CenturyLink CEO Storey: Opportunity abounds for more on-net fiber buildings

While Realtors tout "location, location, location," CenturyLink's mantra is "fiber, fiber, fiber." During Wednesday's Citi 2020 Global TMT West Conference in Las Vegas, CenturyLink CEO Jeff Storey once again pointed out that his company's competitive advantage is its fiber.

Storey said that CenturyLink is adding 4,500 to 5,000 on-net fiber buildings each quarter, and currently has 150,000 buildings on-net. By contrast, Level 3 used to add around 500 fiber buildings per quarter. While Storey didn't say what CenturyLink's ultimate goal was for on net fiber buildings, he did say it was "north of 200,000."

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Storey said CenturyLink has a multi-pronged strategy when it comes to deciding the buildings that it brings fiber to.

"There's plenty of opportunity and we look at on-net buildings from a couple of different perspectives," Storey said. "We rarely build it and hope they will come. That's just not a great strategy, especially when you already have already 150,000 buildings in place.

"When you sell as much as we do, we know where we pay off net expenses, and that's one of the first filters that we look at: Where we are paying other carriers to deliver our services to customers? We target those buildings because we can convert that, save the expense and provide a better experience when we're 100% on-net with the customer."

Having more control over the network not only cuts down on CenturyLink's expenses, but also provides a better customer experience, Storey said. By putting a building on-net, CenturyLink can better guarantee redundancy and survivability for the customer, and benefit from looking at all of the incoming requests for services.

"We have plenty of opportunity to continue to expand the (on-net) building footprint," Storey said. "We've done a really good job of once we have the building of converting the off net expense to on net, and continuing to sell to all the new customers in the building."

Storey said CenturyLink has done a good job of serving the small and medium-sized businesses (SMBs) in its legacy footprint, but he sees more SMB-based opportunities in the former Level 3 footprint.

"Level 3 never focused on these customers, and so we have a lot of buildings outside the legacy CenturyLink footprint where we've got great small and medium business customers that we haven't really ever penetrated," he said. "We have rich networks in LATAM, and we have rich networks in EMEA. We partner more in Asia than we build and operate our own networks, but we have great partners throughout Asia Pacific."

RELATED: CenturyLink extends fiber reach in U.S., Europe

In July, CenturyLink announced it would deploy 4.7 million more miles of fiber across the company's intercity networks in the U.S. and Europe. The first phase of the fiber overbuild was completed in June with more than 50 cities across the U.S. connected with fiber.

RELATED: CenturyLink draws up its playbook for edge compute services

CenturyLink's fiber is also key to the company's effort to move more compute resources to the network edge.

In August, CenturyLink announced its blueprint for edge compute services. CenturyLink has booted up more than 106 initial edge compute locations across the U.S. to provide a range of managed services and hybrid cloud solutions to its customers. The edge compute services blend compute, storage and networking capabilities into one package.

CenturyLink's edge compute services include 5 millisecond transport time from its existing locations to the edge, which is ideal for low latency applications such as virtual reality, augmented reality, machine learning, Internet of Things and artificial intelligence (AI.)

During the Citi 2020 Global TMT West Conference, Storey said CenturyLink has "something north of 90% of American businesses within 5 milliseconds of our network."

While fiber trenching can be expensive and disruptive, CenturyLink can tap into the fiber conduit it has collected over the years from acquisitions such as Level 3, Qwest, Broadwing and WilTel. All of that fiber has also led to a robust dark fiber business for CenturyLink.

"There's nobody out there that we think is better at providing dark fiber," Storey said Wednesday. "We've heard some of our competitors talk about they're not winning any big deals, and I know exactly why they're not. Because we win. There are a lot of competitors with assets, but I think that we're really good at delivering those capabilities and customers choose us as a result."