Lumen’s CEO: AI is driving, multi-cloud is driving private network and fiber service opportunities

“We're seeing a dramatic rise in demand for high capacity, low latency network, and edge services, often requested in custom private networks,” she said.

Johnson added that this trend results from its business customers migrating to AI and cloud structures.

“We believe this is driven by the advent of GenAI and the complexity of hybrid multi-cloud architectures,” she said. “We've established a dedicated team focused on capturing this demand, and we are confident this will be an important tailwind for our turnaround. It is a spike in demand, perhaps a once-in-a-lifetime opportunity to leverage what we do best at Lumen.”

Fiber, channel partner capabilities

In tandem with private networks, the service provider is seeing continued demand for wavelength services and dark fiber. Business customers can access Lumen’s growing optical network and its on-demand capabilities.

In late 2022, Lumen announced that it would invest another 6 million fiber miles, which is expected to be installed by 2026.

Upon completion, Lumen's U.S. intercity investment will reach nearly 12 million fiber miles, creating diverse routes to more than 50 major cities nationwide. Additionally, Lumen continues upgrading its infrastructure using a multi-conduit system, allowing for the quick deployment of the latest fiber technology.

“Customers are coming to us for a couple of reasons,” Johnson said. “Number one, we have conduits, so we can continue to over-pull fiber and give much flexibility and room to grow. The second reason is the digital platform and our mission of delivering capacity on demand at every network level. It's the value proposition of doing business with Lumen, so that's the first part.”

She added that the other key element of its business services strategy is to further develop its channel partner program. Participating channel partners have access to sales, marketing, development, operational, and maintenance support throughout the entire customer lifecycle.

Unsurprisingly, Lumen’s channel partner program focuses on customer opportunities integrating IP and SASE offerings.

“We're excited to continue to recruit and help our partners be as productive as humanly possible,” Johnson said. “We're seeing improvement there, but it's not enough yet. And so, I look at it as a huge opportunity to have more feet on the street selling these net new capabilities. And I think we're improving at building the rhythms around a true commercial engine, which is both direct and indirect for these net new capabilities like NaaS, like enterprise, to cloud connectivity through ExaSwitch, and like Lumen Defender with our security offerings.”

Enterprise revenue challenges, opportunities

Despite the momentum Lumen is seeing for private networks and channels, the service provider saw some revenue headwinds during the first quarter.

Lumen’s considerable enterprise revenue declined 5.8% to $858 million. “Continued strength in IP and enterprise broadband within grow product revenue was offset by lower VPN and voice, which contributed to the declines in our nurture and harvest products,” said Chris Stansbury, Lumen's CFO.