CenturyLink to Pay $25b to Acquire Level 3 Communications

Monroe, Louisiana based CenturyLink said it has made a deal to buy Level 3 Communications for about $25 billion, continuing a trend towards consolidation in the telecommunications industry. Level 3 runs one of the world’s largest Internet backbones – 23,000 miles of high-speed cables – plus sells Internet access to small and midsize business. CenturyLink is a traditional incumbent telco that is in the process of upgrading its network with G.fast and fiber broadband technologies. CenturyLink has 200,000 route miles of fiber and many large business customers.

The closest analogy of the acquisition might be the much larger Verizon’s recent acquisition of XO Communications’ 20,000 mile intercity fiber network in the US and Canada plus XO’s metro fiber networks in 40 major cities and a 13,000 mile metro network with more than 4,000 connected business buildings and 1,000 central offices The deals show the importance of fiber networks in the coming world of 5G, which will use millions of densely packed small cells to connect with homes and mobile devices.

CenturyLink and Level 3 Communications sell services such as data, voice and video transmission to large enterprises and each is competing against the much larger AT&T and Verizon. The deal makes the combined companies the second-largest communications provider to business in the States after AT&T.

CenturyLink CEO and president Glen F Post III, and soon CEO of the combined companies said, “This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses. It is this focus on providing fiber connectivity that will continue to distinguish CenturyLink from our competitors.”

The combined company will be headquartered Monroe, Louisiana where CenturyLink was founded in 1968. It plans to keep “significant presence” in the Denver area where Level 3 has its headquarters and where many Qwest employees stayed after CenturyLink acquired Qwest in 2010.  Qwest operated in 14 western states.

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