Level 3 Communications (NYSE:LVLT, news, filings) announced fiber and equipment upgrades today along the Texas-Mexico border, specifically in McAllen and Laredo. This initiative will bring both additional capacity and a wider range of services to the region, and will allow Level 3 to better target cross-border traffic of all kinds. Level 3's footprint in southern Texas is not part of its original build. It comes from the WilTel and Broadwing footprints, but I have never known if the facilities were part of the original build of either of those two operators or if the fiber came as part of a capacity swap from someone else. Perhaps a reader knows?
It seems like many carriers right now are putting substantial effort into the Latin American markets. In addition to Telefonica's huge presence, Global Crossing's intent has been quite clear since the Impsat acquisition, NTT has been talking up its assets in the region, and now Level 3 is spending cash on it at a time when the company otherwise has a vice-grip on its capex. Well, huge traffic growth will bring that sort of attention I supposed.
One neat idea out there right now for an enterprising carrier is the recent announcement of a dark fiber auction by the Mexican utility CFE. If such a deal really happens, real competition might finally appear in the Mexican bandwidth market. It would be interesting to see that fiber lit and added to the backbone of a Level 3 or Global Crossing, but it would require long term capital expenditures at a difficult time. Telefonica is probably the most likely to try it.
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