If all the world were like Brazil, Level 3 Communications (NYSE:LVLT, news, filings) would not be unhappy. The South American region as a whole has been hopping, and they’ve been able to generate the solid growth they’re looking for a path to elsewhere. This week they’ve picked up two Brazilian contracts already, one for hosting local content delivery and one for cloud-based IT services.
For hosting and content delivery, they’re now supporting Riot Games and its free online multiplayer game League of Legends and the 32M active players it supports worldwide. Until now players in the region were connected via a server in Miami, and gamers hate latency. According to Monday’s announcement, Level 3 is providing colo and connectivity to power a node in their Sao Paolo facility, which will make everything run that much faster.
And on the cloud front, they’re now providing IT services to e-Xyon. e-Xyon offers legal management services to law firms and corporations via the cloud, and is taking advantage of Level 3’s various IaaS services in Sao Paolo to power things. Seems like we ought to start seeing deals like this one in the northern hemisphere more often in the future.
Folks ask me regularly if Level 3 is finally ready to turn the corner on total revenue growth, and thus start fulfilling a few of those long deferred dreams involving incremental EBITDA margins – which by definition only help when revenue has appreciable increments to generate new EBITDA from. They ought to be there already, and the fact that they’re not has a lot to do with why Crowe isn’t anymore either. Whether Storey can reproduce their Latin American success in the US or Europe is still anybody’s guess IMHO.
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