Mitel Mobile – Adding Mobility to UC

Last month, Mitel announced a new mobility play, and is of interest for a number of reasons. The day the news came out, fellow UCStrategies colleague, Dave Michels, posted a nice analysis of what wireless brings, as well as what it could mean to their UC story.

I’ve been interested in this news as well, and since the service hasn’t actually launched yet, it’s not too late to add a few things. To build on Dave’s writeup, I had a chance to brief last week with Laith Zalzalah; he’s the Director, Wireless and Hosted Solutions at Mitel NetSolutions. The first thing to say is that there’s still no news about a firm launch date, pricing or handset partners.

That’s not really very surprising, but there are other things to talk about. Expanding on Dave’s thoughts, a key driver is the value that mobility brings to the UC experience. Most vendor solutions already offer some variation of FMC, so in terms of extending the desktop to the handheld, there isn’t much new here. Of course, where it gets interesting is that now, Mitel can be both your vendor and service provider. By definition, this puts them higher up the value chain, and gives them a level of integration that no vendor can match.

Mitel got into the carrier game courtesy of their Inter-Tel acquisition, which included NetSolutions, an established wireline CLEC. Today, they have over 10,000 customers, with coverage in 43 states. That’s a pretty broad footprint to build on, and they’re working on getting coverage in the remaining states. The beauty of MVNO is ease of market entry, especially when you already have this level of presence. I’ve never been a big fan of consumer-focused MVNOs since it’s so hard to compete on price unless you truly have a differentiated offering.

What I particularly like about Mitel Mobile is that the business isn’t just about selling wireless connectivity. Mobility simply strengthens their overall portfolio, and for a lot of businesses, that’s an attractive value proposition. Think about the convenience of getting your wireline, wireless, data services and communications solutions from one provider. Aside from the usual single point of contact, single bill, single customer support team, single source for both SIP trunks and PRIs, etc., there’s another important benefit here.

Since Mitel Mobility isn’t just selling airtime, they can afford to offer fixed bundles of minutes, including long distance and roaming. This provides cost certainty for business customers, and makes the task of managing mobile usage much easier. In fact, when you take the variable costs of mobility out of the equation, it becomes more likely that businesses will extend the rich features of Mitel Communications Director to a broader range of employees. This is great for Mitel since it drives more people to use their UC applications, and find new ways to work more collaboratively.

I really can’t think of any other UC vendor with something comparable, so it’s a pretty savvy way to differentiate yourself. It’s hard to imagine Cisco or the post-Nortel Avaya going down this road. I’d say it’s more likely that a smaller competitor would do this, simply because they’re more agile and the economics are not really a factor. However, without a captive customer base, I think these players would have a very steep uphill battle ahead of them. Just think of how this would be received by businesses as well as the channels. It would be pretty hard to trust your telecom needs to a vendor who doesn’t have any history in this space.

So, for the time being, I’d say Mitel would have first mover advantage. Whether this translates into market success remains to be seen, but I think they’re in an ideal spot to take advantage of the MVNO model. This really shouldn’t be a big leap for resellers and integrators – and Mitel Mobile is exclusively using channels – and it offers them a new stream of residual income. And let’s not forget that mobile UC is still in early days. With 4G, LTE and new smartphones coming all the time, the upside here for Mitel is pretty attractive.

If Mitel has to worry about anyone trumping this strategy, it’s Google. In their own way, they have all the pieces too, but in a slightly different configuration. Of course, they lack indirect channels, and a widely deployed suite of communications applications. Google Wave has a lot of potential, but they have a long way to go to match the kind of presence Mitel has with businesses – not just with UC, but desk phones (which are still important!), video conferencing, contact centers, etc.

Will MNVO become a new strategy for others to emulate, or does Mitel simply have a unique set of assets to leverage? I’d say it’s the latter, but it sure will be interesting to see what unfolds once Mitel Mobile launches. At minimum, it’s good news for UC, and we’ll certainly be following this closely once it comes to market.