Partners also view the Comcast-Time Warner deal as disruptive to the broader telecom competitive landscape, and one that would give Comcast a significant leg up over rivals like Verizon or AT&T. For starters, partners said, the deal would allow Comcast to significantly expand its geographical footprint, particularly in areas like New York and Southern California.
"We do business with [AT&T and Comcast], and I think Comcast has a tremendous advantage over AT&T now," said one partner, who asked not to be named. "[Comcast's] pricing is extremely competitive and this expands their footprint dramatically so that they are able to play on a more even playing field with AT&T from a footprint perspective. I think this could be really disruptive.'"
AT&T has been steadily building up a channel presence of its own, since the launch of its AT&T Partner Exchange program last January. And while AT&T solution providers generally applaud the program, the partner said Comcast has presented partners with greater recurring revenue opportunities.
"AT&T spends a lot of money on their channel, but their model is more one-time upfront bonuses," he said. "Comcast is taking a different approach. They are strongly adopting the recurring revenue model and making it possible for partners to build out recurring revenue streams on their network. And our bias is always toward recurring revenue."
When asked for comment, an AT&T spokesman responded in an email to CRN, "AT&T provides choices. This is represented within three distinct channel programs including up-front commissions from the Alliance Channel, a recurring revenue model from AT&T Partner Exchange, and a residual model from ACC Business. Solution providers can find the right fit within our comprehensive channel programs."
Edward O'Connor, vice president of network sales at Total Communications, an East Hartford, Conn.-based solution provider and Comcast partner, agreed that Comcast's acquisition of Time Warner would significantly expand Comcast's U.S. footprint and, ultimately, make Comcast the "800-pound gorilla" of the telecom industry.
"This makes Comcast a much more viable competitor against the AT&Ts and the Verizons of the world, because now they can address those metropolitan areas where, before, they had very little influence," O'Connor said. "I think this will also drive them to increase their product line and dive in deeper to the Ethernet industry [and] do more with fiber-based solutions."
AT&T declined CRN's request for comment.
In a statement released Thursday, Comcast and Time Warner said the merger will generate approximately $1.5 billion in operating efficiencies, spurring speculation that, should the deal go through, it would spark headcount reductions and other restructuring efforts. Intelisys' Pryfogle, though, said he doesn't think the merger would cause either company to scale back on its channel initiatives.
"Naturally, any time you are doing this large of an integration, there are going to be some challenges to work through. You'd expect that," said Pryfogle. 'But we aren't concerned at all about their level of commitment."
TBI's Mercer said the only challenge he anticipates if the deal goes through is merging his Comcast and Time Warner quoting and ordering systems, especially as both companies have been working to improve those systems.
"The only problem will be the ease of doing business, and it's not a people issue or process issue but a systems issue," Mercer told CRN. "But that's the only negative thing I can say about the merger."
PUBLISHED FEB. 13, 2014