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Ethernet services

Can Level 3 Execute the Perfect Merger?

On the surface, the Level 3 Communications acquisition of tw telecom seems an ideal marriage of a company with fat fiber optic pipes and global reach and one with strong metro network connections and a solid reputation in the enterprise segment.

Factor in Level 3 Communications Inc. (NYSE: LVLT)'s connections to data centers and tw telecom inc. (Nasdaq: TWTC)'s dynamic bandwidth capacity services and it just keeps getting better. In a market where size and scale counts, this merger seems to have it all.

All of those complementary capabilities and synergies mean nothing, however, unless the new Level 3 can execute on the strategy of integrating the networks, trimming any overlapping facilities for maximum efficiency and retaining the best set of products going forward. And that challenge has landed right in the lap of Level 3 CTO Jack Waters. (See Level 3 CTO Jack Waters: Network Integration Guru.)

Assuming this deal is approved -- and there doesn't seem to be any chorus of voices in opposition -- its success depends on how that execution provides the sales force with a definable product advantage over the large incumbents against whom Level 3 competes, as well as giving the field office and technical support folks the tools they need to deliver quality service.


Ethernet services continue to evolve, and you can track that evolution in our Ethernet/IP news and analysis section, where we look at carrier and vendor strategies.


One thing that tw telecom developed in recent years was a reputation for excellent service and for close ties to its customers. The dynamic bandwidth control product the company has been rolling out over the last couple of years was an example of its response to customer demand.

For me, one early indication of whether Level 3 is moving in the right direction on this particular merger will be if the dynamic bandwidth control and accompanying customer portal become standard issue for Level 3's services. That's not something that can happen overnight -- it involves back-office integration that Waters admits is the hardest part of any merger. But making that a priority should be one of the first post-merger statements.

In a recent conversation with Light Reading, Waters played his cards close, not tipping his hand on what services will emerge, given that the merger has not yet gone through. Find the report from our chat here in our Prime Reading section and rest assured that once the merger does go through, we'll be watching.

— Carol Wilson, Editor-at-Large, Light Reading

mhhf1ve 8/6/2014 | 6:14:03 PM
Re: It will be interesting to see what advantages Level 3 can give tw... It wonder if Google Fiber people are considering expanding their network in ways other than building their own... I think Google has bought dark fiber in the past. I wonder if the search giant would ever want to buy up some already lit fiber.
cnwedit 8/6/2014 | 5:47:31 PM
Re: It will be interesting to see what advantages Level 3 can give tw... Yeah,I don't see that happening but way to connect the dots on the news!

 
mhhf1ve 8/6/2014 | 5:35:13 PM
Re: It will be interesting to see what advantages Level 3 can give tw... Not that Level3 would... but it would be kinda crazy if it (or some other backbone provider) acquired Windstream's new REIT entity for the copper and fiber (and not so much for the debt).
cnwedit 8/6/2014 | 4:16:48 PM
Re: It will be interesting to see what advantages Level 3 can give tw... I think it's risky to ever say Level 3 is done with CLEC acquisitions but I think after this one they will take some time off from expanding their service provider footprint and, if they acquire things, are more likely to acquire targeted, more strategic properties. 

I actually think businesses are willing to look beyond the big incumbents, the question will be whether the combined L3-twt can bring scale to the quality of service twt was providing on its own.
mhhf1ve 8/6/2014 | 4:02:51 PM
It will be interesting to see what advantages Level 3 can give tw... Level 3 brings a bit more scale to twtelecom.. but in wooing business customers, will that scale be enough to impress businesses who are looking at huge incumbent service providers?

Is Level 3 done with its CLEC acquisitions?
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