Lumen Technologies executives talked enthusiastically and in-depth about the company’s transition to health and growth in its two-hour investor webcast on Monday, June 6. The leadership team explained how Lumen is securing its customer base, driving commercial excellence and innovating for growth as it focuses on the future.
“When we are realistic about our challenges, we know we need to be something different than we are today and we’ve had a fast start to that end,” said Kate Johnson, Lumen Chief Executive Officer, in her opening remarks. “First, and probably the most important thing, we made the incredibly difficult, but the right decision, to reallocate capital away from the dividend and into our business. Essentially, we’re funding our future.”
Earlier Monday, Lumen demonstrated its commitment to that future by announcing the expansion of its Quantum Fiber gig and multi-gig Internet services in 18 cities across the U.S. Those cities include Boise, Idaho; Cape Coral, Fort Myers, Naples and Orlando, Florida; Colorado Springs and Denver, Colorado; Des Moines, Iowa; Las Vegas Nevada; Minneapolis, Minnesota and Omaha, Nebraska.
In addition to “super-fast” speeds and simplified installation, Lumen is offering its customers’ service plans that include whole-home Wi-Fi coverage through mesh extenders, parental controls through a mobile app, unlimited data and no-contract commitments. Quantum Fiber internet is on track to connect more than 500,000 homes and small businesses in 2023, according to a Lumen press release.
The service exemplifies just a few of the growth strategies that Lumen’s team focused on during its webcast. Simplifying things for customers and making it easy and fast for them to order or change services were high on the list.
Lumen’s fiber network was in the spotlight, too.
“Today about 12 percent of the company’s market is covered with fiber,” said Maxine Moreau, Lumen President of Mass Markets. “That will significantly change in the coming years.”
Presently, Lumen plans to go very deep and provide a tremendous amount of coverage in six of its urban markets, said Moreau. Keeping the cost of fiber deployment down is also a key consideration due to the scale of the project.
“We know there are certain supply chain challenges with labor and labor costs. We have a very significant supply chain management practice within our finance organization. And because we are building in dense urban markets, we have tremendous scale and are able to provide multiyear commitments to suppliers. We are also looking at and are bringing certain construction functions in-house so we can be in control of our labor costs and provide the kind of capacity we need.”
In addition to its significant density and wide coverage, Lumen’s fiber network is newer than its competitors’ networks, said Andrew Dugan, Lumen’s Chief Technical Officer. The network, which connects to 240 data centers today, is a big differentiator for the company, he added. For example, Lumen is deploying fiber in 432- and 864-bundles. Legacy fiber networks built 20 to 25 years ago typically have 96- to 142-fiber bundles, said Dugan.
“Our competitors can’t match our density,” said Dugan.
In addition, much of Lumen’s fiber has been deployed recently.
“Age matters because manufacturing processes and materials used to make fiber have changed over the years.”
Newer generation fiber performs 60 percent better and carries signals up to twice as far. Building Lumen’s fiber network with so much excess capacity leaves more fiber available for additional cash flow, said Dugan. The company also has a significant amount of conduit it can leverage to keep its deployment costs down, he added.
The sheer scale of its fiber network will help Lumen increase its revenues, too, said Chris Stansbury, Lumen Executive Vice President and Chief Financial Officer, on the investor day webcast.
“Scale begets scale. To the extent that we are hitting these markets in scale and we are building them out efficiently, that allows Maxine to market at scale. It allows us to connect at scale. Those things will continue to drive improvements in revenue as we go forward,” said Stansbury