On April 22, CenturyTel (CTL) – which operates as CenturyLink thanks to the buyout of Embarq that closed last year – said it will buy Qwest Communications International Inc. (Q) in an all-stock, tax-free transaction. The news shocked many industry observers, not the least of whom are the companies’ respective channel partners.
Together CenturyTel and Qwest will reach 37 states with in-house broadband and wireline services, and outsourced video and wireless products. And once the $22.4 billion deal ($10.6 billion before CenturyTel assumes Qwest’s debt) closes, CenturyTel also predicts it will run a lean operation; it plans to save $575 million in three to five years by cutting overhead costs, and duplicate jobs and systems, and another $50 million by chopping capital expenditures. Most of all, CenturyTel will become the third-largest carrier serving business markets, according to research firm ATLANTIC-ACM, holding a 7.6-percent share in the United States, behind AT&T Inc. (T) and Verizon Communications Inc. (VZ) That could have a major impact on the indirect sales channel; the Qwest Business Partner Program (QBPP) arguably is the largest in the country, so agents want to know what’s in store for the channel once CenturyLink is in charge.
There’s no clear answer.
CenturyLink runs an indirect sales channel that combined Embarq’s partner presence in the SMB and enterprise space with CenturyTel’s focus down-market. But the company has been very quiet about its channel strategy – at least to the media, deferring requests for interviews with leadership about its channel plans.
A spokesperson for CenturyLink did not respond to requests for comment on the ILEC’s plans for the channel once the Qwest acquisition is finalized. However, Ted Wietecha, Qwest’s corporate communications manager, said, “It’s too early to tell.”
“For now it's business as usual and we will continue to work with Qwest Business Partners to provide customers with exceptional products and services,” he said.
Ken Mercer, senior vice president for Telecom Brokerage Inc., a large master agency based in Chicago that works with both telcos, on April 22 sent a memo to TBI subagents that puts a positive spin on the pairing.
“We here want all of our agents to know that this possible merger with Qwest could be a very good thing with more footprint, more products and more opportunity,” Mercer wrote. He added that he did not expect to see “changes in operation, product or commissions happening in the next 18 months.”
