Level 3 Communications may have not have aggressively chased the fiber to the tower (FTTT) opportunity, but the service provider foresees the upcoming 5G wireless network build being a potentially good fit for its fiber network.
Although wireless operators and standards bodies are still working on the 5G construction, network implementation will require higher speed Ethernet and even dark fiber solutions.
Sunit Patel, CFO of Level 3 told investors during the Bank of America - Merrill Lynch 2016 Media, Communications & Entertainment Conference that its fiber network, which covers many densely populated urban areas, would be well-suited to facilitate 5G architecture.
“5G is a recent and fast evolving opportunity,” Patel said. “Typically, the need is for where you highly have urban populations so the cells are smaller to keep up with the demand and it’s an opportunity for us.”
Patel said that since wireless operators are just putting together their 5G plans it is too early to tell how big the fiber sales funnel will be yet, but it is better than FTTT.
“At this stage, wireless operators are only working on their plans, but unlike the fiber to the tower, this opportunity would make more sense with where our network is,” Patel said. “If you look at our network map, it is going through highly urban areas with high population densities and with 5G there’s a possibility to tie the seamless movement from Wi-Fi cloud demand to get back to a wired connection.”
As it prepares to meet potential dark and lit fiber demands from 5G, Level 3 continues to expand the reach of its fiber network in North America. This fiber network expansion would place the service provider’s network in direct contact with buildings and utility poles where wireless operators would house their 5G gear.
This includes extending buildings into more buildings in its footprint to satisfy more business customers while reducing costs it pays to third party providers for last mile network access.
“We are looking to build more and more fiber in the metro every year, connecting a higher number of buildings every year than we have historically in every region,” Patel said. “In North America a lot of that build is supported by costs savings by pushing off-net circuits to our network and saving money and you’ll continue to see us allocate more capital over time towards metro fiber builds.”
Fiber and IP-based services continue to be hot sellers for Level 3, a trend that was evident in its second quarter core network services (CNS) results.
Within the core CNS segment, IP & Data and Transport & Fiber were the dominant units, generating $915 million and $575 million in revenues, respectively. These segments now make up 47 and 30 percent of Level 3's CNS revenue mix.
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