“We are not here to find revenue growth in traditional telecom companies. All of our transformation work serves customers who need and want to leverage technologies like Gen AI to transform their business. Yesterday’s legacy networks simply won’t serve tomorrow’s business…the customer experience in traditional telecommunications is neither fast nor easy, especially in the complex, hybrid, multi-cloud environments that have become the norm for all businesses,” Kate Johnson, CEO of Lumen. said.

Lumen Technologies, formerly CenturyLink, is betting big on AI as a way for the telecommunications-turned-technology provider to continue its turnaround, but it will still take some time to show up in the company’s finances, according to top executives at the company. ‘business.

Lumen President and CEO Kate Johnson said that unlike other operators in the same market, Lumen is not looking to expand with traditional telecommunications services.

“I want to be clear here. We’re not here to find revenue growth in traditional telecom companies. All of our transformation work is in service of customers who need and want to leverage technology like GenAI to transform their business. Yesterday’s legacy networks simply won’t serve tomorrow’s business. They’re not big enough, they’re not fast enough, and they’re not secure enough. And of course, the customer experience in traditional telecommunications is neither quick nor easy, especially in the complex, hybrid, multi-cloud environments that have become the norm for all businesses,” Johnson told investors at the company’s third quarter 2024 earnings conference call on Tuesday. evening.

Johnson said the three largest cloud providers – Amazon Web Services, Microsoft Azure and Google Cloud, as well as social media giant Meta – have chosen Lumen as their trusted network for AI.

“Lumen is building the backbone of the AI ​​economy. The market now recognizes that AI needs data in these data centers, and these data centers need to be connected… Big tech chooses Lumen because “Our conduit-based intra- and inter-city fiber network is geographically diverse and was built for this moment,” she said.

Lumen also said its network-as-a-service (NaaS) platform, which was introduced in July 2023, is having a promising first year as more than 400 enterprise customers have adapted Lumen NaaS. Johnson said the offer had “fundamentally repositioned” the company.

“The NaaS overlay really allows our customers to get the network elements they want, when they want them, how they want them, in true consumption form,” she said.

The CEO acknowledged that the plan Lumen is pursuing is different from other telecom giants that are doubling down on core connectivity services.

“It will take some time for the growth factors I have discussed to overcome the secular headwinds and appear in our finances, but we are confident that our plans will achieve exactly that,” Mr. Johnson said.

Lumen divided its business services portfolio in 2022 in three segments. The Grow segment, which includes the carrier’s higher-margin offerings such as SASE, security, cloud and UC collaboration services, saw sustained growth of 4% during the quarter. The Grow segment accounted for 45 percent of the company’s total revenue.

Lumen’s Nurture segment includes VPN data networks and Ethernet services and accounted for 29 percent of its business in the quarter, but declined 15.2 percent. The Harvest segment, which houses the operator’s existing services including voice, accounted for 16% of Lumen’s revenue in the third quarter of 2024 and declined 14.1%.

Lumen’s Large Enterprise segment fell 8.2 percent to $839 million in the third quarter, compared with revenue of $914 million a year ago. The midsize enterprise segment declined 6.9% to $471 million in the third quarter, compared to $506 million in the third quarter of 2023. North American enterprise channels fell 6.9 ​​% to $1.74 billion, compared to $1.87 billion a year earlier.

Overall, total revenue for Lumen’s Business segment fell 12.7%, totaling $2.54 billion in the third quarter, compared to $2.91 billion a year ago. The mass market segment fell 6.9% to $685 million from $736 million in the third quarter of 2023. Wholesale revenue fell 9% in the quarter to $706 million. dollars, compared to $776 million in the same quarter of the previous year.

Chris Stansbury, Lumen’s chief financial officer, said about 32 percent of Lumen Business’ revenue decline was the result of its recent divestitures, post-closing commercial deals and the sale of CDN contracts.

The company completed the sale of its EMEA operations to Colt Technology Services last November for $1.8 billion. Lumen in October 2023 completed the $7.5 billion sale of its incumbent local exchange carrier (ILEC) businessthat included its consumer, small business, wholesale and primarily copper-served customers and assets in 20 states, to Brightspeed, a two-year-old company that was started by former Verizon executives.

Stansbury hinted at the potential sale of Lumen’s consumer business, as the company continues to strive to become “a business.” The Monroe, Los Angeles-based service provider has shifted its focus in recent years toward business services, which now account for about 75 percent of its revenue.

For the third quarter of 2024 ended September 30, Lumen reported total revenue of $3.22 billion, below Wall Street expectations and representing an 11.5% decline from $3.64 billion. dollars from the previous year.