Level 3 Tanks on Grim Outlook
While the operator cut losses and increased sequential revenues in the fourth quarter (see Level 3 Cuts Q4 Losses), it warned that a decline in revenues from its managed modem business in 2004 would cut annual revenues by up to $150 million. An expected reduction in dialup capacity sales to AOL would account for the majority of this.
The carrier also noted that it would be unlikely to notice any significant impact from new services until late in 2004.
Level 3 recorded fourth quarter revenues of $988 million and a net loss of $121 million, compared with $874 million in revenues and a net loss of $247 million in the previous quarter. For 2003, revenues were $4.03 billion, compared with $3.11 billion in 2002, while net loss was $711 million, compared with $858 million.
Bizarrely, $80 million of the year's sales came from a coal mining business, but that's another sector on the decline, as 2002's revenues from the raw energy unit were $114 million.
The carrier has launched a number of new services in past months (see Level 3 Launches Field Support Service , Level 3 Offers Toll Free VOIP, Level 3 Expands VOIP Service, and Level 3 Offers Private Line Service) as it seeks to transform its business. This year, the company will launch wholesale residential VOIP during the first half to make better use of its proprietary softswitch platform that, according to Level 3, can reach 93 percent of the U.S. population. It also plans to provide IP VPNs with QOS capabilities on a wholesale basis.
— Ray Le Maistre, International Editor, Boardwatch