Lumen Technologies (LUMN) New Street BCG Connectivity Conference summary

2024 accomplishments and setup for 2025

• Recognized as one of Fortune's most innovative companies, reflecting major restructuring and transformation efforts in 2023.

• Balance sheet negotiations unlocked $8.5 billion in PCF deals and an additional $3.5 billion in opportunities, resolving cash flow issues.

• Strategic focus shifted to enterprise networking, leveraging a unique approach to deliver value to large enterprise customers.

Consumer business strategy and potential divestiture

• A potential sale of the consumer fiber business could eliminate 25% of debt and reduce ongoing investment by $1 billion annually, with minimal EBITDA loss.

• No plans to sell enterprise assets; the backbone fiber is critical for enterprise ambitions.

• If a transaction occurs, it would likely be fiber-only, retaining copper assets due to their long-term value in rural areas.

• Copper decommissioning will be managed wire center by wire center, extracting value where possible, including real estate and copper harvesting.

Enterprise transformation and innovation

• Enterprise networking has suffered from underinvestment and price deflation; the new strategy focuses on innovation and leveraging a large, underutilized footprint.

• New network model enables on-demand, low-latency connectivity and direct cloud on-ramps, reducing costs and improving efficiency for enterprises.

• Disruptive offerings slow price erosion by providing financial value through expense reduction rather than price cuts.