LEVEL 3 LAUNCHES FIRST LONG DISTANCE IP VOICE SERVICE WITH QUALITY AND CLARITY OF TRADITIONAL PHONE SERVICE
(3)Voice Service Combines Traditional Voice Quality with Cost Benefits of Internet Technology
BROOMFIELD, COLORADO, December 13, 1999 – Level 3 Communications, Inc. (Nasdaq: LVLT) today announced commercial availability of its (3)VoiceSM service. (3)Voice is an enhanced service delivered over Level 3's end-to-end Internet Protocol (IP) network that offers customers voice quality indistinguishable from traditional telephone networks, but with the efficiencies and inherent cost advantages of IP. (3)Voice requires no change in how end-users dial or in the equipment that they use. The service will initially be offered on a wholesale basis to resellers, other carriers, enhanced service providers, fax service providers, wireless service providers and competitive local exchange carriers. The initial rollout will be in major markets across the U.S., and the company plans to continue to expand to additional markets over the next year.
"We believe the launch of our (3)Voice service is a threshold event not only for Level 3, but for the communications industry as well," said Kevin O'Hara, executive vice president and chief operating officer of
Level 3. "(3)Voice is the world's first IP voice service to offer the quality and simplicity of everyday phone service - no extra numbers to dial - no new equipment - and no sacrifice in sound quality." "To ensure quality, our engineers will continuously monitor a range of metrics such as low latency, jitter and packet loss - and if the quality should ever temporarily drop below the quality of the traditional phone network, we would move our customers' traffic onto the traditional phone network. All carriers in the industry have such overflow contracts in place to enable them to move traffic back and forth as needed," said O'Hara.
One of the initial customers signing a contract for (3)Voice is Network Enhanced Technologies, Inc. (NET), an international telecommunications service provider based in Los Angeles. "IP communications technology clearly is the wave of the future," said Frank Tizabi, chairman of Network Enhanced Technologies. "Level 3's rapidly expanding private IP network and Softswitch-based infrastructure will enable us to provide reliable, high-quality voice transmission at more competitive long-distance rates. Equally important to NET, we expect over time to realize the increasingly significant cost benefits that IP is anticipated to bring."
Commenting on the continuing cost benefits of the new service, Level 3's Chief Technology Officer Jack Waters said, "We run our voice services on general purpose computing platforms, so our cost of providing services is expected to follow a Silicon Economics curve. Doubling performance per dollar every 20 months is a new phenomenon in voice services and creates the kind of cost reductions that, thanks to Silicon Economics, have been seen in the computing industry for years."
(3)Voice - The Supporting Technology Level 3's Softswitch-based network architecture currently processes over a billion minutes of Internet connections per month - for Level 3's Managed Modem service. (3)Voice service will be carried over the same Softswitch technology to provide enhanced quality and efficiency, thereby reducing the cost of carrying voice telephone calls.
"Ever since we announced the start of our network construction in the summer of 1998 we have been moving toward making this service available," said O'Hara. "This new voice service will use the same proven Softswitch technology over which we have already been carrying millions of dialup Internet connections every day for our Managed Modem customers." Softswitches are technically advanced software control systems, which Level 3 uses to provide customers with services that combine the innovation and rapidly improving price performance of Internet Protocol based networks with the reliability and ubiquity of traditional telephone networks.
(3)Voice - The High Quality Service Level 3 transports voice calls across its U.S. long distance IP network and then connects these calls to local phone companies that use traditional protocols to complete the call in a given city. This long distance transport is done without traditional circuit switches over the Level 3 Network, using
Level 3's Softswitch-based infrastructure to seamlessly integrate today's telephone networks with Level 3's enhanced infrastructure. As a result of the Softswitch platform and the privately managed IP network, the quality and user behavior is indistinguishable from traditional phone service.
(3)Voice - The Enabler Strategy Level 3 is focused on providing superior, low cost 'enabling' services to wholesale customers who, in turn, have expertise in offering value added services to end users. The company's (3)Voice service initially targets the approximately $16 billion U.S. wholesale telecommunications market (Source: International Data Corporation, 1998). Other telecommunications carriers and enhanced providers, which are continuously seeking a more efficient and economical way to transport and terminate traffic anywhere in the world, will now be able to transition from traditional telephone network infrastructures to Level 3's newer, more cost efficient network optimized for Internet technology. Over the course of the next year, (3)Voice's enhanced capabilities will be extended to include expanded billing and routing capabilities and native IP interfaces to support additional carrier, Internet service provider (ISP), and application service provider (ASP) requirements.
"We believe this robust and commercially available IP service will spur a wave of innovation in IP-based voice services and enhancements that will bring new benefits for our customers," said Ike Elliott, vice president of Softswitch Services for Level 3. "With our open (3)Voice architecture in place, we anticipate new product developments from many companies, including Internet companies. We believe the potential exists for this new development to rival the growth in the World Wide Web."
(3)Voice service will initially be available in the following 10 markets: New York; Los Angeles; Chicago; Washington, DC; San Francisco; Denver; Dallas; Detroit; Seattle; and Tampa – and is expected to expand to 25 cities by the end of the first quarter of 2000. The inherent benefits and efficiencies of Level 3's Softswitch IP infrastructure will allow Level 3 to offer some of the most attractive pricing available – generally below the lowest current competitive wholesale pricing in the initial markets. Pricing will vary based on the call termination destination and on volume and term discounts. Over time, the cost of this IP service will continue to drop, driven by the continuing price performance improvement seen in other high tech silicon-industries like computing.
For more information on the (3)Voice service, visit the Level 3 Web site at www.Level3.com.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. 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 press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
