Lumen Technologies To Sell Off Consumer Business On Path Toward Becoming An Enterprise Provider: Report

The service provider, which generates about three-quarters of its revenue from business services, is reportedly starting the process of selling its consumer fiber operations.

Lumen Technologies has reportedly started the process of offloading its consumer fiber operations, according to reports published on Thursday.

Lumen is looking to back out of its legacy mass market business while leaning on AI and next-generation services, such as network-as-a-service (NaaS), to fuel the company's future growth, the company has publicly said as recently as last month.

The move is unsurprising, as Lumen's CFO Chris Stansbury hinted at the potential future sale of the company's consumer business in November as the company continues to pivot toward becoming “an enterprise company.”

The Monroe, Louisiana-based service provider has indeed shifted its operations in recent years towards business services, which now account for about 75 percent of its revenue.

[Related: Lumen Technologies Wins $73.6M Managed Network Services Contract With US Government Accountability Office]

Reuters on Thursday reported that people familiar with the matter said that the company wants to reduce its debt associated with the quarter-after-quarter declines from its legacy business.

The report said that Lumen is working with investment bankers at Goldman Sachs to gauge interest for the business from potential acquirers that include industry rivals. The company could also instead sell a stake in the fiber unit or sign a joint-venture deal with a strategic partner, according to the sources.

Lumen pointed to its policy to not comment on rumors or speculation when reached by CRN.

Lumen President and CEO Kate Johnson said during the company's Q3 2024 earnings call last month that the firm is “not here to find revenue growth in legacy telco.”

"All of our transformation work is in service to customers who need and want to leverage technology like GenAI to transform their business. The legacy networks of yesterday just won't serve tomorrow's enterprise," she said.

Lumen in 2022 split its portfolio of business services into three segments. The Grow segment includes the carrier's higher-margin offerings, such as SASE, security, cloud, and UC collaboration services. Lumen's Nurture segment includes VPN Data Networks and Ethernet services and the Harvest segment, which house the carrier’s legacy services, including voice, only represented 16 percent of Lumen's Q3 2024 business revenues and it declined 14.1 percent overall.

Lumen during its most recent fiscal quarter reported total revenue of $3.22 billion, falling short of Wall Street expectations and representing a decline of 11.5 percent compared to $3.64 billion in the year-ago period.

The company is no stranger to growth via divestures. Lumen last year closed the sale of its EMEA business to Colt Technology Services for $1.8 billion. The company also finalized the $7.5 billion sale of its incumbent local exchange carrier (ILEC) business, which included its consumer, small business, wholesale and mostly copper-served enterprise customers and assets in 20 states to Brightspeed, a two-year old company that was launched by former Verizon executives.