BROOMFIELD, Colo., May 26, 2006 — Level 3 Communications, Inc. (Nasdaq: LVLT) 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 officer. “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 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.
