& 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.
Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue London
November 10, 2017, The Westin Times Square, New York, NY
November 16, 2017, ExCel Centre, London
November 30, 2017, The Westin Times Square
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Muni Policies Stymie Edge Computing
Carol Wilson, Editor-at-large, 10/17/2017
Pai's FCC Raises Alarms at Competitive Carriers
Carol Wilson, Editor-at-large, 10/16/2017
Is US Lurching Back to Monopoly Status?
Carol Wilson, Editor-at-large, 10/16/2017
'Brutal' Automation & the Looming Workforce Cull
Iain Morris, News Editor, 10/18/2017
Worried About Bandwidth for 4K? Here Comes 8K!
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 10/17/2017
Animals with Phones
Selfie Game Strong Click Here
Latest Comment
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
The Mobile Broadband Road Ahead
By Kevin Taylor, for Huawei
All Partner Perspectives