Cincinnati Bell 2011 Annual Report Download - page 128

Wireline and Wireless also utilize a business-to-business sales force and a call center organization to reach
business customers in its operating territory. Larger business customers are often supported by sales account
representatives, who may go to the customer premises to understand the business needs and recommend solutions
that the Company offers. Smaller business customers are supported through a telemarketing sales force and store
locations. The Company also offers fully-automated, end-to-end web-based sales of wireless phones, accessories
and various other Company services. In addition, the Company utilizes a door-to-door sales force that targets the
sale of the Fioptics products to residents.
Aside from Company resources, there are 155 third-party agent locations that sell Wireline and Wireless
products and services at their retail locations. The Company supports these agents with discounted prices for
wireless handsets and other equipment and commission structures. The Company also sells wireline and wireless
capacity on a wholesale basis to independent companies, including competitors that resell these services to
end-users.
The Company’s Data Center Colocation and IT Services and Hardware segments primarily sell to customers
through its business-to-business sales force. Sales representatives develop customer leads through existing
relationships with IT leaders of businesses, referrals from existing customers, and IT hardware vendors. To a
lesser extent, leads are also developed from third-party brokers and marketing sources, including web-based
efforts.
Suppliers and Product Supply Chain
Wireline’s primary purchases are for network equipment, software, and fiber cable to maintain and support
the growth of Fioptics services, as well as copper-based electronics and cable. Wireless primarily purchases
handsets and accessories, wireless cell site and network equipment, and software. Wireless often partners with
other regional carriers and wholesale distributors to build requisite volume for handset manufacturers. The
Company generally subjects these purchases to competitive bids and selects its vendors based on price, service
level, delivery, quality of product and terms and conditions.
The Company maintains facilities and operations for storing cable, handsets and other equipment, product
distribution and customer fulfillment.
Also, Wireline has long-term commitments to outsource various services, such as certain information
technology functions, cash remittance and accounts payable functions, call center operations, and maintenance
services. Similar to the purchase of materials, competitive bids are obtained for such vendors and are subject to a
rigorous evaluation and approval process.
Data Center Colocation primarily purchases general contracting services, building materials, and
infrastructure components to construct data center facilities, such as generators, computer room air conditioner
(CRAC) cooling units, power distribution units, wiring, and environment monitoring equipment. The Company
partners with local contractors and building suppliers and works closely with them as the data center construction
progresses. Electricity is a large cost of operating a data center, and is generally purchased from the local utility.
IT Services and Hardware primarily purchases IT and telephony equipment that is either sold to a customer
or used to provide service to the customer. The Company is a certified distributor of Cisco, EMC, Avaya, and
Oracle equipment. Most of this equipment is shipped directly to the customer from the vendor manufacturing
location, but the Company does maintain warehouse facilities for replacement parts and equipment testing and
staging.
Competition
The telecommunications industry is very competitive, and the Company competes against larger and better-
funded national providers. The Company has lost, and will likely continue to lose, access lines as a part of its
customer base utilizes the services of competitive wireline or wireless providers in lieu of the Company’s local
wireline service.
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Form 10-K Part I Cincinnati Bell Inc.