Level 3 Communications (NYSE:LVLT, news, filings) has added two interesting contract wins this week in addition to its French initiative. This is a key summer season for Level 3, as it crosses the midpoint of its 18 month integration cycle for the Global Crossing assets. If they can get those synergies to kick in while posting accelerating organic growth into the second half, the numbers start to change dramatically in their favor.
This morning it was German-based TVRL GmbH & Co KG signing on. TVRL is the operator of the music IPTV service Putpat, which allows users to personalize their own TV program before viewing it on a mobile device, smart TV, or simply the Internet. They passed the 1 million registered user threshold back in January, and to keep up with continued growth they will be using a suite of Level 3's services: colocation, dedicated internet access, and especially content delivery and storage.
Yesterday's contract announcement was with ScaleMatrix, which offers colo, private cloud and managed services. Level 3 will be providing connectivity between two of its primary data center locations in San Diego, CA and Katy, TX. Secure, reliable connections between cloud sites are absolutely critical to the cloud revolution, with all that healthcare and financial data moving around in quantity.
The other question for Level 3 could be whether a wave of consolidation in Europe might present the company with an opportunity it can't turn down across the Atlantic. The company has been working to enter the enterprise space there, and might find an inorganic way to speed things up given the low valuations. I've always thought Colt might be the best candidate, but that would be a very large deal and something smaller and more targeted might be easier.
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