Netcomm sounds reseller warning cry

Netcomm sounds reseller warning cry

Sleepers awake! That's the alarm call sounding for PC resellers by modem maker Chris Howells. The Netcomm managing director argues most resellers are totally unprepared for the changes rushing towards them in about seven weeks when telecommunications deregulation bursts upon the Australian scene.

It is going to usher in an unprecedented era of competition in the computers and communications sectors, Howells warns.

Since PCs are the drivers of data, the PC market can't avoid being caught up in the data communications market revolution that deregulation will create, he says.

Yet talking to reseller audiences about Netcomm's strategies and products for the new environment, Howells finds most "haven't even thought about it yet". He predicts they could start losing business to totally new competitors, such as car radio outlets.

"What has already happened in the mobile phone business is going to take place right across the communications sector.

"We'll be seeing lots of innovative cross- marketing and charging models in an effort to gain market share.

Stiff competition

"Customers will be able to switch [vendors and services] more easily and disconnect the deliberately interlinked products offered today. All parts of the communications expenditure will be opened up to hard competitive review.

"My advice to PC resellers is to start understanding this new market on behalf of your clients. "In less than eight weeks, they are going to have people coming to them professing to be carriers and committing to cut their communications costs by 50 per cent. They are going to be looking for help to evaluate what Howells called "a tidal wave of choices", and PC resellers, he said, were ideally placed to provide that technical expertise.

But such is the scope of the market changes taking place that "PC resellers had better be quick because the local car radio outlet could be their next competitor."

What resellers have in their favour is that their customers have successfully relied on them through the PC, LAN and WAN revolutions. PC resellers are used to dealing with an enormous selection of technology and have developed business models for absorbing new technology and expertise and coping with an enormous range of hardware.

"The PC business is absolutely commodity driven which runs, in some cases, on 2 per cent margins. "It has to get into value-added, margin-rich growth opportunities which, in my opinion, is the communications business.

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