Channel model, iBurst pay off for small distributor

Sydney broadband provider Techex has swapped direct sales dominance for an 80 percent channel model, opening offices and signing resellers on the strength of iBurst and a string of other broadband-related services.

Chris Collinge, managing director at Techex Communications, said the service provider and distributor – which had 15 staff -- had opened a Brisbane office and planned one for Melbourne by the end of the year.

Techex was experiencing growth fuelled by reseller signings and increasing interest in various broadband-related services, particularly Personal Broadband Australia's (PBA's) iBurst mobile broadband offering and voice-over-broadband services, he said.

“We were predominantly a direct sales organisation. About 18 months ago, we were 75 percent direct, 25 percent indirect,” Collinge said. “We are now 80 percent channel driven, 20 percent direct.”

Techex had signed 27 new resellers outside NSW since opening its Brisbane office in June, bringing its total stable to around 130. “And a lot have signed up because of iBurst,” he said.

Anti-spam and anti-virus were also doing well, again partly because of the ramp up in broadband use. About half of Techex' customers' emails were spam, Collinge said.

The company began in 1997. It began to grow rapidly in 2001, ramping up its $1 million-a-year revenue 500 percent in 12 months. The following year, its turnover grew another 250 percent, he said.

Collinge said Techex had decided to focus more on the channel and so far the gamble was paying off. Turnover multiplied another 200 percent in the 2003-04 fiscal year.

“This year, we're going into the BRW 100 list,” he said. “And I suppose a lot of it is because we've got a channel.”

iBurst had been preferred over Unwired's rival wireless broadband offering partly because iBurst offered true mobility. Also, iBurst was launching base stations on the Gold Coast in the next week or so, and in Brisbane, Melbourne and Canberra over the next two months.

“We have had a lot of resellers in Queensland interested in iBurst,” he said.

Selling iBurst required a big financial commitment, the details of which he couldn't divulge. Resellers were therefore keen on sourcing the product through a third-party such as Techex that could make it easier for them, he said.

PBA signed Techex Communications in April as the sixth distributor in its stable for iBurst. iBurst's personal mobile wireless broadband service was launched in March.

Collinge said Techex had also recently partnered a VoIP company called Talknet. Talknet offered VoIP services using a low-cost device that could be plugged into a company's PBX.

“A company can get low cost VoIP calls without having to invest in infrastructure,” he said.

Collinge said that Techex had hired a senior staff member who had previously worked for Azlan, one of the UK's largest IT distributors, where he had been crucial in building a channel for British Telecom.

So far, that one employee had been posted to Brisbane but Techex was hiring, he said.

“At the moment, we're looking for somebody in pre-sales and provisioning,” Collinge said. “We're building our own billing and provisioning system, which would make it very easy for resellers to bring on board their own customers.”

The company had also hired a salesperson to specialise in growing voice-over-broadband sales.

Techex was also on the acquisition trail. The company had its eye on one or more possible acquisitions, he said, but could not comment further at present.

Collinge said the broadband provider had made it partly by choosing vendors such as Request Broadband with which to work. “We've been pulled along somewhat by their shirt tails but I'd say we've also contributed to their growth,” Collinge added.

Techex had focused on business-grade broadband right from the start. When Telstra started doing the same in 2000, it had nearly put Techex out of business, he claimed.

“Because it was a terrible product [in 2000],” Collinge said. “Then, along came Request.”

A spokesman for Telstra queried the relevance of Collinge's criticism today.

“We started the network up in 2000, but that's ancient history,” he said. “I've heard of no recent problems.”

He said he didn't remember any particular problems back in 2000 either. However, any new technology or network was likely to suffer setbacks, he noted.