Much like the Walt Disney Company working on acquiring 21st Century Fox, many telecommunications companies strive to acquire opposing businesses to not only eliminate the competition but expand their footprint, consolidate resources and better overall operations. Disney, for example, will gain a better presence in the streaming vertical with Hulu, while growing its name in movie production houses and other cable networks as well as strengthen its leadership pool. Similarly, CenturyLink’s acquisition of Level 3 Communications, Inc. will position CenturyLink as a more robust global network service provider offering a wider range of services and solutions.
What does this mean for the end user? How can these acquisitions help and hurt businesses? My experience in sourcing communication services has proven that businesses can leverage these market changes from both a financial and service standpoint but it can also negatively impact service and cause support challenges putting a higher demand on customer involvement.
Expanded infrastructure and service portfolio – The aforementioned acquisition considered the opportunity it would have to offer a wider menu of services for voice and data solutions, further global reach, and improve network capabilities by leveraging each other’s fiber infrastructure investments. Therefore, where companies might have had network constraints resulting in dual network or telco service providers, they now have the ability to consolidate their supply base, services, and support teams. These changes can improve customer operations by allowing for more effective use of services that require fewer resources internally to both support various services and manage multiple providers. These efficiencies offer better use of resource time and lower cost opportunities through leveraging total volumes on a global scale. There will most likely also be a bigger menu of solutions to consider with incumbents where before alternates where always required. In addition, better pricing and incentives can become available due to provider ability to supply and support services that are now considered “native” to their own portfolio.
Better tools and resources – Improved and increased service offerings can be attractive to customers, but having extra hands and user-friendly tools can warrant additional considerations. Technical and customer support assets might have been bare or bad before where the acquisition might result in a more diverse team who can give you the guidance needed to make informed decisions and true “support” based on your unique requirements. Aside from personnel, customers rely on the tools that help manage troubleshooting, orders, and billing. Tools that offer insight into the health of the account and the ability to implement changes or simply pay bills easily can make or break a relationship. If the acquisition produces more advanced yet easy-to-use tools, clients will be more inclined to take advantage and award additional business.
So now you have a variety of services and feel great about moving into the future with your provider; what are the risks you may face with this expanded relationship?
Lengthy integration timelines – There may be a very explicit road-map developed while companies are looking to merge but when push comes to shove, there is no true defined timeline for when will it be implemented. Sometimes it can take months to years before the benefits are reaped in terms of consolidated services, resources, and tools, and customers are still left with multiple providers, different billing platforms, and several account teams. Therefore internal measures and investments are the same and may be more intensive as the transition slowly starts to peak its head.
Resource constraints – What happens if you are assigned a resource who has no clue about your business culture or existing service requirement but was kept on board due to financial considerations or that your rep was simply reassigned? If you are engaged in a merger of networks with limited or uneducated support teams, this can result in both an operational and financial burden you are not prepared to take on.
Billing changes – Although the FCC tries to prevent monopolies from happening, who is to say that once an acquisition is complete, your new “merged” provider won’t leverage its financial investments to rack up the pricing. They might also apply charges differently to each service or start charging you for ad-hoc tools and support services given to you for free before.
At the end of the day, these acquisitions can benefit the provider financially allowing for debt payment and ongoing improvements to its own infrastructure. What is the cost to you, the end-user? Is this headache really worth the risk and wait? Be mindful of what you might be able to accomplish but be prepared for what’s in store.