CenturyLink says Level 3 acquisition boosts SMB network reach, service set

CenturyLink sign on building (free to use)
SMB customers are squarely in Centurylink's sights, with more on-net fiber and service capabilities being made available to them. (Image: CenturyLink)

Now that it has Level 3's assets under its belt, CenturyLink has a larger network footprint that will allow it to address not only large global multinational enterprise but also its small to medium-sized business customer base.

By acquiring Level 3, CenturyLink gained a larger on-net building footprint, giving it more options to reach more businesses with its own network facilities. The acquisition of Level 3 will increase its reach by nearly 75 percent to approximately 75,000, including 10,000 buildings in EMEA and Latin America.

Vernon Irvin, president of CenturyLink’s government, education, medium and small-business group, told FierceTelecom that it can combine the broader on-net footprint with its own SMB experience.

RELATED: CenturyLink challenges cable with small business-focused call center in Louisiana

“Level 3 had a big focus on large enterprise markets, including wholesale and we have a pretty vibrant small medium business,” Irvin said. “If you think about the real upside there, it is our ability to take our go to market customer experience, passion for smaller customers and the tremendous assets of both near-net and MTU buildings that Level 3 brings."

Irvin added that combined with Level 3’s earlier acquisition of TW Telecom, which focused on a mix of small and large customers, CenturyLink has more firepower to effectively battle other providers for small business customers.

“When you merge a pretty good go to market strategy with a great set of assets, I think we’re excited about our chances there in a very competitive marketplace,” Irvin said.

Battling cable’s SMB threat

One competitive threat that continues to loom large for CenturyLink is cable with Charter and Comcast reporting strong gains in their fourth quarter SMB segment results.

Comcast reported that business services revenues rose 12.2% in the fourth quarter to $1.68 billion. The cable MSO said the revenue jump was related to increases in the number of customers receiving its small and medium-sized business services offerings. 

Likewise, Charter reported that fourth quarter total commercial revenue in SMB and enterprise combined grew by 6% to $1.5 billion. SMB revenues jumped 4.5% year over year to $931 million, while Enterprise grew 8.3% to $570 million.

Irwin, a former Charter executive before coming to CenturyLink, knows the cable threat all too well.

“I understand the cable capability because I came from Charter,” Irvin said. “What made me decide to join CenturyLink and continue to stay is I am excited about merger of the two companies because what need is more fiber, more on-net buildings and a great customer experience.”    

A fuller portfolio

But fiber assets are just one part of SMB service equation.

The Level 3 acquisition also came with a large portfolio of managed and security services, including its recently expanded Adaptive Network Security Mobility service, which is now the standard security product for the new company formed after completing its acquisition of Level 3.

“When I think of CenturyLink’s differentiator, I think about the cloud capabilities and big data capabilities as it relates to our Meraki Wi-Fi product, which gives small business customers to have the intelligence about their customers,” Irvin said. “I like the addition the assets Level 3 brings in combination with legacy CenturyLink network, but also the large full portfolio of managed services.”

CenturyLink is now building more channel and customer care capabilities around these services with its plans to open a small business center in Louisiana.

Looking forward, CenturyLink plans to enhance its managed security platforms for small businesses. In 2017, small businesses were the main victims of data security breaches.

“One of the numbers that jumped off the page for me is the number of security breaches happen in small business,” Irvin said. “Over 60% of the security breaches happened inside small businesses so that means they need help.”