Level 3 Communications, Inc., together with its subsidiaries, operates as a facilities-based provider of a range of integrated communications services. It operates through North America, EMEA, and Latin America segments. The company offers Internet protocol (IP) and data services comprising Internet services, virtual private network, content delivery network, media delivery, Vyvx broadcast, managed, Ethernet, cloud and IT, and cloud connect solutions, as well as Communications as a Service. It also provides transport and fiber services comprising wavelengths, private lines, transoceanic services, and dark fiber, as well as related professional services; local and enterprise voice services, including Voice over Internet Protocol services and traditional circuit-switch based services; collaboration services, such as audio, Web, and video collaboration services; colocation and data center services comprising cloud, hosting, and application management solutions; and security services for mobile users or remote offices, governance, risk management, and compliance. In addition, the company offers wholesale voice services, including voice termination and toll free services. It primarily serves various types of customers, such as enterprises, content, government, and wholesale. Level 3 Communications, Inc. was founded in 1884 and is headquartered in Broomfield, Colorado.
Business Analysis of Level 3 Communications
The Telecommunications Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Level 3 Communications compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Level 3 Communications to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Level 3 Communications with an interactive chart.
- Revenue Growth: Level 3 Communications reported a revenue growth of -0.7% year-on-year during 2016. Telecom Services Industry grew at 8.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Level 3 Communications spent 33.4% of its total revenues on COGS. Telecom Services industry average (COGS share of revenue) in the same period was 37.8%
- R&D share of Revenues: Level 3 Communications R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Level 3 Communications spent 33.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Telecom Services industry average SG&A spending in the same period was 26.6%
- Inventory share of Revenues: Level 3 Communications Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Level 3 Communications invested 8.6% of its total revenues on Accounts Payable (A/P) Telecom Services industry average Accounts Payable investment in the same period was 15.9%
- Accounts Receivable share of Revenues: As a percentage of revenue, Level 3 Communications invested 8.7% of its total revenues on Accounts Receivable (A/R). Telecom Services industry average Accounts Receivable investment in the same period was 11.4%
- PP&E share of Revenues: As a percentage of revenue, Level 3 Communications invested 124.1% of its total revenues on Property, Plants, and Equipments (PP&E). Telecom Services industry average PPE investment in the same period was 79.2%
- Intangibles share of Revenues: As a percentage of revenue, Level 3 Communications invested 105.8% of its total revenues on Intangibles. Telecom Services industry average Intangibles investment in the same period was 116.1%
- Net Margins: Level 3 Communications Net Margins in the year 2016 were 8.3%. Telecom Services industry average Net Margins in the same period were 6.9%
Sector and Industry Association of Level 3 Communications
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Level 3 Communications is associated with Telecommunications Sector and Telecom Services Industry.
Telecommunications sector is comprised of the following industries: Telecom Services; Communication Equipment. The definitions for each of the industries is as follows:
- Telecom Services industry includes providers of fixed-line and mobile telephone services.
- Communication Equipment industry includes providers of communication equipment to the telecom service providers. It also includes companies that own, operate, and lease mobile site towers to multiple wireless services providers.
Industry Ranking of Level 3 Communications
With $8.2 billion revenues, Level 3 Communications ranked number 10 of all the companies in the US Telecom Services industry. There were a total of 36 public companies in the US Telecom Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Telecom Services industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Level 3 Communicationsand its peers on select key performance indicators by clicking the reports provided below