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Carol Wilson
Carol Wilson
10/31/2016 | 12:24:31 PM
It's all about growing the business business
So Glenn Post said on the investor call that CenturyLink isn't considering a spinoff of its consumer business, but virtually the entire call was devoted to how the combined company can serve enterprises, particularly multi-national businesses, better and take advantage of scale and scope of the combined company. 

This seems very much a combination of the Level 3 network and the CenturyLink managed services capabilities. Jeff Storey talked about the importance of getting more services on-net, to be able to control the customer experience and also reduce the costs by not having to lease as many servcies. 
Ray@LR
[email protected]
10/31/2016 | 12:49:28 PM
Re: It's all about growing the business business
This is a solid long-term view, I think, and puts CenturyLink in a greater position of strength than if another company (for example, a Webscale giant or overseas Tier 1) acquired Level 3.

The view needs to be long-term, with the ability to support the video, cloud and Industrial IoT needs of businesses. Level 3's assets put CenturyLink in a much better position to play a role in that future, in my view. 
KBode
KBode
10/31/2016 | 1:08:46 PM
Re: It's all about growing the business business
I'm curious how that shakes out as well. They've been seeing some notable losses from frustrated DSL customers that are fleeing to faster cable speeds because CenturyLink is still offering them speeds from 2002. And upgrades remain spotty, at best.

It remains curious that these companies (AT&T included) can't afford upgrading their last mile residential networks, but have endless resources for these mammoth mergers. At some point that has to create problems, doesn't it? Or do they just spin those businesses off to someone that cares?
James_B_Crawshaw
James_B_Crawshaw
10/31/2016 | 2:44:44 PM
Re: It's all about growing the business business
Only 40% of the consideration for LVLT is cash (50% for TWX). Companies can borrow the cash for the remainder on the basis that they are buying a cash generative asset that can service the debt. 

I don't think any vendor would accept shares to provide broadband infrastructure. You can raise debt to fund specific (large) capex projects but CTL's broadband infrastructure upgrades are part of the run-of-the-mill capex that needs to be financed by the operating cash flows of the business. 
Carol Wilson
Carol Wilson
10/31/2016 | 3:05:11 PM
Re: It's all about growing the business business
CenturyLink does seem to be a tale of two companies. As Karl notes, their DSL services are getting hammered, but my guess is, those customers are folks in less-populated states that are more expensive to serve and CenturyLink may be happen to let cable do it. 

By contrast, they are willing to spend big bucks to get a global network, and to transform their existing operations at a rapid pace as well. 
danielcawrey
danielcawrey
10/31/2016 | 7:03:24 PM
Re: It's all about growing the business business
If DSL is in decline, and by all indications it is, it's time for companies like CenturyLink to move towards total enterprise services. This is the impetus for the company to buy a premier provider like Level 3. 
mendyk
mendyk
11/1/2016 | 10:19:04 AM
Re: It's all about growing the business business
Agree, but as long as the backwater residential services are making a profit, there's no reason to jettison them right away.
KBode
KBode
11/1/2016 | 1:16:20 PM
Re: It's all about growing the business business
Seems like a real problem if DSL providers retreat and cable broadband becomes a monopoly...even if wireless develops enough to become a fixed-line alternative (thanks to usage caps). Things could get a bit ugly for consumers in that scenario. 
jbtombes
jbtombes
11/2/2016 | 12:02:01 PM
Re: It's all about growing the business business
CTL was already heavily weighted toward business revenues, a 64% of total. Compare that to T (17%) VZ and CHTR (13% each), as noted in the Q3 earnings deck. This merger pushes the ratio up to 76%, as Mari notes. If the resi broadband story is a sad one, is that because DSL (or VSDL2 or whatever) can't compete with DOCSIS on price/features?
KBode
KBode
11/2/2016 | 1:23:29 PM
Re: It's all about growing the business business
It can, and there's variants like G.Fast, investors just don't want them spending money on uniform deployment, so you get a lot of pockets where the broadband options consist of 100 Mbps cable bundled with TV, or 6 Mbps DSL. I really think we're looking at a massive cable broadband monopoly for years to come in a huge number of markets. That's not a problem for these companies, but it's sure as hell not going to be great for consumers.


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