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Why can’t phone companies afford to provide proper support anymore?


The FCC Telecom Act of 1996 had a huge impact on the industry by opening all markets to local competition. The industry changed dramatically as a result:

  • Experienced engineering resources dispersed to new competitors.
  • Market shares fell due to competitive offerings.
  • Margins dropped due to aggressive pricing.

To make matters worse, the volume of internet content exploded. This dramatically increased the data load on the core networks:

  • Simple text only web sites evolved to include images, music, and video.
  • Search engines like Google and social networking sites greatly increased user activity.
  • Web-based technologies like VoIP and media streaming further increased the load.

This, in turn, led to what was known as ‘the race to zero’, a cut-throat phenomenon that had companies undercutting each other just to get business; in some cases giving the services away for free just to gain market share. Prices started racing down to zero! Look at LD (long distance) rates as an example…what used to be 15 cents/min is now being sold at less than a penny. Ask yourself…what steps would you have to take if your company’s revenues fell to less than 10% of what they were just years earlier, yet you were still expected to maintain the same level of service?

All of this had a profound effect and triggered a ‘survival mode’ business environment which dictates that the phone companies minimize all back office support. All of the telecom companies began slashing overhead to survive and compete for their share of declining revenues. Overhead includes anyone considered to be ‘zero-value add’, which is everyone except for sales because only sales generates revenue by definition…that means all the engineers, translations, operations, order entry, and customer support folks were, and are now, operating with skeleton crews. Their business model had to be changed and the end users — you — are left with poor customer service and insufficient technical support.

Everyone knows customer service from the phone companies has dramatically suffered. Try calling customer service some time – what used to take 5 minutes can now take 5 days and any kind of service change order can take months. You are all calling into national and international call centers and typically speaking to someone only capable of taking your name and complaint. The limited engineering resources the phone companies retained are dedicated to the largest enterprise clients…a business decision leaving order-entry ‘integrators’ to support the rest of the client base. The only segment of the telecom industry that is growing today is their sales force, and those sales people are not qualified to properly help you select the best and most cost efficient services for your specific business.

Here are the facts:

Do you spend less than $500,000 per month on phone bills? If so, chances are that your telecom services and network were not designed by your telephone service provider’s engineers! Did you know that?

  • The primary responsibility of your phone company ‘sales engineer’ is to integrate your equipment with their core backbone and provide transport solutions. You must tell them what you need…they do not support true ‘low level carrier design engineering’.
  • Sales engineers do not have the responsibility to design your network. They are responsible for building revenue, not saving you money. They are judged by how many jobs they enter into the provisioning system each month.
  • Even sales engineers are a scarce resource. The phone company ratio for sales people to sales engineers is 40:1 at best.
  • Due to lack of technical support, sales representatives are typically forced to do the best they can on their own with little or no technical training.
  • Declining revenue and increased competition forced cuts to high level engineering resources.
  • Only larger, Fortune 500 type clients get offered carrier engineering level design support.
  • Smaller businesses like yours are sold off-the-shelf, cookie-cutter services without design engineering input.

Leading research organizations like Aberdeen and Gartner Group estimate that 5-15% of business telecommunications budgets are wasted on billing errors and design inefficiencies, resulting in millions per year in lost profits.

This is why RINGSIDE PARTNERS is in business. This is the gap we fill, but we don’t just replace what you lost. We raise the bar because you are now working with seasoned engineers, whether your question, concern or issue is simple or complex.