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About Lumen Technologies Inc. (NYSE: LUMN)
Lumen Technologies Inc., formerly known as CenturyLink, is a global technology and telecommunications company that provides enterprise-grade networking solutions to businesses, government organizations, and hyperscalers. Headquartered in Denver, Colorado, Lumen has positioned itself as a critical enabler of the digital economy, leveraging its expansive fiber-optic infrastructure and advanced networking technologies to meet the demands of the data-driven 4th Industrial Revolution.
Core Business Areas
Enterprise Networking Solutions: Lumen specializes in delivering high-capacity data transport, edge computing, and managed services to enterprises. Its offerings include colocation services, data center connectivity, and end-user internet and phone services. The company’s extensive fiber network, spanning over 450,000 route miles, provides the backbone for its enterprise solutions.
Cybersecurity and AI-Driven Solutions: Lumen’s cybersecurity portfolio includes advanced threat detection and prevention tools, such as Lumen DefenderSM. Powered by its Black Lotus Labs® threat intelligence team, these solutions utilize AI and machine learning to protect businesses against sophisticated cyberattacks.
Private Connectivity and Cloud Integration: Lumen’s Private Connectivity Fabric℠ offers secure, high-bandwidth connections tailored for hyperscalers and enterprises managing AI-intensive workloads. These solutions are designed to support the growing demand for seamless cloud integration and data center interconnectivity.
Market Position and Strategic Focus
Lumen has undergone a strategic transformation, shifting its focus from consumer services to enterprise and hyperscaler markets. Following its 2017 merger with Level 3 Communications and the 2022 divestiture of its local exchange carrier business, approximately 75% of Lumen’s revenue now comes from enterprise services. The company’s partnerships with major technology firms, including Microsoft and Meta, highlight its pivotal role in enabling the AI economy. By continuously upgrading its fiber infrastructure and investing in next-generation technologies, Lumen aims to deliver scalable, secure, and high-performance networking solutions tailored to the needs of modern enterprises.
Competitive Landscape
Operating in a highly competitive market, Lumen faces challenges from telecommunications giants like AT&T and Verizon, as well as specialized fiber network providers. Its differentiation lies in its expansive ultra-low-loss intercity fiber network and its ability to provide custom, AI-ready connectivity solutions. Lumen’s focus on cloudification and edge computing further strengthens its competitive edge in the rapidly evolving digital landscape.
Challenges and Opportunities
Lumen’s transition from legacy consumer services to enterprise-focused operations presents both challenges and opportunities. While the company benefits from growing demand in AI, cloud, and data-driven industries, it must navigate financial pressures, including high debt levels and declining revenues from legacy products. Nevertheless, its strategic investments in fiber infrastructure and cybersecurity position it well to capitalize on the increasing need for reliable, high-capacity networking solutions.
Conclusion
Lumen Technologies stands as a key player in the enterprise connectivity space, driving innovation through its robust fiber network, AI-driven cybersecurity tools, and tailored private connectivity solutions. By aligning its offerings with the needs of the digital economy, Lumen is empowering businesses to unlock their full potential in an increasingly data-intensive world.
Lumen Technologies will present at the Cowen 7th Annual Communications Infrastructure Summit on August 10, 2021, at 6:55 p.m. ET. The presentation will be led by Maxine Moreau, President of Mass Markets. Investors can access the webcast through the Lumen Investor Relations website. Lumen Technologies operates across approximately 450,000 route fiber miles in over 60 countries, focusing on delivering secure platforms for applications and data, enhancing business and community experiences.
Lumen Technologies has agreed to sell its ILEC business, which includes consumer, small business, and enterprise customers in 20 states, to Apollo Global Management for $7.5 billion, including approximately $1.4 billion in debt assumption. The deal is part of Lumen's strategy to transform and grow, retaining its ILEC assets in 16 states and expanding its fiber network. The transaction is expected to close in the second half of 2022, subject to regulatory approvals. This move is aimed at meeting the rising demand for high-bandwidth connectivity.
Lumen Technologies reported Q2 2021 revenue of $4.924 billion, down from $5.192 billion in Q2 2020. Adjusted EBITDA reached $2.089 billion, showing stability compared to the previous year. The company authorized a $1.0 billion stock buyback and is set to sell its ILEC assets for $7.5 billion, bolstering future growth prospects. Lumen updated its 2021 outlook, projecting Free Cash Flow between $3.1 billion and $3.3 billion.
Lumen Technologies (NYSE: LUMN) is enhancing its network capacity with a new subsea fiber route connecting Richmond, Virginia, and Paris, France, utilizing the Google Dunant cable system. This move addresses the growing demand for international bandwidth, driven by a surge in cloud services, as 70% of organizations plan to increase spending on cloud connectivity. With 450,000 route fiber miles, Lumen aims to provide diverse, low-latency connections for global businesses. Services on the new route are set to be operational by September 2021.
Lumen Technologies (NYSE: LUMN) has signed an agreement to sell its Latin American business to Stonepeak for $2.7 billion. This sale, valued at approximately 9X the business' 2020 Estimated Adjusted EBITDA, allows Lumen to focus investments in key growth areas and provides flexibility for capital allocation. The current leadership team will remain in place under Stonepeak, which aims to enhance the business's market presence. Lumen will maintain a strategic relationship with the new company to serve existing customers in Latin America.
Lumen Technologies (NYSE: LUMN) has announced a significant expansion of its fiber network in Europe, enhancing service capabilities in France, Switzerland, and Spain. Key developments include a new 180-mile fiber route connecting Lyon and Geneva, with connections to three new cities. In Spain, a 170-mile segment was added to complete the national fiber ring. This expansion aims to provide faster connections, lower latency, and improved security, supporting the demand for high-speed broadband. The Lumen network now includes approximately 23,600 route miles in Europe, accessed by over 2,000 on-net buildings.
Lumen Technologies (NYSE: LUMN) has secured a significant 12-year task order valued at $52 million to enhance high-speed connectivity for the U.S. Army Recruiting Command. This contract, awarded under the General Services Administration's $50 billion Enterprise Infrastructure Solutions program, includes an initial one-year term with 11 additional one-year options. The high-speed internet and VoIP solutions will facilitate recruitment efforts across the U.S. and territories, supporting the Army's mission to attract qualified individuals.
T-Mobile (NASDAQ: TMUS) and Lumen Technologies (NYSE: LUMN) have enhanced their partnership to provide government agencies with a fixed wireless access service utilizing T-Mobile's 5G network and Lumen's edge computing platform. This service is now included in Lumen's offerings under the GSA's $50 billion Enterprise Infrastructure Solutions (EIS) program, aimed at meeting the critical needs of government agencies. Officials emphasized the need for scalable and secure networks for various applications, including emergency response and data access.
Lumen Technologies has announced a strategic relationship with Microsoft to enhance enterprise application delivery by integrating Microsoft Azure capabilities onto the Lumen platform. This collaboration aims to provide mutual customers with low-latency and secure application delivery using Lumen's global Edge Computing services. Key initiatives include certified Azure deployment in Lumen Edge Computing nodes, solutions for Private 5G networks, and managed services for Microsoft software. Lumen will leverage Azure for its internal transformation and has been named a preferred partner for Azure services globally.
Lumen Technologies (NYSE: LUMN) will announce its second quarter 2021 results on Aug. 4, 2021, with a live conference call scheduled for 5 p.m. ET. Investors can access the call on Lumen's Investor Relations website or via phone. An audio replay will be available from 7 p.m. ET on Aug. 4 until Nov. 2, 2021. The company emphasizes its extensive global reach, operating approximately 450,000 route fiber miles across 60 countries, aimed at advancing technology to enhance business and community experiences.
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