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Level 3-tw telecom: Agents’ Reactions Run the Gamut

By Kelly Teal
June 16, 2014 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2014.**

Agents’ reactions to Level 3 Communications’ purchase of tw telecom inc. are running the gamut from “This is terrible news," and “Negative," to “Meh," “I like this combination," and “It will be a good marriage."

The mixed responses come as the entire communications sector consolidates, cutting down on the number of suppliers partners may sell. So far this year, in just network services, Comcast has announced plans to buy Time Warner Cable, AT&T is snapping up DirecTV and Sprint is gobbling up T-Mobile USA. Now, Level 3 and tw telecom join the fray. Together, the providers will create one of the industry’s largest cloud enablers and own a wealth of lit fiber, targeting enterprises, government agencies and other carriers.

To that end, some agents welcome the merger, one gave it a “Meh," and others are not happy about it.

Vince Bradley, CEO of WTG, is one of those who likes the proposed combination. He’s the one who called the transaction “a good marriage."

“Level 3 focuses on data with SIP and [has] a big international play since the Global Crossing merger," he explained. “tw telecom has domestic data and a nice voice product set."

Chris Palermo, president and CEO of Global Communications Networks Inc. (GCN), agreed.

“I like this combination," he said. “tw telecom has a huge footprint not only for on-net locations but for small colos. Level 3 can capitalize on this. tw telecom, much like the cablecos, has trouble selling a burstable service. Level 3 does not have this problem and, hopefully, this merger will allow bursting to existing tw telecom customers over time."

But other agents are expressing fears about a Level 3-tw telecom tie-up.

For one thing, partners and their customers will have even fewer vendor choices, said Nancy Ridge, vice president of Telecom Brokers.

For another, she added, “Level 3 does not have a good track record of integrating new acquisitions from either a network or back-office perspective. Managing another acquisition will negatively impact profit, as time will have to be spent addressing all the changes that will come with it."

Another agent, who spoke on condition of anonymity, called the merger “terrible news."

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