BROOMFIELD, Colo., May 26 /PRNewswire-FirstCall/ -- Level 3 Communications, Inc. today announced enhancements to the company's capabilities to address customers in key business segments. The company is expanding its recently announced Level 3 Metro Services business unit as well as forming the Level 3 Content Services business unit.
"These changes will help us address the evolving needs of customers in these growing business segments," said Kevin O'Hara, Level 3 president and chief operating office. "Each unit will include the appropriate management, sales, marketing and technical resources necessary to deliver high quality services to meet the needs of our customers."
The Level 3 Metro Services business unit will combine Level 3's existing metro operations and those of the recently acquired Progress Telecom, with the operations of the pending acquisitions of ICG Communications Inc. and TelCove, Inc. As previously disclosed, the unit is expected to generate approximately $700-$750 million in revenue in 2007.
The Level 3 Metro Services business unit will focus on delivering a full set of services to customers who make bandwidth decisions on a local or regional basis, such as state and municipal governments, universities, enterprise customers and regional wholesale accounts that operate in certain local or regional geographies.
Company veteran Kevin Dundon will lead the Level 3 Metro Services business unit, reporting directly to O'Hara. Through integration planning and execution of recently completed and pending acquisitions, some of the senior leaders of the acquired companies will complement the leadership team to allow Level 3 to build on their knowledge and the success they have achieved in their markets.
"With our pending acquisition of TelCove and ICG, we will further increase our focus on facilities-based, high-margin metro business," said O'Hara.
Before the pending acquisitions of TelCove and ICG Communications and the recently completed acquisition of Progress Telecom, Level 3 already had extensive metro infrastructure in 36 markets, connecting to approximately 900 traffic aggregation points, and Level 3 believes that these facilities have been a source of considerable competitive advantage. The acquisition of Progress and, after close, of TelCove and ICG Communications will increase the number of traffic aggregation points to approximately 5,000 in the U.S. and approximately 5,200 globally.
The Level 3 Content Services business unit will be led by current Level 3 executive Brady Rafuse. Rafuse will continue to report directly to O'Hara.
The Level 3 Content Services business unit will target customers in the content segment who have bandwidth intensive applications, including video distribution, application hosting and gaming. Targeted customers will include search and portal companies, video sharing and social networks, sports leagues, television networks and channels, gamers and applications hosters.
Level 3's Vyvx subsidiary, which offers fiber-optic and satellite video delivery and advertising distribution, will become part of the Content Services unit.
"With more and more content being delivered over Internet Protocol (IP) technology, and with the video market growing exponentially over IP, we believe we are well positioned to help meet the growing demand for bandwidth," said O'Hara.
"The needs of the customers within this segment are evolving, potentially requiring the development of new services and technologies. Level 3 will work closely with customers within this segment to help them assess their needs and develop service offerings to address their requirements."
Both business units will be implemented immediately and will become operational over the next several months.
About Level 3 Communications
Level 3 , an international communications and information services company, operates one of the largest Internet backbones in the world. Through its customers, Level 3 is the primary provider of Internet connectivity for millions of broadband subscribers. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. These services provide building blocks that enable Level 3's customers to meet their growing demands for advanced communications solutions. The company's Web address is http://www.level3.com/.
Level 3 offers information services through its subsidiary, Software Spectrum, and fiber-optic and satellite video delivery and advertising distribution solutions through its subsidiary, Vyvx. For additional information, visit their respective Web sites at http://www.softwarespectrum.com/ and http://www.vyvx.com/.
The Level 3 logo is a registered service mark of Level 3 Communications, Inc. in the United States and/or other countries. Level 3 services are provided by a wholly owned subsidiary of Level 3 Communications, Inc.
Forward-Looking Statement
Some of the statements made by Level 3 in this press release are forward-looking in nature. Actual results may differ materially from those projected in forward-looking statements. Level 3 believes that its primary risk factors include, but are not limited to: increasing the volume of traffic on Level 3's network; developing new products and services that meet customer demands and generate acceptable margins; successfully completing commercial testing of new technology and information systems to support new products and services, including voice transmission services; stabilizing or reducing the rate of price compression on certain of our communications services; integrating strategic acquisitions; attracting and retaining qualified management and other personnel; ability to meet all of the terms and conditions of our debt obligations; overcoming Software Spectrum's reliance on financial incentives, volume discounts and marketing funds from software publishers; and reducing downward pressure of Software Spectrum's margins as a result of the use of volume licensing and maintenance agreements. Additional information concerning these and other important factors can be found within Level 3's filings with the Securities and Exchange Commission. Statements in this release should be evaluated in light of these important factors.
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