Level 3 Goes Wholesale

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.

Level 3 is discontinuing the service because the Denver-based carrier has become more interested in offering its VoIP wholesale services--including voice termination, origination and IP-based voice mail--that resellers can package together for their customers, Russo said. The service also was the least popular of Level 3's VoIP offerings, he added.

Jeff Rothell, CEO and president of CentricVoice, a Dallas-based VAR, said (3)Tone Business is a "small-base business," 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 VoIP 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.

A smaller, channel-friendly carrier such as Level 3 stands to benefit from the consolidation in the telecom space that has VARs looking for alternative partners to the large carriers, said John Freres, president of solution provider Meridian IT Solutions, Schaumburg, Ill.

Last week, SBC Communications announced a $16 billion buyout of AT&T, and rumors surfaced that Qwest Communications made a $6 billion bid to purchase MCI, while Verizon was also showing interest.

CRN previously 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 now being finalized.

Russo confirmed that Level 3 is in the process of implementing these changes, but would not comment further. He did say that Level 3 is consolidating 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.