Level 3 overtakes BT Global Services as fourth-largest global Ethernet player, SDN-based services remain key

Level 3 Communications, which will soon be part of CenturyLink, continues to threaten the global Ethernet services ranking long enjoyed by Orange Business Services and AT&T.

The service provider recently beat out BT Global Services as the fourth-largest global Ethernet player, according to Vertical Systems Group’s Mid-Year 2017 Global Provider Ethernet Services Leaderboard. Level 3 moves up to fourth from the fifth position, displacing BT Global Services.

Vertical Systems Group

Based on mid-year 2017 port share results, Orange, Colt and AT&T continue to rank as the top three companies on the Global Provider Ethernet Leaderboard, respectively.

Joining Level 3 on VSG's mid-year leaderboard are Orange Business Services (France), Colt (U.K.), AT&T (U.S.), BT Global Services (U.K.), Verizon (U.S.) and NTT (Japan).

VSG’s Ethernet provider leaderboard, the industry’s benchmark for multinational Ethernet network market presence, ranks companies that hold a 4% or higher share of billable retail ports at sites outside of their respective home countries.

Level 3 grows Europe, Latin America reach

Following its acquisition of Global Crossing in 2011, Level 3 has continued to enhance its status in global Ethernet by continuing to invest in key geographies including Europe and Latin America. This initially enabled Level 3 to surpass Verizon on the Leaderboard rankings

In 2016, Level 3 expanded its Ethernet presence in the United States and more recently across 27 locations in Europe. On top of that, it expanded Ethernet into an additional 15 EMEA locations.

Rick Malone, principal of Vertical Systems Group, told FierceTelecom that Level 3 has been able to establish a large foothold in Latin America and Europe.

“From a service coverage perspective, Level 3 has a major presence in Latin America and in Europe, in addition to its U.S. business,” Malone said. “The company has seen its global Ethernet base grow rapidly since acquiring Global Crossing six years ago.”

Malone added that Level 3 has also been successful in implementing SDN technology to improve the ordering and provisioning experience for customers.

“From a product perspective, Level 3 is a technology leader with its SDN-based Ethernet dynamic capacity on demand service,” Malone said. "This feature, which was first deployed in the U.S., has been rolled out globally."

Besides Europe and Latin America, Level 3 has also set its sights on getting a greater foothold in the Asia-Pacific region.

In February, the service provider announced plans to expand its Metro 2.0 Ethernet platform and SDN solutions to the Asia-Pacific region. Customers will be able to access Level 3’s Ethernet platform from two access points each in Hong Kong, Tokyo and Singapore. Level 3 has a total of six access points in the region.

Having this global reach will enable CenturyLink to gain a larger presence in the global Ethernet market to better serve its growing base of multi-national corporation customers (MNCs) that are looking for wide-area coverage.

“We expect the CenturyLink deal to enhance both companies' profiles,” Malone said. “CenturyLink gets a major boost in Europe and Latin America, as well as Ethernet dynamic capacity technology, and Level 3 gets access to CenturyLink's US footprint, customer base and managed SD-WAN service.”

Colt remains a challenger

Level 3 may be expanding its global presence, but the service provider will continue be threatened by Colt, which has made similar aggressive expansions across not only Europe and Asia-Pacific, but also now in North America.

Led by former XO Communications veterans Carl Grivner, Colt has been cited by industry analysts as a potential new challenger in the diverse North American business services market.

“One company that has sold a lot of Ethernet outside its home country is Colt,” Malone said. “It is aggressively expanding its presence beyond its traditional pan-European footprint into Asia and North America.”

Earlier this year, a report emerged that Colt will establish a metro fiber provider in the U.S. by leveraging a mix of its own network facilities and assets it will rent from other providers.

Carl Grivner told the Financial Times in a previous report that it will consider options to “build or buy” network assets in major cities including New York, Chicago and San Francisco.

In November 2016, Colt expanded its North American sales and support teams for MNCs that had a presence in the U.S. market.

Focus on orchestration efforts

As Level 3, Colt and other global players expand their Ethernet reach, the need to automate wholesale ordering from other carriers where they don’t have facilities is also becoming an important element to Ethernet service success.

Traditionally, this process has been done in a one-off manner to satisfy a customer's business needs to get connectivity in certain locations outside of the carrier’s network footprint.   

Malone said that having a common set of practices to establish external network-to-network interconnection (ENNI) agreements continues to be an Achilles' heel for service providers, particularly on the global front.

“Orchestration across multiple provider networks is the top challenge constraining new service deployments, according to our research,” Malone said. “This obstacle is being addressed through collaboration among industry players and standards organizations, including efforts to standardize on open APIs and service specifications.”

ATIS and MEF are driving new specifications to ease multi-carrier orchestration issues for wholesale Ethernet services.

The two organizations recently launched a new effort called the Ethernet Ordering Technical Specification: Business Requirements and Use Cases (PDF) that should give service providers a common method to purchase services from one another across multiple countries to satisfy a business customer’s multisite business needs.

Initially focused on business interactions associated with intercarrier ordering of Access E-Line and Standalone UNI products, ATIS and MEF told FierceTelecom in a previous interview that the main goal is to make the ordering and provisioning process for wholesale Ethernet easier.