Level 3 grabs two new multi-national enterprise wins
As if to underscore the company's growth in the enterprise segment, Level 3 Communications (NYSE: LVLT) this week announced two new deals that will see it deliver its connectivity solutions to more high-end customers.
Frankfurt-based, logistics automation specialist Dematic has contracted the service provider to build a global VPN solution spanning 15 sites across Europe, the U.S. and Latin America. This new network will support high-bandwidth applications such as AutoCAD. After conducting what it said was a "rigorous evaluation of multiple providers," the company chose "Level 3 for its reliability and cost-effectiveness along with the competence and commitment of its staff."
No more than a day later, Level 3 snagged a contract with Cinemark Brazil, one of the world's largest cinema networks.
The service provider is delivering Cinemark Internet services in Sao Paulo to support connectivity to its VPN of 67 movie theater complexes, which are distributed throughout 35 Brazilian cities.
These two announcements come after CEO Jeff Storey told investors at the Deutsche Bank Media, Internet & Telecom Conference event earlier this week that it did not necessarily need to purchase other service providers.
"We'll continue to ... be opportunistic about it," Storey said. "The benefit of our position is we don't have to do M&A. We're in a position where we have the resources, have the network and the products and services that the market is after so M&A is an option, but it's not a necessity."
While Level 3 continues to report declines every quarter in its legacy wholesale business, enterprise services continue to be the star performer in its Core Network Services division.
In the fourth quarter of 2013, enterprise revenues rose 9 percent year-over-year to $939 million, up from $871 million in the same period a year ago. However, wholesale declined 4 percent to $504 million.
Level 3's Storey: M&A is an option, not a necessity
Level 3 forecasts a flat Q1, but sees Q4 services revenue jump
Level 3's Storey: Enterprise business growth continues despite economic headwinds
Level 3 Chairman Scott to retire in 2014