Powertel has announced two carrier partnerships within the space of a week, inking with both Davnet and Amcom Telecommunications for complementary network offerings.
The agreements will provide Davnet and Amcom with access to Powertel's 2400km fibre-optic network, giving Davnet high-speed broadband access to buildings in the key CBDs of Sydney, Melbourne and Brisbane.
As part of the agreement, Powertel will gain access to Davnet's international network as an interim measure until the Southern Cross network (which will link Australia and the US) is operational; as well as access to Amcom's high-speed network in Perth's CBD.
Powertel CEO Stephen Butler sees the partnerships as an endorsement of the wholesale communications model. He believes that because the incumbent carriers have traditionally been so expensive to partner, smaller players have found it more economical to build their own networks. Powertel's latest strategy is aimed at fostering a better wholesale model.
"We try to make it cost-effective for our partners to buy on a wholesale model without having to build," he said.
While the wholesale strategy gives Powertel significant revenues on top of its corporate customer business, it also ties up a few loose ends where the Powertel network has a limited presence.
"We are also using their infrastructure to extend our own network," said Butler. "For example, in Perth, Amcom has a good reach where we don't. Again, Davnet have a different business model, serving SMEs rather than corporates, but many of these customers are in similar [geographical] areas. Why duplicate our infrastructure when we both want to access the same building?"
Neither party is too concerned about the possibility of having to compete for the same customers while in a partnership agreement. Representatives of both Powertel and Davnet told ARN the target market for each of the carriers differs significantly enough to make conflict unlikely.
Butler believes that flexibility is the key to success in the wholesale market and one of the most compelling advantages of the partnerships.
"We want to be flexible and so do the customers," he said. "We want to be easy to deal with."