Level 3 Communications (NYSE:LVLT, news, filings) announced today that they have signed a multi-service agreement with GlobeNet aimed at improved service capabilities to and from the rapidly growing South American marketplace. GlobeNet is a division of Oi, formerly known as Brasil Telecom, and operates undersea cables connecting New York and Miami to Venezuela and, you guessed it, Brazil. Under this mutual arrangement, both carriers will be able to offer bundled high speed IP services and subsea transport to their customers.
The partnership allows Level 3 deeper access into the Brazilian marketplace. That's something it might have gotten if there were a deal with rival glbc in the works. This agreement would tend to reduce the likelihood of such an event, so if the two were talking as some rumors had it then perhaps this is a sign that those negotiations broke down.
GlobeNet of course gets better access to North America and Europe, allowing it to better serve its international clients and, yes, to better compete with other international telecoms with substantial business in Brazil such as Telefonica and, yes, Global Crossing.
Actually, the GlobeNet assets would look pretty good merged with the Level 3 assets someday, but I doubt anything will come of that in the near future.
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