COVID-19 – what’s the prognosis for resellers?

Trenches Law News   •   May 19th, 2020

Sharon

As the industry reacts to the ever-evolving COVID-19 pandemic, operators throughout the channel are being forced to make unprecedented decisions daily. Sharon McDermott – a legal professional with 30 years’ telecoms experience and founder of Trenches Law – recently spoke exclusively to Technology Reseller, observing the impact that different responses could have on resellers, when we hopefully emerge on the other side of this health crisis.

If you missed the article, catch it in full here…

“When I first started speaking to wholesalers and resellers, in the days that immediately followed Boris Johnson’s lockdown decision, there was an apparent consensus, on the whole, regarding what needed to happen next.

Most organisations – throughout the channel – seemed of the opinion that straight-talking conversations and mutual cooperation was required, if the masses were to get through this period of potentially unrivalled economic uncertainty. There was also a hope – if not a yearning in many cases – that soon the dust would settle, and the creation of a ‘new normal’ would at least bring a sense of clarity to the situation. That way, organisations could better consider ‘what next’.

This wasn’t just the outlook of the telecoms industry, but the wider business community too.

However, at the time of writing, the landscape – understandably – continues to evolve, and concerns are now rising as to the long-term commercial prognosis, particularly for resellers.

It is important to acknowledge one of the most commonly used phrases at present – it is spoken by the Government and it appears in the media every day. “These are unprecedented times.” So, it would be unfair to criticise any business for the decisions they make, to get through the COVID-19 crisis. We must presume – and hope – that management teams are genuinely making the best decisions they possibly can, for their workforces and their customers, in the face of a situation they’ve never encountered before.

However, I can’t help but worry that the sterling efforts of some – the genuine attempts to go above and beyond to protect job security, customer satisfaction, business longevity, the nation’s connectivity, and ultimately do what’s right – will be hampered by the decisions of others. And the consequential impact on the channel could be catastrophic.

For instance, the Government has encouraged local authorities to relax the timings on street works notices, where possible, so that ISPs can go about their business and keep the country connected, without having to wait up to three months for permission to dig up a road. But this is still at the discretion of individual councils, which could limit the intended benefit of this flexibility.

The Government has also given telecoms personnel ‘key worker’ status so that they can continue to go about their jobs. But again, there is a disconnect on a local level, when it comes to communal areas, for example, and the perceived legitimacy of operators being at work. Abuse from members of the public – with videos going viral on social media – has also raised concerns for the morale of employees, not to mention their welfare when people are breaking the 2m social distancing rule to film and shout at them!

The fact that the majority of Government guidance relates to street works also means that while national infrastructure network builds are still pressing ahead, there is comparative ambiguity when it comes to entering people’s premises.

The telecoms industry is working together, committing to ensure that vulnerable customers and frontline NHS workers remain connected. It is also of the upmost importance that critical businesses remain connected.

That’s seemingly why BT Openreach, for instance, is progressing with such essential works and repairs that can be completed outside, but not accepting new connection requests that require entry into a customer’s home. Limiting works which the engineers carry out, is understandably to prioritise their safety and that of the people they would otherwise encounter. Yet this means that others may face extended outages, which could be devastating for consumers, homeworkers and businesses alike.

Then comes the issue of payments.

Many resellers are concerned that several large customers – particularly in the leisure and hospitality sectors – have temporarily closed and are therefore refusing to pay their invoices for services. Faced with frightening cash flow fears – certainly post-April – they are looking for Government grants and pushing requests for flexibility up the chain.

But wholesalers’ hands are also tied – or they face some extremely difficult financial decisions of their own – if there is limited movement in this regard at the very top of the channel. If a reseller’s end user goes into administration, the reseller usually remains liable, which is a worrying position to be in.

It is easier said than done, but parties throughout the channel must work together to each give a little, share the burden and hopefully weather this storm together. Creative thinking may be required, but with even greater collaboration, perhaps more could be done.

We have seen some fantastic examples of wholesalers doing what they can, when it lies within their control. Initiatives include the reduction of early cancellation charges where possible, the temporary provision of free bandwidth upgrades to healthcare customers and complementary consultancy services. Many suppliers to the channel are doing their bit too, including us, with our team trying to support the smaller telecoms businesses who have no legal teams, wherever possible.

Is there an instant fix or an easy answer through all of this? Of course not. Would ‘short-termism’ ideally be avoided? In most cases, probably so.  And we’re each rightfully protective of our own staff, safety, cash flow and, ultimately, survival – in every sense of the word.

All that anyone would ask right now, I’m sure, is for everyone to ensure they’re doing all that they possibly can, to remain fair and focused on the ‘long game’, when we can hopefully come out of the other side, together.”