Sixteen months after its acquisition of Global Crossing, Level 3 Communications Inc. announced Tuesday that it is rolling out a new channel strategy that combines the respective agency and referral partner programs of both carriers and introduces a new partner program for VARs.
Channel Chief Michael Jerich, vice president of the Level 3 Indirect Channel, told Channel Partners in an advance interview Jan. 15 that the company's new Channel Partner Program for traditional telecom agents will finally integrate the contracts and support systems of the previous Level 3 and Global Crossing programs; staff resources were integrated in January 2012.
"This is the next evolution, which is bringing the two programs ... together under one umbrella and bring some uniformity across the board in terms of tiering and contracts," Jerich said.
Significantly, the CPP institutes a new tiered structure – Elite, Premier and Authorized – that defines both revenue minimums and sales quotas associated with levels of support as well as additional benefits like dedicated account teams and MDF. In the pre-launch interview Jan. 15, Jerich said the minimums and quotas had not yet been established definitively.
Jerich also said Level 3 has revised its teaming policy so that it is based on the entire customer relationship, not just a specific deal.
Jerich said Level 3 will be rolling out new contracts to partners this week along with notification of their tier, commission rates and any changes to their benefits. All partners are expected to be on the new contract by the end of first quarter.
Jerich said a majority of partners will fall into the Premier category. Because the entry-level Authorized tier does include revenue minimums, Jerich said some partners – less than 5 percent – will be dropped unless they double-down on their commitment to Level 3. "Our intent wasn't to clean house," he said.
Ken Mercer, senior vice president of master agency Telecom Brokerage Inc., told Channel Partners Jan. 17 that he had not seen the new contract, but was told that commission rates would be frozen on past business until renewal and changes would be on business going forward. While he acknowledged that commission reductions are possible, Mercer said he expected the alignment of resources to performance to make Level 3 easier to do business with.
Mercer said that the new structure puts agents on a level playing field; terms and rates varied significantly between Level 3 and Global Crossing legacy programs. "It's fair. We will start at a tier and grow," he said, noting that the program rewards partners that choose to do more business with Level 3 and that established partners can no longer rest on their laurels.