver because it is so tightly knit. Word gets around faster.
But David Porter, who’s been negotiating telecommunications contracts as director of media and technology services for the University of Rhode Island for the past 11 years, could think of a few more reasons the smaller telecom companies have found success in the market.
“These smaller companies are more aggressive,” Porter said. “They’re more nimble and willing to go to their business development people to put together different proposals for products.”
He said because they are smaller, they have better access. They can negotiate prices more quickly, and they can sometimes afford to barely make a profit to get the business.
“The Verizons are getting more flexible now because they see that’s what’s being offered,” Porter said. “It took a while. When Verizon was losing business … they changed their ways.”
Porter added that the smaller companies also have an advantage in offering VoIP to customers because they don’t have as high overhead costs as larger companies that also offer VoIP.
“They’re using a new technology called SIP [Session Initiation Protocol],” he said. “It allows computers to set up conversations with other computers. There’s a much lower cost of entry to compete with Verizon.” ·