Long-Distance Resellers About to Get Some Help

Since the passage of the Telecommunications Act of 1996, many small carriers have purchased long-distance hours from MCI, Sprint and other major companies to create a reseller market of their own.

While many of these entrepreneurial ventures have been successful, others have been overwhelmed by the amount of work and money that goes into operating such a business.

Executives of Coyote Network Systems of Westlake Village, and Profitec of Orlando, Fla., think they may have a solution to this problem.

Coyote--a provider of telecommunications products and network systems for local, long-distance and Internet service providers--and Profitec--a provider of billing and other management services for the resale segment--have formed the TelecomAlliance, a multi-company venture intended to fill the knowledge gaps of the entrepreneurial long-distance resellers.

“Most of the resellers that have joined the fold since 1996 are marketeers. The back room applications of running a phone company--sending out bills, customer service--that’s not their strength,” Coyote President Dan Latham said. “They really don’t care to operate the switches either--they don’t care to be technology gurus.”

The two founding companies will sell their services to a network of 20 to 30 resellers within the alliance. To date, a dozen of these small long-distance companies have signed on.

“This will free them up to compete in their area,” Latham said. “They will be able to focus on their niche markets, their geographic markets, their ethnic markets.”

Latham said the network of companies should serve as a larger voice in legislative discussions and, by forming a single large corporate entity, should mean lower procurement costs for its members.

“We’re putting this alliance together just like a venture capitalist--we’re going to own a piece of it,” Latham said.

To be members of the TelecomAlliance, resellers must meet several criteria.

“We want a good geographic disbursement [and] we are really looking at people who have high integrity,” he said. The companies, he said, also must have billings of at least $24 million annually.