Is Level 3 the Levi Strauss of the Connected World?

Written by on October 21, 2015 in BillingViews, Guest Blog with 0 Comments

Jeans. Pile of jeansWhy are the large connectivity solutions providers such as Level 3 Communications so well placed in the Connected World?

 I recently spoke at the ETIS gathering about the Business Performance Gap that is one of the great paradoxes of the Connected World. The paradox goes like this: Communications Service Providers (CSPs) may very well be investing the lion’s share of the capital to fund the foundations of this world, but do not receive a commensurate share of the value gained from it.

In fact, many CSPs I encounter still struggle to articulate exactly how they will reposition their businesses to compete against rivals – both traditional rivals and those flooding in who think they can do a better job of service provision – and squeeze more money out of the Digital World.

That said, a small group of companies has hunkered down, figured out that digital service provision – whilst sexy – is an uncertain, strange and risky business, and have decided to stick to what they know best: providing connectivity.

At Telesperience we have a name for this role within the Digital Value Matrix – we call them connectivity solution providers (or CSPs for short). Handily, the acronym hasn’t changed because these companies merely intend to evolve connectivity provision and not try and transform into something else.

They are solution providers rather than just service providers though, because they do intend to add extra value-added services – which we term network-plus services – to their core connectivity service. These network-plus services are so-called because they are closely related to connectivity and combine with it to provide a complete connectivity solution to customers. They include security, differentiated quality of service, ID management and authorisation services, amongst others.

A good example of this type of provider is Level 3 Communications – one of the stealth brands of the telecoms industry – which for many is more recognisable by the big brand customers it supports than by its own brand. Nevertheless, Level 3 has quietly been growing its business to gain scale – most recently by the acquisition of Time Warner Telecom for a cool $5.7 billion.

Level 3’s focus is simple. Its vision is to connect and secure what it calls ‘the Networked World’. As such it has a clearer focus than many of its rivals, who are still trying to figure out if their future is B2C, B2B or a combination of the two, as well as exactly what role they will play in the Digital World and how they will make money out of it.

Perhaps Level 3 have been inspired by the lesson of the California Gold Rush, which demonstrated that it was those making the shovels, picks, wheelbarrows and trousers that ended up making more than the miners.

So, as we all add ‘digital’ to our PowerPoint slides and think up exciting new things that communications service providers *could* do, perhaps we should remember that everything depends on having a reliable, high performance, secure network. Running such a business and providing the associated network-plus services might not sound as sexy as some of the positions being postulated in the Digital Value Matrix, but this role is not theoretical but a proven way to make money.

Just as miners needed tough work trousers, picks, spades and wheelbarrows, so the Digital World needs connectivity, security and a range of other key services. Which is why global connectivity solution providers such as Level 3 Communications might turn out to be the Wells Fargo or Levi Strauss of the Connected World – in the long run gaining far more value than most of the miners/enterprises they serve.

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About the Author

About the Author: Teresa Cottam is the chief strategist with industry analysts and strategy consultants Omnisperience. She is an expert in BSSOSS and a judge of customer experience for the GSMA’s Global Mobile Awards. Teresa founded the company to focus on three core issues: improving operational efficiency, increasing commercial agility and delivering a better experience to customers. Teresa’s experience of a wide range of industry verticals, as well as deep telco experience, enables her to advise on both business level and execution strategies, and produce influential analysis on key industry trends. You can follow her on Twitter @teresacottam .


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