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Level playing field

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  • | 8:53 p.m. February 19, 2010
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For some companies, a down economy can be the perfect time to pursue aggressive growth.

It could be a great opportunity for challengers wanting to take on an incumbent competitor. With resources tight, companies offering a chance to save money have an unparalleled chance.

For Level 3 Communications, it's an opportunity to take on incumbents and gain market share — and they are doing it by giving local managers for responsibility and authority.

Level 3 is a company built around its network, with roughly $25 billion invested in a communications system that connects users around the world. Founded in 1997, what started as a network bandwidth wholesaler has recently added to the services it provides.

Today, the company is hoping to become a full-service provider, targeting businesses that spend more than $5,000 a month on communication.

To do that, Level 3's local management resources are being ramped up. Leaders at the Broomfield, Colo. headquarters are entrusting regional general managers with meeting local customer needs, and it is paying off.

According to Jeff Tench, president of Level 3's Business Markets group, other locations that have had regional managers given increased responsibilities have seen 100% increases in sales.

Scott Turer is responsible for Level 3's Tampa Bay operations, and he says he is motivated by the company's position in the market and the freedom to expand his staff.

“We're building a sales force,” Turer says, having doubled his staff's size the past few months.

He says customers have been receptive to Level 3's alternative offerings. That experience would fit with the Tampa Bay business community's reputation for going after the best value, regardless of brand name (corroborated by Peter Armstrong in this week's story on Sunera).

While most conversations with potential customers start with a discussion of their existing services, Turer says his team is also going after business by offering new services.

For example, Level 3 offers co-location services. It's a set-up that can save businesses in the event of a hurricane or other natural disaster by providing backups of all files at different geographic hubs. But there are plenty of competitors in that field, also.

Whether it's switching over or adding on, the key is to start a business relationship, Turer says, with the hope that it can be built onto down the road.

The shift to local is the latest in a series of business moves for Level 3. Following several recent acquisitions, the company has transitioned from providing wholesale services to large clients to offering business-to-business connectivity service.

Of course, liquidity is often needed to implement major strategy changes. But Level 3's strong fourth quarter performance netted $97 million. Furthermore, the company has cash in reserve. At the end of 2009, the company listed $836 million in cash on its balance sheet.

A down market can bring other opporotunities — such as hiring strong people. “It's incredible,” Turer says of the people available.

— Alex Walsh


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