Posted: 2/2004

C&W Dumps Independent Sales Agents


By Josh Long

Cable & Wireless USA axed its
network of channel partners in December after putting its subsidiaries into
voluntary bankruptcy and signing an agreement to sell its U.S. hosting and IP
businesses.

The move clearly riled independent sales agencies, which not
only were denied their November paychecks, but told their contracts had been
canceled.

Basically they are saying, Thats it. Game over,
says Rick Sheldon, cofounder of master agency Intelisys Inc. We understand
thats business. We obviously dont like it. They basically are wrapping up
shop, and we are left with nothing.

The C&W executive who spoke with agents did not return a
phone call seeking comment. C&W spokesman Chad Couser also declined comment.

Bill Lang, CEO of W. Lang & Company Inc., represented
C&W for 12 years, ranking among its largest agents. Lang says C&W
managed a good and fair agent program over the years. However, Decembers
announcement marked the low point in the relationship. We were told not only
are we not going to be paid, but we have no further role supporting these
customers, Lang says. When I watch companies like this making a
decision without fully understanding [the implications between the agent and the
customer], I find it unprofessional and arrogant.

Another agent says C&W would be hard-pressed to build a
new fleet of zealous independent agents if the U.K.-based telecommunications
company ever decides to re-enter the U.S. market.

C&W disclosed an agreement to sell its U.S. hosting and IP
businesses to a Los Angeles-based private investment firm Gores Technology Group
LLC for $125 million six months after announcing plans to exit the U.S.
market as part of a broad reorganization aimed at improving the bottom line. Other companies could outbid Gores Technology Group.

U.S. sales agents have seen drastic changes at C&W in
recent years. Last year, C&W sold most North American data customers and the
U.S. voice business to New Edge Networks and PRIMUS Telecommunications Group
Inc. Ted Schuman, president and CEO of master agency PlanetOne Communications
Inc., says his company spent $10,000 in legal fees, petitioning the FCC to
prevent C&W from just shutting down its entire voice network overnight.

In the fall of 2001, the company let go most of the direct
sales force responsible for small and medium companies and large corporate
accounts, transferring the business to large independent sales agencies. The
carrier gave independent partners roughly 20,000 customers, a C&W executive
told PHONE+ at the time.

At that time some large master agencies praised C&W,
although Lang says the carrier handed accounts to some agencies that had not
booked much business with the company.

The heyday of the C&W agency program stretched from 1995
to 2000, a news source says, adding C&W by 2001 was booking about $7 million
a month in sales through its channel partners. The source notes the program
suffered as the company sought to reduce overhead in the United States.