Level 3 unfazed by turbulent LatAm economy

The economic slowdown in Latin America is not having a major impact on business for IP communications provider Level 3 given that its projects are long term, though the depreciation of local currencies is hurting the top line.

"Decisions in investing in communications platforms are long-term ones. We see this current situation as circumstantial, at least at the moment," Luis Piccolo, VP of sales for the Southern Cone (Argentina, Chile and Peru) told BNamericas.

"We're not even seeing an impact on business from the oil industry, which suffered a considerable drop in prices. There obviously is an impact from the devaluation of local currencies on our results but we try to separate the management of our business from the numbers. We're still seeing growth globally and in Latin America we expect to grow 10% this year [in constant currency terms]," Piccolo said, speaking on the sidelines of an industry event in Santiago, Chile.

In Q2, Level 3 posted a 6% year-on-year increase in revenues in Latin America. Level 3 CFO Sunit Patel said in July that the company's core network services (CNS) revenue in Latin America, which represented US$146mn of the total income of US$186mn, had risen 5.7% year-on-year in constant currency and declined 7% on a reported basis.

Level 3 has taken a hit in Venezuela where the country has an alternative exchange rate called Sicad 1, weaker than Venezuela's official rate, which Level 3 uses for most of its transactions.