NEW DELHI, INDIA: Hughes Communications India, provider of satellite connectivity services, has decided to work with channel partners for its enterprise broadband solutions.

Hughes also wants to expand its small and medium enterprise (SME) channel network in unrepresented areas like Madhya Pradesh and North East. It currently has 30 partners with 600 installations in the SME space and over 30,000 sites in the enterprise space. “We believe that in the SME space alone there are over 15,000 customers who can afford satellite connectivity, of which we have tapped just around five percent. So the scope is immense,” said K Krishna, CTO, Hughes Communications.

Till now, the company was tapping over 300 defined enterprise customers directly but has increasingly realized that to bring in operational efficiency on the fulfillment side it needed to work with the channel partners. By doing this it hopes to become more customer friendly by offering local delivery and local stocking of hardware and give options like offering its satellite hardware on rent.

“We are trying to spread into the channel environment where we will have partners who will look after fulfillment. Customers will still be owned by Hughes in the enterprises,” he informed.

The company has around 300 enterprises accounts where there is direct sales engagement. Earlier it would ship products to the various branches and sites where these customers needed connectivity from its central stocking facility and do the installation and maintenance directly.

However, while doing this it encountered lot of problems related to road permits and local issues. “Due to this the entire premise of offering quick connectivity to customers is losing its shine,” Krishna added.

This is why Hughes hopes that working with a channel partner will help it tackle these issues. “We are talking to some large national level systems integrators, who will help us fulfillment capabilities of quicker delivery and avoid capex for the customers,” he elaborated.

Incidentally in 2007, Hughes started working with tier-two channel partners for its SME offerings. The company is also contemplating creating a mix of national and regional channel partners who already present in the target geographies and have an established support infrastructure and pool of engineers who can do the installation and maintenance. This will help it reduce its final fulfillment cost and increase efficiency, bringing down the capex investment for the enterprise customer.

To ensure that there is no cannibalization of the SME channel by the enterprise channel partners, Hughes will ensure that all enterprise customers are acquired by it directly and only the fulfillment is done by the partners. “As against this, in the SME side, the channel acquires the customer, services them and fulfils the order,” informed Jairam, who looks after marketing for the SME division in Hughes Communications India. Nonetheless, the company does admit that there are some gray areas, which it hopes to iron out by the time it rolls out the enterprise channel by June, 2009.

“Our partners do the entire sales engagement like customer identification, sales engagement, fulfillment and maintenance. Partners earn in two ways. One is by selling the hardware. Besides this, the customer pays a fixed sum every month fo the support and maintenance for the solution. As the number of sites managed by the partner increases, this revenue from that customer also increases,” he added, while explaining why partners can add value to their business by working with Hughes.

Besides this, client retention is also high because customers don’t buy the hardware from one channel partner and go for maintenance to another channel partner. This increases the scope of repeated business and recurring revenue for the partner.