Level 3 To Phase Out Turnkey VoIP PBX Service

Glen Russo, senior vice president for Level 3's channel-ready services, said Level 3 is ending its (3)Tone Business, a hosted, IP-based PBX service. The service, first offered in November 2003, will be phased out by June, Russo said.

Level 3 is stopping the turnkey service because the Denver-based carrier has become more interested in offering a raft of VoIP wholesale services -- such as voice termination, origination and IP-based voicemail -- that resellers can package together for their customers, Russo said.

"We want to focus on the components to enable a broad range of solutions for businesses and consumers," Russo said. "Companies can come to us and pick and choose what they need for their VoIP services."

Jeff Rothell, CEO and president of CentricVoice, a Dallas-based VAR, said that (3)Tone Business is a "small-base business," and so its demise won't have much of an effect on Level 3 partners.

However, Level 3's efforts to restructure its channel and refocus its portfolio to be a more savvy competitor in the IP services space has been a "difficult process," albeit a necessary one, he said.

"They're just going to be a heck of a lot more disciplined and focused in areas I prefer they are focused in anyway," Rothell said.

On Jan. 14 CRN reported that Level 3 is divvying up channel responsibilities among three master resellers that will deal directly with most of its VARs, enabling it to expand further into the VoIP market. The restructuring began in December, solution providers said, and new partner contracts are being finalized.

Russo confirmed that Level 3 is in the process of implementing these changes, but would not confirm the number of master resellers that ultimately will work with partners. He also said that, as previously reported, Rothell's company CentricVoice has been chosen as a master reseller.

He did say that Level 3 is trying to consolidate its direct channel ties to focus only on partners that can go to market with solutions comprising the various IP-based services Level 3 offers. Eliminating the (3)Tone Business is related to those efforts.

"The changes we are making are to consolidate to some extent around large players who can take these component solutions and go to market with those," Russo said.

Smaller partners that want to offer some of Level 3's IP-based services, but that don't have the reach of key larger players, will work directly with the master resellers once the program changes are finalized, Russo said.

"The master resellers are set up as a home for people who don't have the capability to work directly with us," Russo said. "They are making it easier for [partners] to provide some of these services."

Russo said Level 3 is unique as a carrier in that it partners primarily with resellers rather than with telecommunications agents. Telecom resellers own the contract with the end-user customer, whereas agents do not.

One VoIP provider already is trying to cash in on the imminent cancellation of (3)Tone Business and woo the 100 or so Level 3 partners selling (3)Tone to its IP-PBX service.

Nuvio, Overland Park, Kan., this week unveiled a package that allows Level 3's partners to switch to its NuvioCentrex hosted IP-PBX solution, according to the company. Nuvio is offering the same terms and conditions granted by Level 3, along with one month's free service, the company said.

"Through our nationwide network and resources, we are in an ideal position to support the VoIP needs of Level 3's partners and to make their transition effortless," Jason Talley, president and CEO of Nuvio, said in a prepared statement.