CenturyLink, Level 3 to seek broader SD-WAN opportunities

CenturyLink data center

As CenturyLink and Level 3 Communications finish their merger, the service provider sees an opportunity to further extend its software-defined wide area network (SD-WAN) capabilities to an even broader audience.

RELATED: CenturyLink confirms it will acquire Level 3 for $34B

Sunit Patel, EVP and CFO of Level 3 Communications, told investors during the Wells Fargo Securities Technology, Media and Telecom event that SD-WAN will produce new efficiencies.

Multisite businesses have the option of using various broadband connections at smaller satellite offices or higher speed MPLS-based connections at a bigger headquarters site to create a hybrid network environment.

“As we look at the market over the next three to five years, we think that SD-WAN moves in the direction of smaller locations, people generally buying high-speed internet access and for larger locations needing more complex services,” Patel said. “With any kind of broadband connection, you can have a lot of software services, so we see the market going in that direction as a positive trend.”

CenturyLink and Level 3 service come to the SD-WAN table from slightly different but complementary angles.

In June, CenturyLink introduced a new fully managed SD-WAN solution. Customers who purchase SD-WAN bundles all of the necessary elements including site connectivity, equipment, software licensing, configuration, performance tuning and monitoring with a management and analytics portal. A business customer can manage their own policies or have CenturyLink manage them.

CenturyLink can manage connectivity from a wide range of cable and telco providers as part of an aggregated solution.

For its part, Level 3 has not launched a formal SD-WAN service itself. The service provider told FierceTelecom in a previous interview that if and when it does release a SD-WAN service, it wants to offer business customers something different.

Today, Level 3 offers business customers a hybrid WAN service that allows customers to connect locations over various access mechanisms.

What will be interesting for the combined CenturyLink and Level 3 is that they will have a larger breadth of on-net facilities to deliver SD-WAN services.

Upon completing its purchase of Level 3, CenturyLink will gain an additional 200,000 route miles of fiber, including 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents.

The combined company will also have a greater density of on-net buildings connected to its fiber network, a critical element to delivering Ethernet and cloud-based services. CenturyLink will increase its on-net fiber footprint by 75 percent to approximately 75,000, including 10,000 buildings in EMEA and Latin America.

“As people move in the SD-WAN direction, they still need larger pipes given the demand backdrop,” Patel said.

Besides offering benefits for customers, the combined company says that because SD-WAN runs on software-based platforms, it can enhance how it activates and manages services.

“The benefit for us actually is that you can configure a service on the fly with customers because it’s all software driven,” Patel said. “It’s an exciting development that the industry is working on and I think there will be a lot of benefits, but they’re not just for customers because it also drives big productivity improvements in companies like ours.”