CenturyLink’s bid to acquire Level 3 could spark bidding war among wireless operators

CenturyLink’s deal to acquire Level 3 for $25 billion underscores the ever-increasing value of fiber for wireless carriers, Jonathan Chaplin of New Street Research said. And that could lead to a bidding war for Level 3 among mobile operators and others looking to shore up their fiber assets. Level 3 boasts “a strong metro fiber footprint” with roughly 34,000 connected buildings, according to a New Street Research report. That footprint alone isn’t enough to support a nationwide densification buildout, but it could play a key role as carriers prepare to deploy 5G networks and technologies. “This is far from a ‘silver bullet’ for a wireless company – they will need a much more distributed fiber network than Level 3 has in order to densify economically – but it is a start,” Chaplin wrote in a research note to subscribers before the deal was officially announced this morning. “Level 3 is undoubtedly a better asset than XO, which Verizon acquired recently, for example…. Level 3 is an increasingly strategic asset, so we also wouldn’t be surprised to see a competitive process evolve if they are in talks.”