Lumen Technologies announced the sale of its ILEC business to Brightspeed for $7.5bn which it believes will provide new business and growth opportunities.
An Incumbent Local Exchange Carrier (ILEC) is any U.S. telephone company that provided local service when the U.S. Telecommunications Act was passed in 1996.
Lumen’s ILEC is operational in 20 states, and the North Carolina-based broadband and telecoms service provider, Brightspeed, reported it had received regulatory approval from each of these 20 state governments in June this year.
Jeff Storey, Lumen president and CEO, said:
“This is an important step in realizing long-term shareholder value while focusing our portfolio on the strongest growth opportunities, including investments in markets where we can concentrate our resources to reach more customers with maximum efficiency.
“Brightspeed has acquired a business with a strong customer base, dedicated employees and a platform for future growth. I’m very proud of our team for their dedicated work in closing this transformational project.”
In August 2020, Lumen announced plans to sell its CenturyLink assets to Apollo Funds for the same price of $7.5bn. As part of the deal, Lumen kept hold of 687,000 fibre subscribers, as well as assets in 16 states. Apollo gained assets in 20 states and fibre subscribers.
Soon after, Apollo plied $200m into FirstDigital Telecom, a Utah-based carrier.
Two months later, Apollo acquired a Lendlease telecoms platform and, in May the following year, it bought Verizon’s media assets for $5bn.
The next year, in November 2021, Apollo created Brightspeed, adding another telecoms notch to its belt.
Brightspeed said recently that it will invest over $2bn across the next five years to provide Quantum Fiber broadband to millions of homes and businesses, “including in many rural and suburban locations where fibre and advanced technology have not yet been deployed.”
In August 2022, the FCC (Federal Communications Commission) approved the sale of Lumen’s ILEC to Brightspeed.
Brightspeed’s VP of Public Policy and Government Affairs, Tom Dailey, commented that it would help to “close the digital divide in communities across the country that are most in need of high-quality broadband.”
Lumen entered into an agreement to sell its ILEC with Apollo Funds in August 2021.
Storey said at the time: “This transaction is an important step in our continued efforts to transform Lumen and drive future growth for our company.”
“We are pleased with the attractive valuation we received for these assets, which highlights the overall value of Lumen’s extensive asset portfolio. Apollo Funds will receive a great business with a strong customer base, dedicated employees, and a platform for future growth.”
Lumen’s European Conquest
In July this year, Lumen announced that its edge computing solutions are now available in Europe. The company has said it plans to expand into further locations by the end of the year.
As a part of its roll-out in Europe, Lumen has added 100G MPLS (multiprotocol label switching) and network connectivity. Power and cooling at critical data centres in Europe have been added. Its edge computing services include network storage, private cloud, Gateway, and its Bare Metal pay-as-you-go hardware hosting service.
Lumen then announced the leasing of Grasshopper from Google in 2020. The undersea cable consists of 16 fibre pairs, enabling 350 terabits per second transfer speeds. Grasshopper is nearly 4,000 miles long, connecting Bude in the UK, Bilbao in Spain and New York in the U.S.
With the new cash unlocked from the sale of ILEC, Lumen may well be looking to apportion some of its money into its expansion across Europe.
It seems that the change of CEO from Jeff Storey to Kate Johnson has happened at a convenient juncture, as the company is looking to double down on its growth plans.
Johnson has a “track record of success”, according to Lumen, with a speciality in fuelling growth and leading companies through business and digital transformation.
In April this year, Lumen and Alianza announced a joint partnership, allowing Lumen to implement Alianza’s voice services through cloud migration.
