Lumen, despite grappling with nearly $20 billion in debt, is forging ahead with a strategic plan to achieve growth by 2025, CFO Chris Stansbury said this week.
Specifically, the company will remain focused on stemming churn and legacy product revenue declines in its enterprise segment.
There is “a great opportunity” to monetize Lumen’s consumer network through fiber expansion, as it only has 10% market penetration “because it was ignored for years,” Stansbury said at this week’s Bank of America Investors Conference.
But as the company works toward its growth goal, enterprise will continue to take priority.
“We’re going to stay on pace with the consumer fiber plan. And every extra dollar we have is going into enterprise because that's where we see the most disruptive opportunity and the thing that will drive differentiated returns,” said Stansbury.
Another key to growth will be getting Lumen’s core business stabilized through evolving legacy services into new platforms or product suites, like switching from VPN services to modern SD-WAN and SASE platforms. It will also take Lumen reaching a new customer base with fresh products and services, including the company’s recently launched network-as-a-service (NaaS) and ExaSwitch platforms.
Lumen’s network is comprised of 6 million miles of 400-gigabit waves, with “another 6 million to come,” according to Stansbury. Instead of putting sole focus in the expansion of that network, a unique growth opportunity is to make the consumption of the network easier.
That’s where NaaS and ExaSwitch come in.
In July, Lumen debuted its first and flagship service for its NaaS platform – Internet-on-Demand – a move the company claimed will “disrupt the telecom industry.”
Internet-on-Demand will allow enterprise customers to connect to Lumen’s network, either through a digital portal or via an application program interface (API). The connection can be made at a port-enabled business location or a public data center. NaaS allows users to self-provision their networks, “turning it down” in quieter times and moving data loads freely.
Exaswitch enables a lot of that movement, Stansbury noted. Lumen partnered with Google and Microsoft to launch that platform, enabling service providers and enterprises to quickly route traffic between networks without third-party intervention. With a self-service portal, they can set up connections in 400G increments, which can then be consumed on demand in 100G increments.
When coupled with NaaS, ExaSwitch “puts the power in the user's hand to move massive data workloads quickly,” said Stansbury. “The combination of ExaSwitch and NaaS create different experience for the user where it's not just about transport.”
That said, expanding its network remains a critical part of Lumen’s growth strategy. There are still “huge opportunities” for Lumen to take share in the wavelength market as large enterprise hyperscalers are demanding more transport capacity, Stansbury said.
“We are not abandoning the sale of connectivity,” he added. “What we're talking about is [the network] AND the services that allow the consumption of that to be easier. There's a real share taking opportunity if we get this right.”