Lumen’s President and CEO Kate Johnson was surprisingly candid about the company’s legacy telecom business during its third quarter 2024 earnings call this week. She said the company’s current financial results, coupled with the fact that telcos are not talking about a turnaround, make it difficult to imagine long-term success for Lumen.
Ouch.
She also mentioned Lumen’s plan to cut costs by $1 billion by the end of 2027. The plan is to unify its four network architectures into one, allowing simplification of its product portfolio and IP estate. “While this work is incredibly complicated, given our long history of mergers and accumulation of tech debts, we are on track to developing the plan to execute,” said Johnson. “These cost-out efforts will require upfront spending with a back-end loaded cost takeout curve.”
Lumen is looking at growth based on the AI market and cloud computing. It will be interesting to see what happens to customers in areas served by Lumen (aka CenturyLink)…
“I want to be clear here. We are 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 Gen AI to transform their business. And the legacy networks of yesterday just won’t serve tomorrow’s enterprise,” she concluded.