Are we already bouncing back?

Based on first-quarter earnings reports, the recession seems to have peaked where telecom services are concerned. Companies such as Level 3 said they experienced a first-quarter slowdown but now are seeing the sales pipelines fill up. Even AT&T and Verizon, which both reported declines in business revenues in the first quarter, saw increases in sales of more strategic products such as Ethernet, advanced IP and managed services.

Where most businesses seem to have cut back is in customer premises equipment purchases, which is understandable given the number of companies reducing their head count and freezing capital expenditures.

The opportunity telecom service providers now have is to capitalize on both trends — reduced work forces and capex cuts — with managed and hosted service offerings that clearly deliver value while reducing the need for IT support and additional capex.

These are more complicated products to sell and, in some if not most cases, require a higher telecom spend, which is offset by reductions in costs elsewhere — real estate, commuting and travel — delivering extra benefits in productivity and business continuity that may be harder to quantify.

And that’s the rub: In today’s economy, any benefit that can’t be expressed in dollars and cents is going to be a much harder sell, which is why telecom service providers are going to have to work harder to demonstrate the value of what they are selling.

It isn’t rocket science, but these kind of strategic sales do require engaging management in the decision-making process, and to do that, telecom service providers need to increase the awareness of what is possible today. I, for one, would like to see an industrywide organization tackling this topic — developing a campaign that could be funded across the telecom industry to benefit all competitors and address the growing possibilities for using telecom services in a variety of ways to reduce costs, improve productivity, boost employee morale, reduce business travel, save the environment, make needed training on-demand and enable mobile workers to more effectively communicate.

Telecom has become a very fractured segment, and it is likely to be even more fractured going forward. But this is one common interest and concern on which the industry should come together.

E-mail me at cwilson3@telephonyonline.com.