Planet One Communications Asks Top Execs: What's The Impact Of M&A?

recent M&A activity

With that in mind, Ted Schuman, CEO of leading master agency, Planet One Communications, brought together top executives from five carriers that recently underwent or are in the integration process of megamergers of their own. Execs from CenturyLink, Windstream, Earthlink, Level 3, and MegaPath were on hand Wednesday at Planet One’s annual partner summit in Phoenix, Ariz., to set the record straight on how consolidation impacts the channel.

“Between all those mergers this year, the biggest question on everyone’s mind is how does this change the channel? Are headcount reductions coming, are teaming changes coming, is the focus on the customers they’re trying to acquire changing?” said Schuman in a phone interview with CRN.

“There’s always anxiety with mergers, especially if you’ve got a partner Global Crossing, and you've never done business with Level 3, and maybe you don’t know their management team. Are they channel-friendly? Will they change my compensation plan?” he said.

With Schuman playing moderator, the panelists touched on topics ranging from how the companies’ integrations would proceed, to how emerging technologies would affect product sets.

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Cardi Prinzi, executive vice president of sales and marketing at Earthlink, who was on the panel, told CRN that overall, Earthlink Business' partners are excited about the IP service provider’s various acquisitions over the past year, because they’ve created a company with greater reach and a more diverse product portfolio.

“We’re building a company with much stronger capabilities,” said Prinzi. “The sum of all the parts is greater than the whole.”

EarthLink has made a series of acquisitions to beef up its Business unit, with a number of big buys in just over a year. It acquired telcos STS Telecom, DeltaCom, and One Communications, and has also moved to build out its managed services portfolio with the purchases of Synergy Global Solutions, Business Vitals, and Logical

In EarthLink’s case, the series of acquisitions will allow partners to an expanded nationwide fiber network, and a new voice and data IP product set, including hosted voice, MPLS and managed services capabilities.

Prinzi acknowledged that with the frenzied pace of consolidation in the carrier channel of late, there naturally is some concern among agents and partners who want to be sure they’ll continue to be a force of growth for the channel. But he said it’s hard for carriers to replicate the breadth of sales experience, deep client relationships, and level of expertise in the reseller community.

“We’re planning on leveraging that experience as much as we can,” said Prinzi.

Other megamerger players represented on the panel were CenturyLink, which closed its $12.2 billion acquisition of Qwest in April, immediately pouncing on cloud provider Savvis for $3.2 billion later that month. Windstream is in the process of closing it’s 2.3 billion acquisition of PaeTec, which had its own acquisition spree prior to the Windstream deal. In April, Level 3 moved to acquire Global Crossing in a $3 billion deal. And MegaPath also splurged on an acquisition three-way, combining forces with Covad and Speakeasy last fall.

Schuman said the feverish pace of mergers and acquisitions hasn’t affected business for Planet One, which saw 27 percent growth in 2011, up from 21 percent in 2010.

Planet One represents about one thousand agents, and has 25 carrier direct and about 180 indirect relationships with carriers worldwide.