Apollo Management’s acquisition of Lumen operations in 20 states isn’t expected to close until the second half of the year, but just a few months after the deal was announced in August, Apollo Management announced the creation of a new company, to be known as Brightspeed, that would own and manage the Lumen assets. And today Brightspeed announced that it has chosen KGPCo as its “strategic supply chain and logistics partner.”
The agreement targets “day one operations” and planned fiber deployments, according to a press release. Brightspeed has said it plans to invest more than $2 billion in its network.
Neither Apollo Management nor Brightspeed has said much about plans for Lumen employees who work in the 20 states that Lumen is divesting. But when the Brightspeed name was announced in November, the new company also announced its executive team comprised, in large part, of members of the Verizon team that worked on Fios fiber deployments, but not including any current Lumen employees.
And the plan to use KGPCo doesn’t bode particularly well for Lumen’s rank and file in the 20 states.
According to a press release, “KGPCo will supply Brightspeed with a wide range of logistics and process-oriented support and optimization for materials and customer premise[s] equipment purchasing, warehousing and fulfillment, and for field services, including engineering and installation services.”
Brightspeed Chief Administration Officer Chris Creager said in a prepared statement that the Brightspeed team “has been doing an outstanding job laying the groundwork for success in advance of our launch, and this collaboration with KGPCo underscores our commitment to assemble the best partners in the industry to ensure we deliver on our customer and network objectives.”
He added that “we have set ambitious targets for deployment and growth, and the KGPCo team brings deep supply chain and logistics expertise to the table, plus an in-depth knowledge of the communities we look forward to serving.”
The Investment Environment
Lumen plans to retain its operations in 16 other states, including those where the company expects to focus its network investments. The company began talking about possibly divesting some of its assets several years ago, before anyone expected to see so much government funding made available for broadband, and the Apollo deal was announced before the infrastructure act and its enormous broadband budget were adopted.
Brightspeed hasn’t talked about whether it will pursue government funding to supplement its network investment, but that would seem to be a logical move, considering the unprecedented funding that has been allotted to bring broadband to unserved and underserved areas.
One wonders if Lumen would have made the divestiture decision had it known about all the funding that was coming.
Today’s press release reiterates an intriguing comment that Brightspeed made back in November. The company’s assets will “initially be comprised” of the Lumen divestitures. Apparently, Brightspeed has ambitions beyond that.
