Level 3 Communications is preparing to launch a wholesale, hosted IP telephony service aimed at the enterprise market, said Kevin O'Hara, president and COO of Level 3, speaking at this week's Morgan Stanley Global Media & Communications Conference in Boston. The service would let small and medium-sized companies replace their PBXs with a hosted, IP service with a list of advanced features. The "3Tones" service will be based on technology from Level 3's acquisition of Telverse earlier this year. O'Hara said the Telverse technology lets the company "go after a very large part of the existing voice business at a 30-40% discount to the best prices out there today and still enjoy margins consistent with what Level 3 expects."
O'Hara said two of the RBOCs have agreed to resell the service. The RBOCs would provide all customer-facing operations, but the key packet telephony intelligence would be hosted by Level 3. O'Hara expects Level 3 might eventually attract 20 to 25 resale partners for the service, each of which would have a customized version. Some other highlights of his presentation:
- Softswitched services represent 48% of Level 3's communications revenue
- IP and data services represent 25% of Level 3's communications revenue
- Transport & Infrastructure services represent 27% of Level 3's communications revenue
- Level 3 continues to look for acquisition opportunities and believes that its structure makes it a "natural consolidator for the industry." The strategy is to map all of the target company's traffic to the Level 3 network and then shut down the duplicative network and fiber facilities. This was the model used with Genuity.
- the company has reduced its debt load by $3 billion from its peak
