Last October Opal Telecom introduced a scheme for paying up-front commissions to channel partners selling its new bundled broadband and voice packages. According to its Head of Reseller Channel, Andy Hollingworth, the offer has proved ‘enormously' popular within the first few weeks of inception.

Hollingworth enthused: "The response has been phenomenal. We're operating two different distribution strategies: If you're doing more than 50 contracts a month then you can have a direct arrangement with us. If you're doing less then we have distributors like Hugh Symons and EBS who can provide fulfillment."

Dealers are paid a flat fee of £130 for signing a customer to one of the bundles, handing over complete ownership of the contract to Opal. It was designed around the models used by carriers in the mobile industry in order to attract partners there who are rapidly moving into converged communications. The opportunity is particularly appealing, thinks Hollingworth, because the mobile networks are changing the way they work. "Rather than pay up front commissions on the sale of a handset," he explains, "Carriers are now offering 48 per cent revenue share as long as your customer is in contract. That sounds great going forward, but it leaves the mobile partner with a huge cashflow deficit."

"How do you make more money from the customer base you already have? By embracing new technologies like VoIP, SIP and hosted products"

Suddenly switching from one model to another is leaving the partner base with a significant hole in their cashflow, he says. "They've been buying handsets at £200 and relying on £300-£400 coming through from the mobile carrier to make a return," Hollingworth continues. "Now they'll only recoup the value over the life of the contract. If the contract is terminated they don't qualify for payment any more, even though the customer might still be billing with the carrier."

Although the launch has been planned for some time, and specifically targeted at the mobile sector, Hollingworth believes that the timing is fortuitous for traditional channel partners too. As lines of credit from the banks to small businesses dry up, there are many who are interested in the Opal proposition as a quick fix to tide them over. "The traditional channel has the choice," he explains. "If they want to keep ownership of the customer then a traditional model still suits. But if they are worried about the current climate and want a bit of input to their cashflow, then this model can help."

Despite acknowledging that smaller partners are under the pressures as any SMB at the moment, Hollingworth also subscribes to the popular belief that the telecoms industry can immunise itself from credit crunch to a certain degree. It's an opportunity to showcase the efficiency gains and cost reductions new technology makes available. The companies that thrive and survive over the next 12 months are those will innovate to help their customers keep trading.

"Does the credit crunch affect us?" he postulates. "Absolutely not. As long as you think about your approach, and as long as you're adding value to the customer and you're embracing what new technologies can do to achieve the customer's wishes - that's to help them communicate more efficiently."

He offers practical tips to make this happen, advising partners that even though a poor economic climate increases churn rates, time and effort put into increasing revenues from an existing customer base is still an easier win for partners than attracting new clients. "If you don't take that approach, then someone else will and muscle in on your clients," he cautions. "How do you make more money from the customer base you already have? By embracing new technologies, looking at things like VoIP, SIP and hosted products that will make their business more efficient and create a happy partnership between the partner and the end user."