It sounds like Level 3 has not begun to roll out 100G at all. Which is quite a bit of latent demand for the future.
--------------------------------------------------------------------------------------------------------------------------------------
Donna Jaegers - D.A. Davidson & Co., Research DivisionOkay. Since I get a whiff on that one, then on the -- can you talk about on the 100 gigabits, how much of your network is upgraded to that? Because obviously, it seems like a lot of the smaller players are trying to use that to take share away from you guys on the wholesale side.
Jeffrey K. Storey - Chief Executive Officer, President and DirectorYes, I can't give you -- I don't want to whiff twice with you, Donna. But I can't give you the exact percentage on how much our network is capable for different speeds. I don't believe there's people taking business from us because of a product gap that we have or a capability gap that we have. I think that our product set is completely aligned with the market, and we will continue to roll out those products and deliver those products and all the various locations that customers are requesting them. Sunit, do you want to add?
Sunit S. Patel - Chief Financial Officer and Executive Vice PresidentYes. The only thing I would add is I think that we look at everything from a -- I mean, I agree with Jeff's product comment because I really don't see much demand from customers wanting that way. But what you should know is we look at it I think from a cost perspective and a margin perspective. And the key is we're not fiber constrained like a lot of other people are. I think the more fiber constrained you are, the more you have to upgrade to 100 gig. For us, we can ride much cheaper on a 10 gig gear because we have more fiber, and so we have more degrees of freedom to move things on to like new fiber peers up. Some of our competitors don't have that optionality. And so many of them, the 100 gig although it might not be cost-effective. But our view is becomes cost effective we'll deploy it. But as Jeff pointed out, we are not seeing any big demand from customers at 100 gig. They don't really care whether it's 10 by 10 gigs or whatever the need is. I think that would be a good summary of that.
---------------------------------
At the bottom of Slide 6, capital expenditures were $208 million in the second quarter of 2013. Year-to-date, capital expenditures as a percent of revenue was 12%.
---------------------------------
These types of investments are included in our capital expenditure guidance of 12% of revenue. |
