Enterprise-Hungry Alpheus To Lean on Master Agents in Texas

Alpheus Communications is not a name with which most Texas businesses are probably familiar.

With the help of the indirect sales channel, the company is hoping that changes real soon. On Feb. 1, Alpheus began serving the enterprise market.

Early reception to Alpheus has been “phenomenal,” Layne Levine, senior vice president of enterprise and channel sales, told us last month during an interview at the Channel Partners Conference & Expo. “We just signed a very large auto group a week ago. We just signed a deal with a Chinese delegation in Houston … the reception has been phenomenal.”

For years, the company has been a carrier’s carrier or wholesale provider of fiber-optic and networking solutions named after the river god in Greek mythology. Its roster of wholesale customers includes the usual suspects of mighty names: AT&T, Verizon, Level 3.

“We have the largest network in Texas outside of AT&T,” Levine declared. “Nobody can claim that. We are Texans based in Texas doing business with Texans.”

The Gores Group, a Los Angeles-based private equity firm, last year acquired Alpheus from El Paso Corp. and Genesis Park L.P.

The strategic intent of the acquisition, Levine said, was to target the enterprise market. The company offers Ethernet, data, voice and colocation services, he said.

Businesses and organizations that it considers fair game as potential customers include law firms, oil and gas companies, real estate firms, hospitals, schools and local governments. Alpheus is focused on companies based in Texas with more than 50 employees and in excess of $1 million in revenues, preferably with multiple locations, Levine said.

Alpheus is going to be relying to a large extent on the indirect sales channel to win accounts. Alpheus recently inked an agreement with Telarus Inc., a master agency. Alpheus has hired a partner sales manager, Mark Mohr, who was a channel sales manager at both PAETEC and XO, according to his LinkedIn account. Alpheus also had 14 direct sales reps in Texas as of March.

“We don’t want to sign every single master agent … out there,” Levine said. “We don’t want to be a quoting machine. That’s not our game … We want to get in and do big multi-location deals with … a couple of partners and Telarus fit the bill. They have a very entrepreneurial style, they are easy to do business with, they move quickly.”

Since its founding in May 2002, Telarus has spent several years developing relationships with service providers that have a national presence. Patrick Oborn, vice president of business development with Telarus, said the partnership with Alpheus fit his company’s strategy to expand its focus to certain regions of the country and specific product areas, namely fiber in this case.

Telarus already has a number of relationships with service providers in Texas, including AboveNet, Comcast, Time Warner Cable and XO Communications in the Lone Star State. Utah-based Telarus also has a handful of employees who are based in Texas.

“We’re kind of putting all of our armies on Texas and all of our armies on Utah,” said Oborn, who co-founded Telarus, a master agency that is celebrating its 10th year in business this year.

Oborn pointed out that Alpheus owns fiber across Texas, including in suburban areas, and he said the partnership will enable Telarus to target mid-market areas with such products as fiber and colocation.

Levine expects channel partners will account for the lion’s share of Alpheus’s enterprise sales.

“I would anticipate over 60 percent of our revenues on the enterprise side coming from the channel program,” he said. “It’s the key strategic direction of our company as we go forward,” Levine explained, referring to the agent channel.

“We want to partner with some folks who already have very set relationship across the country, who have a great reputation, who are known for high integrity,” Levine noted, describing the partners Alpheus is seeking. “We are in conversations with three others who we think fit that bill.”

Alpheus presently is focused on Texas enterprise and wholesale accounts, but the company may have greater ambitions over the long term.

Asked where he sees the company in a year, Levine responded, “I don’t believe we’ll just be a Texas-based company a year from now. I think we [have] aspirations to continue to grow.”

Alpheus CEO Scott Widham has experience selling to the enterprise market. He led Broadwing Communications, which was sold to Level 3 Communications in 2008 for $1.6 billion, according to his bio on Alpheus’ website.

Levine also worked at Broadwing, a communications provider that he said transformed from a company with no presence in the enterprise market to one with a significant number of marquee national accounts that previously were serviced by such telecom titans as AT&T, MCI and Sprint. Levine said he later worked at ITC^DeltaCom, helping to grow a service provider that hadn’t increased revenues in five years; EarthLink acquired ITC^DeltaCom in 2010.

“I go to places that are either broken and fix it,” Levine said, “or I go to where it’s nonexistent, doesn’t exist yet and I create it with a great team.”

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