Followup to A Question for Level 3

July 16th, 2008 by · Leave a Comment

I have a few details and clarifications for my question to Level 3 which came up in private communications.  First, many thanks to all who commented publicly or privately, you have been very helpful.

My numbers of $35K in Q1/08 and $31K Q2/08 were simply the ratio of the Business Markets group quarterly revenue by the approximate on-net building count – both provided in various public documents and filings.  Obviously these was quarterly numbers, the monthly numbers would be more like $11.6K and $10.3K and all of these are only approximations due to the fact that the lit building count is given rounded to the nearest hundred or so.  I would greatly appreciate better metrics from the company that would help understand the Business Markets group better.

Here is more on my rationale for the question and a framework on which I would view an answer.  There seem to be two main reasons to bring buildings on-net:  increasing revenue for new customers, and decreasing costs for existing customers.  Either can justify the expense and would satisfy my curiosity, but it needs to show up in the numbers – revenues must go up or network expense must go down (or both).  Unless of course gains are offset by some other unknown factor – which I would also want to know about.  And obviously there may be delays between the investment and the visible effect in revenues etc – again something I’d want to hear more about.

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