Junior telco Vocus will pick and nurture 50 managed partners as part of a three-year turnaround plan.
The company today convened a “strategy day” at which group managing director and CEO Kevin Russell revealed “We are simplifying Vocus into three independent business units, each of which has different opportunities.”
And as slide 24 of Vocus’ presentation (PDF) shows, the company seemingly planned to reduce the number of partners it works with to 50, down from the current 350.
CRN sought comment on the slide to clarify it indicates an intention to reduce overall partner count. a Vocus official told us that the slide does indeed outline a plan to cut 300 partners.
But Vocus has since told us that is not the case, and the the slide really means it will actively manage 50 partners, with the rest given less attention.
CRN understands the changes are being made because the telco has not focused on managing its partners, meaning some are not active. Others are felt not to be a good fit to Vocus, which will now try to build relationships that offer mutual value-add as it trims its channel.
The company therefore hopes that a smaller group of suitable and actively-managed partners will actually expand its reach into the market and help it to grow revenue.
After correcting its own error, Vocus sent us a statement from channel chief Andrew Wildblood who told CRN the company is "committed to all our partners. We intend to grow our partner community by aligning with like-minded organisations to jointly be successful. Our reinvigorated program will give partners the opportunity to jointly go to market with Vocus and provide Australian businesses with an end-to-end ICT solution which includes the best of network (Vocus) and the best of services (our partners). "
"We disclosed in a Strategy Day presentation that we plan by 2023 to have our top 50 partners transacting at least 20% of our total revenue. The impact of this is a significant increase in the percentage of revenue that we will be transacting through our indirect channel. We are focused on building a quality channel; the total number of partners will be is not a key focus for us."
The slide describing the channel changes says the plan will deliver three benefits, namely:
- Lower cost-of-sale, greater coverage
- Access partners’ managed services via Vocus single bill
- Allows Vocus direct sales to focus on major wins
The last point will doubtless be of interest to current and potential partners!
The slide also reveals an action plan to:
- Enhance relevant industry experience
- Build capability to offer partner-billed services
- Digitise Vocus processes
Stuff Vocus hasn't changed its mind about ...
CEO Russell thinks there’s growth to be had. He told investors it is “clear that our core business, Vocus Network Services, has untapped growth potential and an outstanding market opportunity.” But he described Vocus Retail, which serves small-to-medium businesses, is “in turnaround, facing headwinds due to legacy voice products and the transition of customers to lower margin NBN products.” Vocus New Zealand “continues to be a very strong performer and is well positioned for future growth,” he said.
The turnaround plan for Vocus Network services will see the company target vertical markets. Russel said the company sees “opportunities to partner with the NBN to enable us to win complex multi-site businesses in the Enterprise and Government segments.”
The company also plans what the CEO called “a comprehensive network and systems modernisation program, which will enable the growth in the business and contribute significant annual operating cost and capital expenditure reductions within the next three years.”
“The program will also provide Vocus with the ability to disrupt the market with new commercial models, easier product innovation and enable Vocus to deliver a better customer experience,” Russell added.
Vocus Retail will receive a “strategic reset” that will see it “established as a standalone business, with a strategy in place that will return the business to revenue and profit growth.”
“The turnaround will be driven by a move to a low cost digital operating model with greater automation of sales, marketing and customer care, along with a diversification of its product portfolio to increase revenue generated from mobiles and energy.”
Russel also flagged network consolidation, investments in software-defined networking, with advanced automation in place across its network assets in the year 2022 to improve performance and reduce costs.
UPDATED AT 12:25 PM Changes made to reflect Vocus' updated advice on the meaning of slide 24.
UPDATED AT 13:35 To add comments from Andrew Wildblood