Level 3 Communications has acquired substantially all of 360networks' nationwide long-haul transport business and as a result 360networks will cease making monthly payments to Level 3 for operations and maintenance services for its dark fiber.
The deal makes Level 3 the primary provider of North American optical wavelength services to T-Systems North America. 360networks previously served as T-Systems' broadband transport vendor in the U.S., using lit fiber that it had acquired from Dynegy Inc. in 2002. Dynegy had initially purchased that fiber from Level 3 under a 20-year IRU in October 2000. Through the agreements announced today, that fiber agreement has been terminated.
"360networks informed us that they were seeking to phase out their nationwide long-haul network services business in the U.S.," said Sunit Patel, Level 3's chief financial officer. "As such, they no longer had a compelling reason to maintain their dark fiber agreement with Level 3. We believe this negotiated agreement with 360networks, through which Level 3 acquires the business and becomes a key network services vendor to T-Systems, is in the mutual best interest of all parties."http://www.level3.com/http://www.360.net
- In March 2004, T-Systems announced a strategic partnership with Level 3 Communications that enables it to provide its MPLS-based service portfolio to customers across the entire Level 3 fiber-optic network, which spans approximately 19,000 miles in North America and includes Points of Presence in 68 U.S. markets.
- In November 2004, 360networks completed the sale of its Canadian assets, primarily Group Telecom, to Bell Canada for US$215 million in cash. Bell Canada also purchased selected northern US interconnection assets and related liabilities. 360networks will use the cash proceeds to retire all of its debt, including the debt from its 2002 restructuring, and for working capital purposes. AT the time, 360networks said it would focus on its US operations, which include a low-cost, long-haul network footprint with strategic metro access and a regional Western regional network with unique reach into rural markets. Group Telecom will now operate as a division of Bell Canada.
