Level 3 Communications may be an active participant in the wireless backhaul trend, providing its mix of lit and dark fiber services, but the company's main value is in connecting its facilities to buildings where its business customers reside, its CEO says.
Speaking to investors during the 44th Annual J.P. Morgan Global Technology, Media and Telecom Conference, Jeff Storey, CEO of Level 3, said that while wireless backhaul is compelling, bringing fiber to buildings offers a greater opportunity to enhance its enterprise customer revenue base.
"When it comes to cellular backhaul that's a viable business for many providers and sometimes we win and sometimes we don't," Storey said. "It depends on the nature of the buildings, the cell sites and the locations, but if I had a choice I'd rather build out to buildings."
Storey added that by bringing fiber facilities to more buildings in its footprint, Level 3 can upsell existing customers with additional services and attract others that may open new locations.
"If I have a choice, I'd prefer to build out to 10,000 buildings in a year than 10,000 cell sites because those buildings continue to create value for Level 3 and allow us to continue to expand our business with existing and new customers," Storey said. "That connectivity and capillarity of the network is extraordinarily valuable based on the number of endpoints that are out there and we're expanding our network to go to the most valuable locations."
Another question is how Level 3 is responding to the emerging dark fiber trend.
For a large content company that wants to manage its own fiber connections, dark fiber might make sense. Alternatively, a data center provider that needs to connect two disparate locations might be a better candidate for an optical wavelength service.
"There are a variety of applications that make sense for our customers and when they make sense for our customers it's viable solution for us to sell," Storey said. "If it's a large enterprise tying together two data centers in a market it makes sense or a large content company it also makes sense."
While there's been a lot of interest from wireless operators and enterprises around dark fiber, Storey said that Level 3 is focused on matching up the best service for the best application.
"We'll partner with those companies to make sure we sell products and services that make sense for our customers and Level 3, but we don't want to sell dark fiber when maybe waves are the answer, or sell waves when IP is the answer," Storey said. "We want to make sure we're matching the product we have to the customers' needs."
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