Cable operators including Comcast and Charter Communications have found success with mobile MVNO offerings, touting them as a boon for broadband churn reduction. But Lumen Technologies isn’t keen to follow in their footsteps, citing a lack of demand.
Maxine Moreau, Lumen’s president of Mass Markets, noted during a Cowen investor conference “We’ve done MVNO deals historically with AT&T and with Verizon – this was before I was in the role I’m in now – and there really wasn’t a high interest in that bundle. And so right now we don’t feel like it’s critical to be a part of our bundle.”
Though she said consumers and small businesses are currently not demanding a broadband plus mobile package, Moreau stated “We’re always open. If we decide down the road that it makes sense, we’re very open.”
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Cable operators have pointed to broadband stickiness as a primary benefit of offering mobile service. But Moreau said Lumen is already seeing a reduction in churn in areas where it has deployed its Quantum Fiber service for consumers and enterprise.
“When we sell a fiber service, we see that the customer stays with us longer, we see significantly less churn and as a result of that the customer lifetime value is higher,” she said, adding “the number of times a customer needs to call in for any type of service issue” is also lower because “fiber infrastructure is more reliable than copper infrastructure.”
Lumen recently inked a $7.5 billion deal to sell off its ILEC assets in 20 states, stating at the time it planned to ramp fiber deployments in its remaining 16-state footprint. The company has not disclosed how many locations it hopes to pass or the timeframe in which it expects to complete its deployments.
While AT&T revealed this week it expects to miss its fiber deployment target for 2021 due to supply chain issues, Moreau said it hasn’t encountered any such problems.
“We have not see any issues,” she said. “We have diversification not only in equipment and fiber but also in labor.”
As its rollouts move ahead, Moreau said the ramp in penetration rates will vary by market based on a variety of factors. In areas where it has pursued local marketing and struck agreements with building owners to provide instant activations “we’ve seen north of 40, 50 percent in months.” “So it really depends on the property, the service and the competitive dynamics,” she concluded.