& cplSiteName &

Level 3 Revs Its Enterprise Engine

Dan O'Shea
4/30/2014
50%
50%

Earlier this month, Jeff Storey completed his first year as president and CEO of Level 3 Communications, but the real story may be how much he has remade the company into an enterprise market mover and shaker during that stretch.

The carrier more often identified with the wholesale market is finding much more of its success in the enterprise sector these days. Level 3 Communications Inc. (NYSE: LVLT) proved that again today, reporting first quarter 2014 earnings highlighted by an 11% increase year-over-year in enterprise revenue. Enterprise revenue now represents 66% of Level 3's overall Core Network Services revenue, compared to just 34% coming from the wholesale market.

"Enterprise continues to be the growth engine for the company," Storey said on the quarterly earnings call this morning. Meanwhile, competition and other factors in the wholesale sector left Level 3's wholesale revenue for the quarter down about 1.4% year-over-year. In dollars, enterprise revenue for the quarter was about $962 million, and wholesale at $495 million.

Storey cited several major moves the company made in recent months as critical to its enterprise success, including its recently announced deal with Digital Realty to offer enterprise customers direct connections to Amazon and Microsoft cloud services. (See Level 3 Cloud Connects Digital Realty.)

During the call, Storey also reiterated earlier statements he has made suggesting that Level 3 is in no hurry to take on another acquisition binge of the kind that merely defined the company for its first 15 years in existence. "We're certainly focused on organic growth, and there are many ways to continue doing that through deeper penetration of our existing market," he said, though he added that Level 3 would continue to evaluate "inorganic" growth opportunities, such as acquisitions, as they present themselves.

Storey took charge at Level 3 in April 2013, only the second CEO in the company's history after CEO and co-founder James Crowe stepped down a month earlier. (See Level 3 Names New CEO.)

— Dan O'Shea, Managing Editor, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DOShea
50%
50%
DOShea,
User Rank: Blogger
4/30/2014 | 9:27:02 PM
Re: The stock story
That's a good question. L3 sees it as easy pickings right now with a lot of enterprises ready for upgrades, and I don't think it has experienced the longer-term support costs with many of its accounts. Jeff Storey also has been making the point for a couple quarters now that L3 is trying hard to improve the operational and management aspects of its services. But, this is a point worth exploring with L3 - thanks.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
4/30/2014 | 3:37:01 PM
Re: The stock story
Dan, do you think the move towards more enterprise revenue will eventually impact earnings, given the greater support needs?

They might be targeting a specific type of enterprise customer--either by size, region, or even product type--that fits a lower cost of support model.
DOShea
50%
50%
DOShea,
User Rank: Blogger
4/30/2014 | 3:24:11 PM
The stock story
Level 3's stock price has responded well to its quarterly earnings. LVLT was up more than 15% last hour to about $42.70.
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
The Real-World View of Service Provider Innovation
Executives from Deutsch Telekom, Facebook, AT&T, Vodafone, and Masergy share insights from their company’s major transformation efforts and updates on key issues including open source, managed cloud connections and 5G.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (0) comments


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
Google Doubles Down on Machine Learning, AI
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/19/2016
Eurobites: Be More European, EU Tells Streaming Services
Paul Rainford, Assistant Editor, Europe, 5/20/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.