Following quickly on the heels of its move out in San Diego, tw telecom’s national metro markets expansion moved back to the East Coast. With the Level 3 deal still pending, they have been pushing steadily ahead with the expansion they announced last November. Today the market is the greater New York City metro area, which may be the biggest metro market in the country but has never been one of tw telecom’s bigger strongholds.
But with the help of that dark fiber from Zayo, tw telecom’s New York team will soon have a bunch of fiber to the north to expand into. Zayo, of course, has the former AboveNet fiber assets, of which the New York footprint was the crown jewel. tw telecom is thus able to add fiber up through the Bronx into Westchester County and over into western Connecticut to Stamford.
There are not many new metro markets left to officially enter in the expansion plans they announced last year (Boston probably being the most visible), but then there probably aren’t very many weeks left before the Level 3 deal closes. Just how Level 3 goes about combining tw telecom’s well established and growing enterprise networking business with its own increasingly dynamic enterprise business will be closely watched. The combined metro assets have always been quite complementary and the potential is great, but the cultures will have to be merged carefully to achieve what they are clearly hoping for.
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I’m guessing that all this feisty expansion will slow down quite a bit once tw telecom ceases to exist in the next month or so. Level 3 will likely put the brakes on these newfangled builds.
Yes they will apply their convoluted business rules and then wonder a few months from now why they couldnot figure out the time warner model of building adds and growth type 2 is good enough!
I think, if you look at the changes since Jeff Storey took the pilot seat, you will see that organic growth objectives have become a bigger part of the overall strategy at LVLT. The TWTC move was not done, as we have noted in the past, as a move to stave off financial degradation, but as a key initiative to expand LVLT’s growth opportunities in the core (and high margin) business, namely enterprise.
Level 3 very much still sees itself as a construction company, even though they rarely do non-success-based expansion these days. They would be wise to take a back seat to TWT in the fiber expansion regard, but in all likelihood they will install their own leaderhip and culture over TWT’s organization, continue the expansion for another year based on existing capital plans, and then squelch it.
This is what they do with every merger. They also don’t necessarily take the time or devote the resources to integrating their resources. It takes them a few years to digest each and every merger, and they tend to lay off or lose to attrition key players for each of their mergers. In the end, it causes them some incremental pain.
And yes, you’re right. Most telecom people have worked with each other’s organizations in the past. We all know each other. Most of my friends who left where-I-work-now or who left Level 3 to work for TWT will leave TWT within a year of the merger to work somewhere else.
I know people who have worked for Level 3 three times but have never actually been hired by Level 3 (go figure).
As far as New York goes, New York State is one of the most difficult places for a telco to operate. Too many overlapping jurisdictions, too much union control, too much right-of-way ownership and extortion by existing utilities. It’s fairly easy to get CLEC access in Manhattan. It’s somewhat easy to get it in Albany, Rochester, Syracuse, or Buffalo. It’s nearly impossible to get it anywhere else in the state without going through a cable television operator.
Nobody has built more than a few miles into Brooklyn or Queens for instance. What a pain in the neck. This bit them big time back in 2001 when everybody’s Internet access was routed through a bunch of Verizon, AT&T, and MCI rings in lower Manhattan. Unfortunately much of it has not changed. And TWT, an especially Level 3, will not expand enough to change that environment.
sorry, but what exactly is a “non-success-based” expansion?
Field of Dreams. “If you build it, they will come.”