Level 3's Patel: Small cells are one of many opportunities for our dark fiber business
Level 3 Communications did not follow the rest of the wholesale provider industry's wireless tower backhaul blitz, but the service provider does see small cells as one of several opportunities for its dark fiber business.
Patel (Source: Level 3)
Sunit Patel, CFO and interim CEO of Level 3, told investors during the Morgan Stanley Technology, Media & Telecom Conference that the company weighs dark fiber opportunities on a case by case basis.
"Dark fiber is a good growth category for us and is doing well," Patel said. "On those kinds of transactions, we do look at what's the capital investment, what's the mix of new and existing builds, and we have found ways to build in ways that's attractive for us."
Patel said that as it expands its dark fiber counts, it "is finding new addressable markets and we tend to take that into consideration."
Like other wholesale providers, Level 3 sees the potential in offering dark fiber services to operators to support C-RAN architectures.
"The small cell opportunity is a bit more challenging and interesting because the good news is that even for small the amount of bandwidth customers need has gone up a lot when you look at dense urban geographies like Manhattan," Patel said. "The economics for small cells have improved, but I would say we're still not a big player in that area yet."
But small cell is just one of many opportunities Level 3 can pursue with either dark or lit fiber services.
"The good news with what we do is given our comprehensive set of products and services and the wide-ranging customers we serve, we can look at in the spectrum of all the opportunities we can invest money and whether returns are attractive," Patel said. "We have more attractive opportunities than small cell, but we do tend to look at what the addressable market is."
Regardless of its approach, dark fiber is a strong seller for Level 3.
During the fourth quarter, Level 3 reported that transport and fiber revenue within its core network services unit was $590 million. Out of that mix, dark fiber made up 6 percent of CNS revenue.
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