POTS Aggregator, Ernest Communications, was acquired by Birch Communications back in June, 2013.
What this means to Ernest:
Financial Woes – It’s been rumored that Ernest was struggling financially, so the acquisition by Birch should remedy those issues.
Web Portal – Up to this point, Ernest didn’t have a web portal to offer to their customers. This could be a huge barrier to sales because Ernest core business was POTS management and aggregation. Multi location companies turn to POTS consolidation companies to help them manage their POTS or business line inventory. POTS aggregators form agreements with the various incumbent phone companies that service different regions of the United States and then resell their POTS lines and DSL to multi location companies. The benefit to the multi location companies is that they can receive business phone line service from one provider, receive one phone bill and have one point of contact for Moves, Adds, Changes and Disconnects (MACDs). Every one of Ernest’s competitors offered a web portal, to facilitate POTS inventory management. Without such a portal, Ernest was losing sales. Birch possesses a portal and will make it part of their service offering.
Improved Suite of Services – Up until now, Ernest was limited to reselling POTS lines and DSL. Birch offers a full suite of Competitive Local Exchange Carrier (CLEC) services, including T1, Integrated T1, PRI, Hosted VoIP, MPLS and SIP Trunks. Ernest, now Birch, will be able to offer those services.
What this means to Birch:
Access to Ernest’s Customer Base – Ernest services a number of multi location and national companies. These companies are heavily sought after by CLECs because of the amount of money they spend on telecom services. POTS services are just the tip of the iceberg. Larger, multi location services typically utilize MPLS and other wide area networking services, large internet circuits, call center solutions and elaborate business phone systems. These services produce a large amount of revenue and are considered “sticky” because once they’re established it can be a major undertaking to change service providers.
Entrance to a Less Competitive Market – POTS aggregation is only offered by few providers, most notably Granite Telecom and BullsEye Telecom. Even though a POTS line only costs about $30 a month, POTS aggregation contracts can be worth tens of thousands of dollars each month. Birch will acquire Ernest’s know how, existing book of business and established agreements with the Incumbent Local Exchange Carriers (ILECs).
What it means to the Industry:
If Ernest went out of business, the POTS aggregation sector would be dominated by one or two service providers. Pricing would have increased and service probably would have suffered. Ernest presented a nice alternative to the larger, less nimble POTS consolidators. Since Divestiture, it’s been proven that more competition results in better pricing and service. This deal will also help Birch become a bigger player in the telecom industry. Again, more competition leads to better service and pricing.
If your company is looking for POTS consolidation or any other telecom service, contact CarrierBid today. Our professionals can help you navigate through the many different service and provider options available.