Telecom Woes Impact Sales Cycle

In particular, they are spending a considerable time fielding customers' questions about the financial stability of individual carriers.

"Hopefully, [the carrier is either smart enough or big enough to pull through this. Right now, we are in the midst of several discussion points, since just about everyone in the telecom space is in the news [because of financial issues [or accounting issues, which is raising customers' eyebrows and slowing the natural course of the sale," said Paul Melton, executive vice president of marketing at service provider Global Linking Solutions, Weston, Fla., which represents AT&T, Sprint Communications and Qwest Communications International.

Melton said he is being forced to field questions on the entire telecom sector, including carriers he does not represent.

Carrier turmoil continued last week as WorldCom president and CEO Bernard Ebbers stepped down shortly after the company reported a 65 percent drop in earnings and lower sales.

In addition, Qwest reported a loss of $698 million as sales dropped 14 percent.

Both companies are facing investigations of their accounting practices by the Securities and Exchange Commission.

Meanwhile, Genuity said last week it plans to lay off up to 30 percent of its staff this quarter.

Emmet Tydings, president of master agent AB&T Telecom, Gaithersburg, Md., said concerns at the agent level have risen as customer questions have increased, but he said longer discussions with customers about carriers are only a blip on the radar screen. "Everyone is in the same boat. Customers still need these services, so the show must go on."

Customers' carrier concerns range from SEC investigations to mounting debt, losses and lower sales. Some customers are even questioning individual carriers' ability to stay afloat, service providers said. In this shaky economy, tapping a stable carrier partner has become paramount, they said.

"Working as an agent for Cable and Wireless, we don't have to worry that they're going to be around tomorrow, especially in light of the spectacular failures

of some other service providers," said Peter Sattin, president of Array Technologies, New York. "PSINet comes to mind."