I had an interesting conversation with a newly minted channel manager this week. He was leaving a CLEC to return to the cable business.

There is a huge difference between the two businesses.

One is Demand. Cable is a monopoly most often, a Duopoly the rest of the time. What other service provider could say THIS? That monopoly supplies Demand for services. And that demand is there despite the poor customer service!

Cable has brand recognition. CLECs do not.

CLECs (or whatever they are calling themselves these days) have to create demand for their products.

We are at a point where the CLECs all look the same again – like in the days of the Integrated T1. The Integrated T1 was the best thing that ever happened to CLECs (after UNE-P). SD-WAN, UCaaS and even security are the 3 business lines that EVERY single company is offering. The noise is incredible. The fluff will choke a partner.

UC isn’t a price issue as many channel managers like to say. The pricing is all over the map. Anyone can shop it down if they want to. It’s about telling a good story and service delivery. It’s about knowing what benefit your brand of UC delivers and how. I’m not certain many channel managers can explain that. If you can’t, go find out NOW!!!

Jeffrey Gitomer used to say that car dealers were lazy. It was all about the price of the car. Buy here and save $1000. No car dealer talks about what it is like to own the car. What’s the customer lounge like? Ferman Mazda (when I had my RX8) had a customer lounge with donuts, coffee, water, TV and internet! And they were quick. And they washed the car each time. Get the picture? If not, maybe you should go work for cable.

It really comes down to the Story. Every sale, every customer is another chapter to that story. What was the outcome? Why did they buy? How was the service delivery?

You can sit at your desk and complain about pricing — and many do — or you can put together a story about why the value is more than the price. If not, you won’t be making quota but you will be making excuses.

Sprint is sitting on $37 Billion of debt!

T-Mobile is bogged down with $26 Billion in debt.

This deal to Merge with Sprint is all stock deal valued at approximately $59 billion – with Pro Forma 2018E Service Revenue of $53-57 billion, but combined debt of $63B. And then they are going to spend $40B to roll out 5G to rural markets??? FYI… AT&T’s total CAPEX spend is $25B and VZ is at $17B.

“The New T-Mobile plans to invest up to $40 billion in its new network and business in the first three years alone, a massive capital outlay that will fuel job growth at the new company and across related sectors. This is 46% more than T-Mobile and Sprint spent combined in the past three years.”

Per Bloomberg, “Between overhead redundancies, overlapping store locations and duplicative cell towers, the companies are estimating more than $6 billion in annual cost savings.” That is IF they can get out of leases – and after they fire a ton of people, so all those employee projections don’t include the synergy layoffs. It’s all crap. Of all the mergers in telecom, this one looks more like Nextel-Sprint than MetroPCS-T-Mobile, which was tiny in comparison and didn’t leave the resulting firm with too much debt to service.

THE FORWARD THINKING (I use that term lightly)

“Wireless, broadband, and video markets are rapidly converging. AT&T is now the largest TV provider in the country. Comcast added more wireless phone customers last year than AT&T and Verizon combined, and Charter is launching wireless this year. And, more than 1 in 10 Americans (12%) use wireless as their only Internet or broadband connection.” In other words, cable is going to kick are asses, so we decided to merge. Bigger is Better to Wall Street.

“Broadband. 51% of Americans have only one high-speed broadband option – no choice at all! The combined company will create a viable alternative for millions by enabling mobile connections that rival broadband, driving prices lower and improving service.”

We will wave the flag that we will be a viable replacement to wireline broadband to hide the fact that the mobile pie isn’t growing, that is just a game of take away — and the cost of acquiring a customer is rapidly rising**.

This is blatant BS: “This isn’t a case of going from 4 to 3 wireless companies – there are now at least 7 or 8 big competitors in this converging market. And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G,” added Legere. Seriously, there are only 4 national cellcos. Everyone else buys from those 4.

I am mainly against big mergers. They never work out. It is all for Wall Street.

The big winners are AT&T and VZW (and Comcast) who will crush them while they are working through legal/regulatory and the mess of integration.

** NOTE: BTW, the UCaaS/Hosted VoIP space is in a similar boat with the rising cost fo customer acquisition.