Level 3 cautiously optimistic on LatAm amid economic woes
IP communications provider Level 3 posted a 6% year-on-year increase in revenues in Latin America in 2Q15 despite economic uncertainty, the strong dollar, and a "worsening" situation in Venezuela.
Globally, the company saw a US$13mn loss in the quarter compared to a US$45mn profit in 2Q14, which included a US$163mn loss on modification of debt charges. Revenue rose marginally to US$2.06bn from US$2.03bn.
Speaking during a conference call with investors, Level 3's CFO Sunit Patel said that the company's core network services (CNS) revenue in Latin America, which represented US$146mn of the total US$186mn in the quarter had risen 5.7% year-on-year in constant currency and declined 7% on an as reported basis.
The company has projected 8.5% growth in CNS revenue in 2015, similar to 2014. Patel said that performance in the first half has been softer than was expected, but that things are expected to pick up in the second half of the year and maybe end 1% below original growth expectations.
CEO Jeff Storey said that the company sees "continued pressure" from the economic and political environment in the region.
However, "we're still growing the business and I believe we're well positioned to achieve stronger growth when the regional economic conditions improve."
Patel said that the macroenvironment in Venezuela has "continued to worsen" and that the company is monitoring the situation closely. Venezuela has an alternative exchange rate called Sicad 1, weaker than Venezuela's official rate, which Level 3 uses for most of its transactions.
The telecoms sector could be impacted by alternative exchange rates as it is highly dependent on foreign imports of handsets and network infrastructure, and the development of mobile broadband in Venezuela has suffered as telcos struggle to obtain sufficient foreign currency for their needs.
M&A AND INVESTMENT
Asked about M&A potential, Storey said that Level 3 is an "acquisitive company" referring to the recent acquisition of Black Lotus, adding "we believe in Europe and Latin America, we want to continue to grow scale."
The executive said that data centers are the fundamental element of Level 3's strategy, saying the company will continue "investing organically to drive our scale, to drive better network facilities, better network utilization. And then we will look at inorganic activities."
Storey added that Level 3 has completed its rollout of a new Ethernet platform in North America and plans to complete the rollout in EMEA by year-end and in 2016 in Latin America.
Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.
News in: ICT

TIM announces partnership with AST Space Mobile
Operator intends to carry out “direct-to-cell” tests with low orbit satellites from AST Space Mobile in Brazil.

Padtec launches DWDM solution focused on the demands of small and medium ISPs
Developed and manufactured in Brazil, the new product can be financed through credit lines offered by Padtec for providers of different sizes.
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects in: ICT
Get critical information about thousands of ICT projects in Latin America: what stages they're in, capex, related companies, contacts and more.
- Project: Broadband Installation for Integral Connectivity and Social Development of the Moquegua Region
- Current stage:
- Updated:
1 day ago
- Project: Padre Hurtado Data Storage Center
- Current stage:
- Updated:
2 weeks ago
- Project: Second Data Center in Barranquilla
- Current stage:
- Updated:
1 month ago
- Project: Microsoft Project SCL03
- Current stage:
- Updated:
1 month ago
- Project: Galapagos Submarine Cable
- Current stage:
- Updated:
1 month ago
- Project: Hortolândia Data Center Extension 6
- Current stage:
- Updated:
1 month ago
- Project: Submarine Cable Aurora
- Current stage:
- Updated:
1 month ago
- Project: Hortolândia Data Center Extension 5
- Current stage:
- Updated:
1 month ago
- Project: Cable submarino Firmina
- Current stage:
- Updated:
1 month ago
- Project: Falcon de Layer 9 Data Centers
- Current stage:
- Updated:
1 month ago
Other companies in: ICT
Get critical information about thousands of ICT companies in Latin America: their projects, contacts, shareholders, related news and more.
- Company: EBM Engenharia
- Company: Honeywell Perú, S.A.  (Honeywell Perú)
-
Honeywell Perú S.A., a local subsidiary of US-based Honeywell International Inc., started operations in the country in 1998. The firm has an office in Lima which opened in 2008 ...
- Company: Innovação Engenharia Ltda.
- Company: Altán Redes S.A.P.I. de C.V.  (Altán Redes)
-
Altán Redes, whose headquarters are located in the City of Mexico, is an international consortium created in 2016 to design, operate and maintain the Mexican telecommunication p...
- Company: Alignet S.A.C.  (Alignet)
-
Alignet is a Peruvian specialized company offering technology and security solutions for the payment industry and e-commerce sector. The company developed the EMV 3D Secure prot...
- Company: Entel PCS Telecomunicaciones S.A.  (Entel PCS)
-
Entel PCS Telecomunicaciones (Entel PCS), a subsidiary of Chilean telco Entel, provides mobile communications service throughout the country. The firm has a 38% mobile subscribe...
- Company: MVM Ingeniería de Software
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Ministerio de Comunicaciones, Infraestructura y Vivienda de la República de Guatemala  (CIV Guatemala)
-
Guatemala's communications, infrastructure and housing ministry (CIV) is a government agency responsible for the planning and development of communications networks, transportat...
- Company: Tim S.A.  (TIM Brasil)
-
TIM S.A. is a Brazilian telecommunication provider offering mobile and fixed telephony services, access to the Internet via modems, tablets, and mobile phones (3G and 4G), as we...
- Company: Cable & Wireless Panamá S.A.  (+Móvil Panamá)
-
Mobile telephony firm Cable & Wireless Panamá S.A. (+Móvil Panamá) offers fixed, mobile and broadband services in the country. The operator is also a supplier of pay-TV and ente...