Lumen’s big fiber roll-out push from 2.5M to 12M locations passed in the next few years

At the 2022  CitiApps Economy Virtual Conference yesterday, Lumen Technologies, Inc (formerly CenturyLink) President and CEO Jeff Storey said his company plans to increase its fiber deployments from 2.5 million locations to 12 million, which represents a five-times increase over the company’s traditional deployment rate.  Storey said Lumen had been investing about 400,000 new fiber locations passed every year. “We have been very strategic and targeted and micro targeted in our approach to. We wanted to build — all digital experience of the quantum fiber platform, we’ve done that our NPS scores are really, really exceptional for quantum fiber. And so we’ve proven that we can build successfully, we proven that we can deliver successfully, and built all of the systems around the customer unnecessary to do that. So we’ll continue to invest there.”

Storey did not state how many years it would take company to reach 12M locations passed.

Separately, Lumen is expecting to close a sale of its local exchange business (formerly US West) to Apollo Funds in the second half of the year, which means it will retain mostly markets in metro areas.  “We’ve rewritten the consumer playbook,” said Storey, noting that the company is now positioned as an “all-digital fiber brand.”

Like other broadband providers that have relied, in large part, on traditional copper network infrastructure, Lumen has been losing broadband customers in recent years. The company hopes that its investment in fiber will reverse that trend and has set a goal of returning to revenue growth within two to three years.

“Fiber wins. If you are competing with any other technology, fiber wins.  And we’ll continue to deliver the majority of our services over fiber infrastructure and integrate those capabilities into an all digital experience. And when you do that, I think Lumen wins.” Storey said.

Lumen’s office building at 1025 Eldorado Blvd, Broomfield, CO 80021

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Not surprisingly, considering Lumen’s emphasis on the business market for telecom services, Storey went on to note several advantages that are likely to be most appealing to business customers. In particular:

Fiber and data communications are more important than ever. But we don’t just look at it as data growth opportunity. For example, enterprises are shifting. I already said this, but more and more to hybrid environments. With hybrid employees, hybrid computing, hybrid network connect those employees, the computing, the applications that they use in the most sensible manner.

We look at combining our fiber infrastructure with capabilities like SASE, edge computing, and dynamic connections. Dynamic connections is really our network as a service capability. We create hybrid computing and networking environments that empower the enterprises to acquire, analyze and act on their data.

And looking over the Lumen platform, we enable new technologies and expanding our addressable market and we believe we’re in a great position to deliver. At the beginning of last year, we announced we’d have edge computing resources within five milliseconds, from 95% of U.S. enterprises. By the end of the year, we actually completed that somewhere in the middle of June, July, and today we’re around 97%. So we believe we have a great infrastructure tightly coupled with our fiber capabilities and we think there’s a great opportunity. Lumen and industry analysts agree, that is a major opportunity with 10s of billions of dollars in revenue potential. But it’s more than focusing on one product. It’s our ability to combine our services into holistic solutions for our enterprise customers.

Because we are a fiber-based platform… bringing our services to our customers with the connectivity of the fiber but also to cloud service providers, major data center providers,…private data centers of our customers [and] to eyeball networks,” he said, “we are in an excellent position to… help [customers] acquire their data, analyze their data [from] all of these different cloud options… and then act on their data.

In his opening remarks, Storey summed up Lumen’s strategic plan for 2022:

Our top priority is revenue growth, and we’re very focused on that, 2022 will be somewhat an investment year for Lumen, something CapEx and OpEx. CapEx is generally success-based initiatives that we have. But OpEx is a little more proactive investing in things like product development, marketing, brand, and other go-to-market initiatives that we have. We will continue to focus on investing and augmenting the Lumen platform, we believe it’s a great way to enable new technologies and expand our capabilities and our addressable market. We’ve already announced our accelerated quantum fiber bill, and plan to add more than 12 million locations over the coming years in the remaining 16 states that we operate in the states.

Lastly, we continue to invest in transforming our business for better customer experience, and operational efficiencies. We’ve done a great job of improving our customer experience, at the same time taking costs out of the business by using the technologies that we sell to our customers and then using other technologies in our business direct.

This strong increase in fiber deployment echoes what was said earlier this week at the 2022  CitiApps Economy Virtual Conference from Scott Beasley of Frontier Communications and AT&T’s CEO John Stankey.  Also, from MSO Cable One’s joint venture with three private equity firms.

References:

Lumen’s Fiber Internet Offerings:  https://www.lumen.com/en-us/networking/business-fiber.html

Transcript: https://seekingalpha.com/article/4478335-lumen-technologies-inc-lumn-ceo-jeff-storey-presents-citis-appseconomy-virtual-conference

Webcast Replay: https://kvgo.com/citi-apps-economy-conference/lumen-technologies-jan-2022

CEO: Lumen Plans Fiber Deployment Rate of 5x its Historical Rate

 

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