Transcription of Finance News Network Interview with Inabox Group Limited (ASX:IAB) Chief Operating Officer, Paul LineLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from telecommunications wholesaler, Inabox Group Limited
(ASX:IAB) is its Chief Operating Officer, Paul Line. Paul welcome to FNN.
Paul Line: Hi Lelde, thank you.
Lelde Smits: Paul, could you start by outlining what is it that Telcoinabox does?
Paul Line: Sure, Telcoinabox is a wholesale telecommunications aggregator. What we do is provide anything and everything that an individual or a company needs to become a full serviced telecommunications service provider.
Lelde Smits: What is the difference between a wholesaler and a retail provider?
Paul Line: A wholesale provider doesn’t provide services to the end user directly. At Telcoinabox we are only a wholesale service provider, unlike some of the other names you might know in the industry like Telstra Corporation Limited
(ASX:TLS) or Optus, who have a wholesale and also a direct retailer. And we think that’s really important for us as a differentiator, because we don’t compete with our service provider customers. And that means we have a joint incentive to grow their businesses. If they don’t grow, we don’t grow.
Lelde Smits: Who are your service providers’ end user customers?
Paul Line: We have two types of end user customers. We have residential consumer customers who are purchasing household services and we have small and medium size enterprise customers.
Lelde Smits: Given Telcoinabox are the wholesale provider; does this mean you pass on the wholesale pricing to the service provider?
Paul Line: Absolutely, that’s core to our model. Unlike some other models in the industry, where the service provider is really a dealer operating under the auspice of a retail brand, our service providers actually own the contractual relationship with the customer. And, they make the wholesale margin. So, we sell the products and services to them at a wholesale price. And, they’re then free to set their own retail price and determine their own retail margins.
Lelde Smits: So Paul, why would customers choose you as their telecommunications service provider?
Paul Line: Sure. What we found is that the reasons that people choose a Telco provider are fairly similar, if they are a residential consumer or a business. And it really comes down to three things - trust, the relationship they have with the provider and value for money. In the residential consumer space, what we’re increasingly seeing is that people have relationships with other trusted brands in their lives, such as financial brands or utilities brands, their electricity company, their bank perhaps, or even their local retail outlet.
A great example of this is Tesco in the UK which everybody knows as a grocery store, but is now the largest telecommunications, or one of the largest telecommunications service providers in the UK.
On the business side, what we find is people are really looking for a service provider that understands their business, and that can help them to make their business more productive. And, not just see them as another account number, that some of the larger Telcos may see them as.
Lelde Smits: How does your offering vary from the major providers, such as Telstra and Optus?
Paul Line: We really pride ourselves on offering a very wide range of products; in fact we like to call ourselves a one-stop shop. I guess one of the key differences between what we enable our service providers to offer, and some of the retail brands is that we have access to lots of different products from different providers. Whereas a retail provider like Telstra or Optus is really only going to sell you their products. So if their products don’t suit you, you’re kind of stuck. In our model, our service providers have the option to provide products from a range of different wholesale providers.
Lelde Smits: I assume the question most service providers would ask is, “How do I make money as a retail service provider?”
Paul Line: It’s certainly a very important question and it’s a discussion we have often. It really comes down to creating a great partnership, between us and the retail service provider. In simple terms, they buy from us at a wholesale price, they set their own retail price and they make the margin between those two price points.
Lelde Smits: Finally Paul, what do you believe makes a successful service provider?
Paul Line: We like to say that there are four key pillars in the business that make a successful provider. And those are to get the customer, so they have to go and be able to sell to somebody effectively. To keep the customer and provide them with great customer service. To collect the money and make sure that their customers pay on time. And to manage all that profitably and make sure that they’re making enough money, to generate a great return for themselves.
Lelde Smits: Paul Line, thank you for the update from Inabox Group.
Paul Line: Thank you very much Lelde.
Ends
