Level 3 takes MEF top honors for Latin American Ethernet services

Level 3 Communications (NYSE: LVLT) on Wednesday received the "Best Carrier Ethernet Business Application Award – Caribbean and Latin America" from the Metro Ethernet Forum (MEF).

MEF said in a release announcing the award that it names service providers that offer "the most unique and innovative business Ethernet services to the enterprise segment."

Joined by one of its unnamed large banking and financial services customers, Level 3 presented the MEF with the business Ethernet solution to support that customer's connectivity throughout Brazil.

This award comes at a time when Level 3 continues to establish itself in Latin America, a market it increased its presence in when it purchased Global Crossing in 2011.  

In Q3 2012, Level 3 reported that its Latin America revenues rose 5 percent to $177 million, up from $169 million in Q2 2012.

From a broader trend perspective, the Latin American Ethernet and data services market segment has grown increasingly competitive. What has driven this competition is the fact that more multinational large businesses are locating satellite offices in the region.

The MNC drive is creating Ethernet service opportunities not only for resident Latin America-based providers like Telefonica and America Movil, but also for BT Americas (NYSE: BT), NTT (NYSE: NTT) and Orange Business services. Existing MNC customers who want to locate offices that work with these providers in the region and want the BT and Orange Business Services, in particular, have been very aggressive in building out their Ethernet and service providers in Latin America.

In 2011, BT increased the amount of MPLS points of presence it had in the region by about 20 percent and launched Ethernet services in 21 new cities. All of these efforts will be complemented by its satellite service capabilities, which serve about 37,000 sites today. These efforts have helped the company win major service contracts with ECT - Empresa Brasileira de Correios e Telégrafos (the state-owned Brazilian Post Office and Telegraph Company) and Caixa Economica Federal, for example.

Likewise, in October 2011 Orange Business Services expanded its service and network capacity in five key cities in Brazil and Chile, followed by Argentina, Peru and Panama. By making those network upgrades, Orange will extend its suite of services, including MPLS (i.e., IP VPN and Business VPN), International Ethernet Link and its emerging Telepresence videoconferencing service.

Competition in the Latin American Ethernet market, which is still relatively nascent, should help drive down prices of services such as VPLS and other data services. According to a recent TeleGeography report issued last November, the median price for a FastE connection in Brazil's capital was $10,973 in H2 2012, which is twice what a business customer would pay in New York or Los Angeles, two markets where there are multiple service provider options.

Level 3, which has been providing services in Latin America for almost 10 years, can cite the award and its large banking customer as proof that it is becoming a serious player in the Latin American Ethernet market that can take on other providers making inroads into the region.

For more:
- see the release

Industry Voices: The MEF Carrier Ethernet certified professional program

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