CenturyLink transforms to a technology company with a global connectivity platform
CenturyLink’s Laurinda Pang speaks to Natalie Bannerman about the progress being made after it took over Level 3 and why simplification is the biggest growth opportunity for the combined company
t has been roughly nine months since CenturyLink completed its $34 billion acquisition of Level 3 Communications and, judging by its strong Q2 2018 results, the merger has been nothing but positive. The company brought in a net income of $292 million, compared to $69 million for the same quarter of 2017.
A sea of executives left, but Laurinda Pang, now president of international and global accounts management, survived the cull, just as she did when she served as senior VP of human resources in Global Crossing before that was acquired by Level 3 in 2014.
What progress is being made on the integration of Level 3 and CenturyLink? Pang says: "The integration is going well. We are now into our third quarter of combined operations and are seeing benefits of the combined company and greater opportunities to drive value for our customers." She adds: "Specifically, we have found that many of CenturyLink and Level 3’s products and services are very complementary. CenturyLink’s hybrid cloud management capabilities combined with Level 3’s global CloudConnect platform is an example of our ability to provide more comprehensive solutions for our customers because of the acquisition."
Back in September 2017, I spoke to Aamir Hussain, CenturyLink’s CTO, ahead of completion of the $34 billion merger. At that point he told me nearly $1 billion worth of synergies had been identified – $125 million in capex and $800 to $850 million in operational expenditure, largely from the network. Now, Pang says that not only is the company maximising on those but it has identified a number of others. "We are capturing significant synergies as expected, but the synergies are not just about savings in network expense and operations," she says.
"We are also finding synergies in how we expand our network more cost effectively, justifying bringing more customer locations on net, and investing in our delivery platforms."
With CenturyLink one the key players in the North American market, I was curious to know what the biggest drivers of change are for the region. According to Pang it’s better to look at these drivers globally because, as she puts it, "we’re all interconnected in one way or another".
There are a few areas Pang highlights as key market drivers – the first being the internet of things (IoT) and how providers are preparing to support the incoming influx of connected devices. "Every day we take a step closer to the total integration of IoT into our everyday lives. With 21 billion connected devices by 2020, providers must continue to adapt and evolve to support high levels of connectivity delivered across a safe, secure, reliable network."
Next, she says is the growth of over-the-top (OTT) providers and the implications not only for content delivery but also on how we communicate. According to Pang, last year somewhere in the region of 2.5 billion people worldwide have used at least one messaging app that offered an alternative to voice and text.
Nevertheless, all these drivers are clear opportunities for CenturyLink and the company is prepared and well placed to meet each of them head on.
"When faced with the challenge of connecting, protecting, and optimising the performance of 21 billion devices or providing content on demand, when and where customers want it, we can deliver network-level value added solutions that solve the communications challenges our customers face, now and into the future," says Pang.
CenturyLink is the second largest communications provider to enterprise customers in the US. In addition it has an entire wholesale division providing access to its global network to cable operators and satellite broadcasters, global carriers, and fixed and wireless service providers.
What are the different demands that wholesale and enterprise customers have? Pang says that three things spring to mind: wireless, customer experience and time-division multiplexing (TDM) migrations.Wireless is a "wholesale problem" but it is an opportunity for CenturyLink because "we are not a wireless provider". Instead the company provides wireless providers with fibre-to-the-tower – giving it the opportunity to migrate wireless providers’ old technology to Ethernet and fibre. "As we look at growth in 4G and 5G, CenturyLink is well positioned for a future that capitalises on this technology," she says.
As for customer experience, Pang says: "Carriers are faced with a desire for agile business environments as they try to support the enterprise customer. Whole-sale providers want more automated interactions for quoting, ordering, maintenance and repair. This allows our wholesale providers to have an ease of use and more visibility to provide their customers with real-time updates." Linked to this is the need for TDM migrations. "We will need to migrate customers to newer technologies, such as Ethernet, metro wave and broadband".
CenturyLink’s network covers more than 350 metropolitan areas, containing approximately 130,000 on-net buildings, including 10,000 buildings in EMEA and Latin America. Pang says that fibre is the most effective way to connect its customers. As a result, the company will continue to invest in this area to bring thousands of additional buildings onto its network as well as to "support the build-out of the next generation of wireless technology, cloud connectivity and high performance enterprise networking". The company has also dipped its toe into software-defined networks (SDN) and network functions virtualisation (NFV). (See our SDN & NFV special report starting on page 39.)
For the last seven years, Pang says that CenturyLink has automated tens of thousands of transactions each month that previously required human intervention. "We offer customers the ability to dynamic-ally manage their capacity on demand, scheduled in advance or based on pre-defined thresholds that are meaningful to our customers’ operating environments," she says. "As we progress, virtual network functions will be critical to this construct, supporting robust control of customers’ operating environments across premises, network and cloud domains."
Pang is particularly excited about the prospect of software-defined wide area networking (SD-WAN) and its place within hybrid networking for enterprise customers.
"We see it as a critical component to a customer’s over-arching hybrid networking strategy that combines SD-WAN with both private and public networking to meet the growing/evolving demands on the enterprise," she says.
As if the company doesn’t have enough feathers in its hat, CenturyLink also plays heavily in submarine cables as one of the largest operators in the world. The company has assets linking together North America, Europe, South America and the Asia-Pacific. It also partners with top international network providers for customers that need connectivity beyond the CenturyLink International Network.
"By delivering private network connectivity, we can help drive enhanced visibility and dynamic network controls – with both our customers and those who use IBM Cloud, or Google Cloud, for instance. Our advantage is our ability to connect thousands of the world’s public data centres and over 100,000 enterprise locations to the world’s leading cloud service providers."
As I scan the leadership bios on the CenturyLink website, I see that Pang is one of only three women named in a senior leadership position, three out of a total of 14. I ask Pang what her thoughts are on women in telecoms and if enough is happening to get more women in these top management roles.
She pulls no punches. "The lack of women in tech is more than a pipeline problem. It is an identity crisis systemic in norms that do not promote a more inclusive tech culture among women," she says. "I do not think enough is being done. It takes each one of us to get involved, find our voices and advocate for inclusion. At CenturyLink, we are striving to change the perception of women in technology from the inside out."
Pang concludes, saying: "The products, assets and skillsets CenturyLink now possesses enable us to shoulder much of the burden of the transformation for our customers. We see our own company transforming from being a telecoms company into being a technology company with a high-performance digital global connectivity platform."