Although Level 3 Communications (Nasdaq: LVLT) has been successful in selling voice, data, SIP trunking and IP VPN services a la carte, the service provider decided that it was time to offer an integrated offering that offers all of those services with a simple pricing plan. Level 3 has done just that with the launch of its Converged Business Network (CBN), an offering that combines Dedicated Internet Access (DIA), IP VPN and SIP trunking voice services. FierceTelecom Editor Sean Buckley recently caught up with Sara Baack, senior VP of product management for Level 3 to talk about the new offering and how it addresses the needs of both single and multi-site business customers.
FierceTelecom: Sara, Level 3 just introduced a bundled voice/data service for enterprises. To start, what was the motivation for the new service?
Baack: We've had obviously a lot of success in general in offering a la carte services to our enterprise customer base, meaning SIP trunking, voice services as well as IP VPN and Internet access. We've also been historically offering an integrated access solution that ties together voice and Internet, but increasingly I think customers have been looking for something that's simpler and they can integrate into their WAN architectures. What we wanted to do was put together a couple of things. One is they are tying together the voice and Internet bundle we already have to our VPN infrastructure and allowing that VPN infrastructure to access the managed services suite that wraps around that VPN and bundle that together into a simple bundle cost structure through different capacity levels. Part of that has to do with the fact that the medium-sized enterprise doesn't have a lot of time to spend on their telecom purchase decisions.
We were hearing this from the marketplace at large for a bundle that can address two different segments: the medium-sized enterprise with five to 20 office locations and the branch office of a larger enterprise. Often what those customers are struggling with is they are purchasing multiple services and even if they are purchasing services from one vendor they have to duplicate their access costs a la carte. They are also are having to do a lot of integration and management to make it work together. We saw an opportunity in the market to simplify all of that on the customer's behalf that puts together over a single port interface, voice, VPN, managed router, managed security and a set of concurrent call paths and a bucket of long distance voice minutes of use that a customer can get from one carrier on one bill with one access circuit. The value proposition is there's a huge amount of simplification of enterprise's buying these and telecom management, but also how it can reduce costs by converging their access infrastructure and basically pooling the use of their bandwidth across their network footprint.
FierceTelecom: How is this being priced? Is it being priced a flat rate or does it depend on the particular vertical industry segment?
Baack: We have a number of bundling tiers that start at the DS1 level with concurrent call paths and bucket of LD minutes, which scales up to 100 Mbps Fast Ethernet with 80 concurrent call paths with a bunch of step points in between. What a customer would get would get is one speed for the entirety of the service. The other bundling component we added into the CBN service we think is a desirable differentiator is we include remote access capability along with that bundle. Basically, we don't want customers to have to piece together the components of telecom networking that allow them to deal with their lives as they know today: they're on the road; they are working from home. The idea is to be able to leverage simplicity wherever they may find themselves.
FierceTelecom: So the offering is ideal for multi-site businesses?
Baack: That's right, but single site business can benefit too. If a single site today is purchasing dedicated for their infrastructure, for their Internet or for voice, they can collapse all of that together and have certainty in terms of their fixed monthly rate every month to manage everything they need out of that site. We do see situations where that kind of a bundle could be attractive for a single site enterprise.