TPACs O1 Buy Expected To Benefit Agents

TelePacific Communications intentions to purchase certain assets from rival California CLEC O1 Communications Inc. are expected to be positive for agents of both companies, giving TPAC agents a stronger offering in Northern California and O1 agents the support of a formal partner program.

TelePacific, a Los Angeles-based CLEC serving California and Nevada, announced Monday a definitive agreement to acquire O1s small and medium business customer base, network and a data center. O1, which is based in Sacramento, will continue to own and operate its wholesale business. The transaction, terms of which were not disclosed, is expected to close by the end of the year.

TelePacifics channel chief, Ken Bisnoff, senior vice president of strategic opportunities, told PHONE+ that his company would acquire agent agreements from O1 as part of the transaction. He said O1 has about 40 contracts and about eight to 10 active sellers most of which overlap TPACs partner base. O1 developed an agent program briefly, shuttering it in 2008 to focus its efforts on the wholesale channel, Bisnoff said. The company has continued to pay agents under their agreements and kept one channel manager, Chris DeZorzi, to support existing agents. DeZorzi as well as about 50 O1 employees are expected to be hired by TelePacific when the asset transaction closes, Bisnoff added.

Bisnoff said TPAC will honor the O1 agreements, but where practicable will attempt to consolidate contracts with O1 agents that also represent TelePacific. In addition, O1 agents will benefit from the channel support, portals and training that are provided through the Telepartner Program; O1 did not have dedicated infrastructure for its sales partners.

As a result of the deal existing TelePacific agents will have access to a stronger offer, including 18,500 square foot SAS-70 certified data center in Sacramento, which will allow TelePacific to offer additional managed services over its MPLS network. TelePacific has 11 other data centers and it is pursuing certification for those, he said, meanwhile agents can offer customers throughout the state colo capabilities in the O1 facility.

We have always had upside potential in that area,” said Bisnoff, referring to the Northern California region O1 serves. Gaining more market share without a greenfield build was a driver in the transaction, he added. The data center as a key strength for O1 in the region.”

Dominic Antonini, president of Telcombrokers, a master agency based in Santa Ana, Calif., is upbeat about the deal. I am very pleased with this announcement because O1 had lost their commitment to the agent channel,” he said. TelePacific has both a track record of success and a steadfast commitment to the channel. O1 built something unique, and I’m confident that the O1 assets will benefit both TelePacific and its agents.”

Jeffrey Ponts, executive vice president for Datatel Solutions Inc., a master agency in Roseville, Calif., agreed. The positive side of this purchase is that TelePacific is a financially strong, well managed, channel-focused CLEC that will ensure a secure future for the agents and customers of O1,” he said.

However, Ponts added that consolidation is a double-edged sword.”  Competition creates innovation, competitive pricing, and commission levels which is good for the channel.  When a CLEC purchases another CLEC with similar products it removes a competitor, and competition from the market place,” he explained.

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