Video demand prompts Level 3 to double CDN capacity

LAS VEGAS--Level 3 Communications (NYSE: LVLT) announced it has expanded the global capacity of its content delivery network (CDN) by more than double to support customer growth and increased demand.

The company pointed to increased demand from entertainment and enterprise users as the driver for its expansion of global CDN capacity to more than 5.6 Tbps (terabits per second)--up from 2.15 Tbps in late 2010.

"It's a substantial increase from a year ago," Mark Tayor, senior vice president of content markets group for Level 3 told FierceOnlineVideo. "We're expanding rapidly into South America and also are going to add POPs in Africa over the next few month. It's a nice growth story for us."

Taylor said that Level 3 has expanded capacity in its 49 major markets and also expanded to Buenos Aires, Argentina; Rio de Janeiro; Medellin, Colombia; Jeddah, Saudi Arabia; Montreal and Toronto.

The growth, Taylor said, has in most part been organic, without much coming into the funnel from Level 3's recent acquisition, Global Crossings.

"Global Crossings has made it easier to put our POPs in South America, but that team is still developing," he said.

One of Level 3's largest customers, Netflix (Nasdaq: NFLX) has benefited from the expansion, allowing it to more aggressively roll out its international service.

Media and entertainment drives a massive amount of our margin," said Taylor. And, he said, despite the commoditization of CDN pricing, Level 3 is prepared to adapt.

"It's still surprising how fierce the pricing competition is," he said. "But you have to be prepared for commoditization and be able to compete at that level."

For more:
- see this release

Related articles:
Limelight loss widens in Q4, still beats analysts
Level 3 Communications' losses narrow, revenue up in Q4
Level 3 to provide HD broadcast services for Super Bowl XLVI
Level 3 closes Global Crossing deal, touts end-to-end network advantage
Level 3's Global Crossing acquisition gets DOJ, FCC regulatory approvals

Suggested Articles

Discovery's CEO said the company was putting finishing touches on bringing an aggregated direct-to-consumer product to the market.

The company says it will serve advertisers with a single transactional point of entry for its digital video content.

Cinedigm struck a distribution partnership with Littlstar for many of Cinedigm’s linear and VOD streaming channels to run on Littlstar’s platform.