Lumen chases small business gains

fiber optic cable
Unlike its competitors, Lumen said it doesn't have a set target for the number of homes it is aiming to pass with its new fiber builds. (Pixabay)

Lumen Technologies executive Maxine Moreau revealed the company is pushing to serve more small business customers in and near its footprint, chasing what she characterized as “tremendous upside” from gains in the segment.

Moreau, who is president of the company’s Mass Markets business, said during a J.P. Morgan investor conference that broadband revenue from her unit is heavily weighted toward residential service, with 95% generated by consumer products. But she tipped that mix to shift over time as it pursues a new focus on small businesses.

“We haven’t historically put a great deal of focus on the really low end of small business,” she explained. “But we believe we’ve got tremendous upside there. We’ve got a lot of businesses that are passed with our fiber and then outside our footprint we’ve got a lot of buildings that are near net or on net. And we’ve got a big focus right now on expanding that coverage and expanding that distribution.”

Addressing Lumen’s broader fiber ambitions, Moreau said while it is interested in upgrading existing broadband customers its primary focus is on capturing new subscribers. However, she noted it hasn’t set a fixed target for the number of new homes it wants to build to.

“We want to enable as much network as it makes fiscal financial sense that is a good return on our shareholder and we don’t have a lot of stranded capital sitting there that’s not generating for our shareholders,” she stated.

Moreau added its build pace will be “success-based,” noting “the faster we can grow our penetration, the faster we will deploy new households and businesses with fiber.”

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Lumen executives previously noted the company is using a micro-targeting strategy for its new builds. Moreau said that includes a hyper-local analysis of a range of factors, such as the overall growth opportunity in a given area, how prior fiber deployments have performed, the cost for construction, population density and expected population growth.

She added this local focus will extend to pricing, which will vary based on competitive offers, Lumen’s penetration rate in a given market, the type of customer and what services are being offered. “We adjust as we need to adjust whether it’s price up or price down to be able to continue to grow that market share,” she explained, adding over time she expects Lumen will be able to charge more “as we demonstrate the value fiber provides over cable or wireless services.”