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CenturyLink-Level 3 Merger to Bring More Business Customers On Net

By Edward Gately
January 06, 2017 - News
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**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in September-October 2016.**

CenturyLink’s acquisition of Level 3 Communications, anticipated to close on Sept. 30, will allow the combined company to save money and provide better service by bringing more business customers onto its own network.

During a joint session at this week’s Citi 2017 Internet, Media & Telecommunications Conference, Stewart Ewing, CenturyLink’s CFO, and Jeff Storey, Level 3’s CEO, gave an update on the integration process and talked about how the combined company will be able to provide business customers with an improved service experience.

The merger will create the second-largest domestic communications provider serving global enterprise customers. The transaction increases CenturyLink’s network by 200,000 route miles of fiber, which includes 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents.

Accounting for those served by both companies, CenturyLink’s on-net buildings are expected to increase by nearly 75 percent to about 75,000, including 10,000 buildings in EMEA and Latin America.

“If you look at the combination and the company we’re building, combining the Level 3 network with the CenturyLink network, combining all of our efforts around SDN and NFV to better enhance the way that we provide services to customers, to put more on net through some of the synergy captures, to make our networks more efficient and operate more effectively, those are opportunities that are out there," Storey said.

About 40 percent of the expected operating expense savings will be on the network side, Ewing said.

“And quite a bit of that is getting off of third-party networks and bringing the customers on our network so ... you can provide a much better customer experience," he said. “Basically it costs us less because the network is there and it’s ours, and it takes revenue away from a competitor."

When the combined company has more customers on net, “we serve them better, we can grow with them better (and) we can meet their needs more effectively," Storey said.

“So there are a lot of capital expenditures that both companies do stand-alone that we’ll be able to combine together as a combined company and get better efficiency out of those capital expenditures to drive growth across both enterprise and consumers," he said.

CenturyLink’s investments in Ethernet and advanced data services will help Level 3 customers and combine well with the Level 3 network to “bring that whole array of products and services to those customers," Storey said.

“And I think that the products and services that Level 3 has where they’re ahead of us, on business VoIP for instance, and on network security … I think those are products that we can take and offer to our customers and enhance the customer experience," Ewing said. “Everyone is concerned about security these days and these guys have a very good security product that we think we can integrate into the products that we’ll (sell) as a combined company going forward."

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