7.5 Things Affecting the Channel

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

7.5 Things Affecting the Channel

There have been some changes in the Channel. Agents need to pay attention because this will result in even more changes in the Channel!

  1. Windstream laid off their Channel Chief, Dan Sterling. Windstream has been trimming the management fat this year. It's all part of the "Synergies" of M&A or getting the balance sheet in shape. It also means that the channel lost one of thier favorites.
  2. Lightyear Network Solutions just lost their CFO. That's another C-Level female exec lost in telecom. It's musical chairs in IT/telecom these days.
  3. Level3's finances are a worry. In a way, all the telecom debt is a worry. Debt goes up, revenues remain flat.
  4. Broadview had to restructure its short-term debt. It's investors had to write down its Broadview holdings since 2007 to the tune of $75M.
  5. TNCI did not get acceptance of its reorg plan. New letter to creditors on July 2 says anyone's plan can be accepted. That doesn't bode well.
  6. VZ is getting rid of copper. [page 8] That will mess up CLEC business operations and reach. EoC doesn't work without copper. Neither does T1, Sip Trunking or DIA.
  7. More consolidation via M&A coming means more layoffs, more integration woes, less carriers to represent and more agents in the field (as sales reps get let go).

7.5 is that the telecom execs don't learn. Those who forget history repeat it. Intermedia (ICI) was the first billion dollar CLEC. It's CEO, David Ruberg, took out his platinum AMEX and bought companies like a drunken sailor. The integration was messy. The talent hardly ever stayed with the new owner. The short term debt became due. They sold to MCI for cash. No more ICI.

Agents are going to have to start selling Managed Services, backup, cloud, apps, M2M, TEM, MDM and other non-copper related services, because survival during the coming wave will require multiple streams of revenue.

The bright side is that the carriers need the Channel. They need as many sales as they can take. The Channel is the best sales option they have.

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