Progress Telecom a Done Deal for Level3

March 20th, 2006

‘’’’several KEY customers”’’========can you say ATT buying BellSouth and “”WIRELESS===CINGULAR’’???????????

Level 3 Completes Progress Acquisition
Monday March 20, 8:45 am ET
Level 3 Pays Total Consideration of 19,695,793 Shares of Level 3 Common Stock and $68.5 Million in Cash

BROOMFIELD, Colo., March 20 /PRNewswire-FirstCall/ — Level 3 Communications, Inc. (Nasdaq: LVLT – News) today announced that it has completed its acquisition of all of the membership interests of Progress Telecom, LLC, a regional wholesale network services company based in St. Petersburg, Florida. Progress Telecom, LLC was jointly owned by Progress Energy, Inc. (NYSE: PGN – News) and Odyssey Telecorp, Inc.

Pursuant to the purchase agreement signed on January 25, 2006, Level 3 paid total consideration of 19,695,793 unregistered shares of Level 3 Common Stock and $68.5 million in cash. The purchase price remains subject to adjustment for the working capital balance assumed by Level 3 as of the closing date.

“We are pleased to have completed this transaction, which expands Level 3’s footprint in the southeastern region of the United States, where we have seen strong demand for our services,” said Kevin O’Hara, president and chief operating officer of Level 3. “Progress Telecom’s reputation for operational excellence is consistent with the focus and reputation of Level 3. Because we will be able to offer a broader set of services in more markets, we believe that the completion of this transaction will enable us to expand our relationships with certain large, key customers, particularly certain wireless and international customers.”

Progress Telecom’s network spans 9,000 miles, includes 29 metro networks and connects to international cable landings in South Florida and 31 mobile switching centers in the southeast. Progress Telecom serves approximately 200 customers with a significant concentration of international and wireless carrier customers.

“We are looking forward to working together as part of the Level 3 team,” said Ronald J. Mudry, president and chief executive officer of Progress Telecom. “We believe our customers will benefit greatly from expanded access to Level 3’s international network and its broad suite of transport, IP and VoIP service offerings.”

“We believe there are a number of significant benefits to this transaction, including lower access costs in the region and unique cross selling opportunities that arise from the companies’ similar service offerings and customer bases, and complementary infrastructure,” said O’Hara. “In addition, while we expect to retain a significant local presence in the region, we believe we will be able to realize cost savings by integrating certain operational and corporate activities. We expect to begin most network related integration efforts, once we have realized additional scale and efficiency through the integration of WilTel, which we acquired in late 2005.”

Qwest Major News Monday at GlobalComm

my guess is that QWEST is going to partner with SPRINT/NEXTEL for the 3G wireless and all the Cellular network…………..funniest thing is that Sprint is OUTSOURCING all data/voip calls to Level3……….so, QWEST will now be riding Level3 for every cell phone call or every data 3G wireless. Sprint is already riding Level3 for most Cellular Access and all VOIP calls………….

But another crucial tie-up got less attention: that Sprint is using Level 3 to connect the VoIP service to the PSTN. That’s particularly important because calls traveling over an IP network to or from any given local market have to go through a VoIP gateway to connect with phones on the public network there.

Insisting on using only its own gear means a service provider can roll out service only as fast as it can install gateways in or near target markets. Level 3, by contrast, had a nationwide infrastructure in place, and was also able to provide other crucial capabilities such as E911, local number portability, and the provisioning of new phone numbers in most markets. In all, says Whitaker, “[Level 3’s] broad service footprint is a key differentiator for Sprint IP Voice Connect.”

The two-pronged outsourcing strategy meant Sprint could from the start offer the new service in 251 metropolitan areas in 47 states. “I think it’s brilliant,” says Brian Washburn, senior analyst at Current Analysis. “It makes them magically a nationwide player.”

Perhaps more important, it let them go nationwide more cheaply than the competition. Most other Tier 1 carriers entering the enterprise VoIP market ended up building the necessary infrastructure themselves, Washburn says. And while Sprint could have gone the same route, Washburn says, “I think they looked at it and said, ‘Why reinvent the wheel?’”


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Level3 Enterprise Business on the VERGE of Exploding

hoping they mean this in a POSITIVE WAY GGGGGGGGGskibare

CHICAGO — NXTcomm — Level 3 Communications Inc. (Nasdaq: LVLT – message board) said today it has completed its Internet2 network services backbone, capable of 100-Gbit/s speeds. (See Level 3 Completes Network.) With this announcement, and plans to further expand its metro fiber network, Level 3 says its enterprise business is on the verge of exploding.

Level 3 Communications had been aggressively adding to its fiber capacity to reach enterprise customers through a series of acquisitions, including Telcove, ICG, and Progress Telecom. The company now says that is has the opportunity to increase its reach in metropolitan areas by about 20-fold.

Analysts see Free CAsh by Years End for Level3

BusinessWeek’s June 25 cover story was titled “Telecom Back From the Dead.” It’s tough to think of a more welcome headline in Denver, which lost 75,000 telecom jobs in the early years of this decade as Internet stocks nosedived. Companies like Level 3 and Qwest had built coast-to-coast fiber optic networks that went largely unused. Now, with YouTube, iTunes and other bandwidth-sapping audio and video applications ruling the roost, Internet backbone companies are back.

“Today, Level 3 is alive and well again,” writes Spencer E. Ante, noting that “Level 3 says more than half of its network traffic today is from Web video, vs. no such traffic in 2000.” Level 3 stock hit a high of $129 in March 2000. Two years ago this month, it sold for $2.07 a share and Friday closed at $6.15.

“For a long time they were on death watch, but now they are the last guy standing in the U.S. wholesale (bandwidth) business,” the article quotes analyst Stephan Beckert.

High debt levels have kept Level 3 in the red, but a strong bond market allowed them to refinance, Ante writes, and analysts expect positive cash flow by the end of the year. It’s been a long time coming.

On Thursday, stock guru James Cramer (whose column has been running in the Rocky daily since February 1999) wrote that Level 3 is “a pure play on bandwidth shortage. The stock is starting to creep back now.” It’s the “most explosive stock” he follows, Cramer added, since Apple and Research In Motion have “gone up huge.”

Things look rosier on the rebound; too bad you have to get flattened first.

Digital Voice and Pricing

yesterday, I saw a QWEST advertisement about ‘”’Why pay Comcast Twice what you pay us”’?????????

Even QWEST now getting into the pricing wars and “”DIGITAL VOICE”” is at the center of the advertisement and the position from qwest was to go after Comcast! Quite the interesting marketing ploy!


skype and Radio Shack

Apparently, Skype is going in for a retail partnership with RadioShack, which will sell gear and other products to take Skype mainstream. (Also the company has added Switzerland and Germany to the list of countries where they offer SkypeOut services.) Fantastic way to bring the ire of the entire “old phone system” onto you. I wonder when phone partners put the squeeze on RadioShack. Nevertheless, I think there are many more risks to this retail strategy. If you buy a Skype phone, take it home and start making phone calls and only to realize the quality stinks. What happens then? I suspect, a Sony DRM situation could arise.

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