Level 3 shutters (3)Tone biz; NGT hopes to gain customers
One company's exit strategy may prove to be another's business case as New Global Telecom stands to inherit many of Level 3 Communications' channel-partner voice-over-IP customers by June 15 when Level 3 turns off its (3) Tone business service.
Level 3 announced the termination of its (3) Tone wholesale service for business at the end of January. Last Thursday, according to a New Global Telecom spokesperson, Level 3 introduced the company to its (3) Tone partners as having met the criteria that was important to them in a new provider, stopping short of crowning NGT a “preferred provider.”
However, as of late last week, Level 3's Glenn Russo, senior vice president of transport services for Level 3, said the company had not publicly named a provider for customer referrals. Nonetheless, New Global Telecom scheduled a meeting for Monday with (3) Tone partners and hopes to convince them to move to its network as Level 3's service goes dark.
The (3) Tone service is an enterprise VoIP solution sold through channel partners and was launched in September 2003. NGT operates a similar wholesale service called 6DegreesIP. Level 3 accumulated about 100 channel partners since the service was launched. It never has publicly stated the number of lines its partners turned up, but NGT puts the number at about 11,000.
“The business was not scaling at a level that was at all material for Level 3. But 11,000 subscribers is very meaningful for New Global Telecom,” said Richard Grange, president and CEO of NGT.
Grange added that he sees the wisdom in Level 3's move and applauds it.
“And not just because we are going to pick up a significant portion of the business. It really does make sense [for Level 3],” he said.
Level 3's Russo said that after looking at its road map, the company concluded it had two very different VoIP platforms — one a turnkey platform for targeting the business user and a component-based platform for the consumer market — and felt it was important to focus resources where it would get the best return.
“Technically and architecturally, we preferred the component structure and wanted to focus our investments there rather than on the monolithic, shrink-wrapped solution we had in the (3) Tone business,” Russo said.
One Level 3 partner that has already chosen NGT as its new provider thought that was a good choice.
“[Level 3] were trying to give a cookie-cutter solution, and in the wholesale business, you don't really do that,” said Jared Welch, director of product development for Access Point.
Access Point is based in Cary, N.C., serving more than 5000 commercial accounts with 23,000 local service lines across 18 eastern states. The company still uses Level 3 for transport as will many of the former (3) Tone customers. However, Welch said, “They weren't ready to be in the business they were in. They are getting back to what they do best, and that's being a neutral player.”
Grange believes the industry has finally reached the tipping point. His company has tipped the balance in its favor by also signing Santa Barbara, Calif.-based TMC Communications and CentricVoice, a voice-enabled ISP out of Dallas.
“We have been doing this in the TDM space since 1999,” Grange said. “Last year we managed more than 3.5 billion minutes. So we have a very mature business process.”
That's one of the reasons Access Point chose NGT as its transition provider.
“They are seasoned. They have a great platform. Their training is excellent. And we wanted to do business with someone who has been around for more than six months,” Welch said.
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