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CenturyLink Unit Adds More Centers

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Savvis Inc. – an affiliate of leading telecom service provider CenturyLink Inc. (CTL) – announced plans to enlarge its global foothold with the expansion of 10 data centers within 2013.

Considering the growing demand for enterprise cloud, managed hosting, network and colocation services, the company will inaugurate two data centers – one each in Hong Kong and London. Along with this, Savvis will expand other existing data centers in eight cities, namely, Boston, Atlanta, Dallas, Piscataway, Tampa, Washington, D.C., London and Singapore.

This enhancement will add approximately 85,000 square feet of new space to Savvis' worldwide presence. With over 50 data centers spanning across North America, Europe and Asia, Savvis dedicates nearly 2.4 million square feet to data centers.

Savvis aims to capture more businesses by increasing its data center wings in strategically suitable and secure locations, boosting the interconnectivity of the company’s core operations.

In mid 2011, CenturyLink acquired the information technology (IT) services provider Savvis that specializes in cloud infrastructure and hosted IT solutions for $2.5 billion. Since then, the unit has contributed immensely in uplifting the performance level of CenturyLink.

Apart from launching two cloud products – Savvisdirect and Symphony Cloud Storage –in Dec 2012, Savvis started subscription-based hosting services for SAP AG’s (SAP) HANA platform – an enterprise data product – in March this year.

CenturyLink, which has business tie-ups with Verzion Communications Inc. (VZ), has a Zacks Rank #3, implying a Hold rating.

We expect the company to perform impressively in the coming months backed by broadband expansion, completion of fiber builds, better cloud computing services and the launch of Prism TV in new markets.

However, stiff competition from other low-cost telecom operators like LEAP Wireless International Inc. (LEAP), regulatory issues and the constant need for technology upgrades may impede the company’s operating performance going forward.

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