CenturyLink’s $34 billion acquisition of Level 3 will not only result in an extensive fiber foothold, but it will also lead to a more extensive software-defined wide area network (SD-WAN) play that should appeal to enterprise customers.
Speaking at a Wells Fargo Securities Technology, Media & Telecom investor conference Thursday, Level 3 CFO Sunit Patel said that the company views the SD-WAN market as very strong, particularly for large enterprises that are looking for more complex connectivity than just straight high-speed broadband. “The benefit for us is that you can configure service on the fly with customers,” Patel said. “It’s all software driven so the provisioning cycle is short and customers can do some of it themselves.”
Patel said that SD-WAN drives a lot of productivity improvements within the company. “SD-WAN technology we view as a plus-plus for customers and for us internally.”
Meanwhile, CenturyLink has been offering a fully managed SD-WAN service to enterprise customers since June. The company is using SD-WAN technology from Versa Networks.
Tapping the Enterprise Market
A big factor in CenturyLink’s $34 billion proposed acquisition of Level 3 is to get a better foothold in the enterprise market. During the Wells Fargo investor meeting, Stewart Ewing, CenturyLink’s CFO, said that the combined company will have fiber connections to 75,000 buildings allowing it it to offer expanded services.
Ewing also estimates that the majority of the company’s revenue will come from the enterprise market in the future with just 25 percent of revenue coming from consumers. “We will be second to AT&T in terms of revenue from the enterprise,” he said. “We will be the only focused provider on the enterprise.”
Interestingly, CenturyLink said initially that it expected the deal to close by year-end 2017 but Ewing said today that he believes they may be able to close by September 30, 2017 or even earlier. He is confident that despite likely changes in the leadership at the FCC and other government agencies that the deal will not face any hurdles in getting approvals.