AT&T

Exclusive: CenturyLink to add data centers

March 25, 2014: 8:30 AM ET

The telecom company plans to expand its cloud offerings.

FORTUNE Telecom company CenturyLink Inc. (CTL) is expected to announce plans to expand its data center presence in eight markets in a bid to capture revenue from corporate customers making the move to so-called cloud computing and other online services.

The Monroe, La., operator says it will open three new data centers in North America, and will expand five existing facilities this year.

CenturyLink, the third-largest provider of local phone service (behind AT&T (T) and Verizon (VZ)), in recent years has embarked on an aggressive acquisition strategy, buying Qwest and cloud infrastructure company Savvis. With 2013 revenue of about $18 billion the company ranked No. 150 on the most recent Fortune 500 ranking.

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The company will announce new facilities in Phoenix and Minneapolis, markets where it offers local phone services. "In Minnesota, that's new capacity in a market where we have a good customer mix with a big Fortune 500 presence for a market its size," says Jeff Von Deylen, president of CenturyLink Technology Solutions.

And while CenturyLink will offer co-location services -- the ability for customers to essentially lease equipment, bandwidth, and space -- Von Deylen stresses that the company's expansion will also enable it to offer more sophisticated (and higher margin) managed services. There has been some discussion in tech circles about whether there is a glut of co-location facilities.

"We don't believe there is an overcapacity issue," Von Deylen says "If you just compete to offer co-location, yes, there's price competition. Our differentiation is our suite of co-location, cloud services, and networks at the enterprise level. We win on a very regular basis customers who want to buy multiple products."

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