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Comcast-TWC Merger Will Mean 'Short-Term Kick in the Pants' for Partners

By Kelly Teal
February 19, 2014 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q4 2013.**

The $45 billion merger of Comcast and Time Warner Cable will cause some pain and disruptions within the channel, but, over time, partners will profit from the ability to sell fast network services to organizations throughout the country.

That's the takeaway among from analysts at Current Analysis and New Paradigm Resources Group (NPRG).

First, it looks like it's going to be a while before there's any clarity about the combined channel structure. Indeed, Channel Partners asked Comcast and TWCBC for their input; Craig Schlagbaum, Comcast's channel chief, said he is not able to comment and TWCBC has not responded to Channel Partners' inquiry.

To be sure, it could be months before partners have more definitive insight into Comcast's channel plans. In the interim, Craig Clausen, executive vice president of NPRG, predicts a "short-term kick in the pants" from "the common distractions associated with integrated two large companies and the emphasis the combined company will initially place on its direct sales strategy."

"Until this is sorted out, it's challenging at best for any organization to articulate a coherent channel approach," he added.

That's because Comcast will be tied up with navigating intense regulatory scrutiny over the proposed transaction. But when the merger is completed, Cindy Whelan, principal analyst, business network and wholesale services for Current Analysis, expects Comcast to consolidate partners under its channel program framework, rather than TWC's.

"Comcast restructured its program a couple of years ago, bringing in an exec with a great track record in channel development (Schlagbaum) and adding dedicated support people," Whelan said. "It looks to me like it might be a stronger program in terms of resources allocated to working with the channel, compared to TWC. Comcast will certainly evaluate TWC partners to determine relationships going forward. Relationships with master agents already selling for both operators will likely remain in place, assuming metrics are being met, with contracts revised at some point."

However, Whelan said Comcast should be taking time during the regulatory review process to develop its post-approval channel strategy; that way, once everything is nailed down, the company can distribute accurate information to partners. In the immediate future, agents and VARs can look forward to business as usual, she said. But as the merger receives governmental blessings and begins to integrate, complications stand to arise for partners selling both Comcast and TWC.

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