Level 3 Says Sales, Delivery Processes Improving
Level 3 has fixed many of its sales process problems and “generally returned” to quality levels extent before it integrated six network companies acquired the past two years, officials told investors as they reported Q4 results. Last quarter, Level 3 offered lower 2007 and 2008 expectations after struggling to integrate provisioning processes among the acquisitions (CD Oct 24 p11). “We now believe we've created additional installation capacity and we're working hard to increase the rate of sales to use this capacity,” said CEO James Crowe. “What we need to do is under our own control.”
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Q4 systems changes put Level 3 back on track and “generally meeting promised installation intervals,” said Kevin O'Hara, chief operating officer. In the quarter, Level 3 studied products with an eye to improving customer experience, he said. The review let Level 3 set more consistent product definitions and increase sales force training, he said.
It may be “another few months” before Level 3’s sales force hits performance targets, O'Hara said. The infrastructure firm is fulfilling more orders this quarter than in Q4, but sales are still less than the same period last year, he said. Level 3 suspended sale of several products during last quarter’s review, he noted. Many are back in inventory; the rest will return Q1, he said. Level 3 still needs to migrate certain corporate customers to the its core network, he said.
Level 3 rolled out a final integrated provisioning process called “Unity” to all its divisions, O'Hara said. The system now is set up only for new customers, but Level 3 plans to start migrating existing customers from legacy systems this quarter and continue the transition through the year, he said.
Level 3 is “monitoring effects of the economic slowdown,” Crowe said. “We've not seen any indication of any softening of demand or any issues with respect to pricing that affect our outlook.” The company could benefit from a recession because Level 3 is an alternative to incumbents, he said, noting customers’ “propensity” to switch when times get tough.
Crowe was “not satisfied” with Level 3’s 2007, despite a “solid” Q4, the CEO said. The company’s top officials won’t be getting bonuses, he said.