Lumen Technologies (NYSE:LUMN) Chief Executive Officer Kate Johnson said the company is positioning its network and software capabilities around enterprise demand for artificial intelligence, arguing that customers increasingly need to move data among buildings, cloud platforms, data centers and edge locations in real time.
Speaking with Citi communications and infrastructure analyst Mike Rollins, Johnson described Lumen’s strategy as creating an “enterprise networking for AI” platform. She said the offering combines a large physical network, a programmable digital layer and a connected ecosystem of cloud providers, technology companies, data centers and other network endpoints.
Programmable Network and Consumption Model
Johnson said a programmable network allows customers to view and manage network circuits, bandwidth, performance and security through a “single pane of glass,” rather than requiring physical interventions. Customers can provision services, adjust bandwidth and security settings, and control the routing and flow of data remotely, she said.
She contrasted that approach with traditional telecommunications models built around point-to-point, static circuits with fixed monthly billing. Lumen is instead pursuing on-demand and consumption-based services, Johnson said, which she described as better suited to AI-related data flows that are not predictable in advance.
The company has also developed cloud on-ramps that connect directly to cloud providers rather than using traditional colocation facilities, according to Johnson. She said the architecture can bypass colocation fees while providing higher capacity, improved security and lower costs.
Another example involves centralized security policy management. Johnson said Lumen’s platform can allow companies to manage policies through a centrally provisioned cloud service rather than across hundreds or thousands of locally managed firewalls. She said the approach can reduce hardware spending for customers and enable faster deployment of services.
Physical Network Still Supports Strategy
While Johnson said Lumen’s software capabilities allow it to operate across other providers’ fiber networks, she maintained that the company’s own physical network remains an important asset, particularly in North America. Lumen can use its network to create cloud on-ramps and support its Lumen Multi-Cloud Gateway offering, she said.
Johnson said Lumen had 12 million fiber miles when she joined the company and expects to have 58 million fiber miles by the end of 2031. The added capacity is intended to serve hyperscalers, while a significant portion is reserved for Lumen’s enterprise business, she said.
She also said Lumen expects a network composition similar to its traditional business, where customer access is supplied through a mix of Lumen-owned infrastructure and third-party networks. Johnson cited a large financial institution that standardized on Lumen Fabric while operating on AT&T fiber, illustrating Lumen’s ability to provide its platform independently of the underlying carrier.
Financial Roadmap and PCF Deals
Johnson said Lumen remains on schedule in its multiyear plan to stabilize free cash flow, generate EBITDA growth in 2026 and return its business segment to positive revenue growth in 2028.
She said the company’s previously disclosed $13 billion in private connectivity fabric, or PCF, contract value helped provide the financial flexibility to recapitalize and simplify its corporate structure. Johnson said Lumen does not include future PCF business in its long-range plans because such deals can be uneven and are not required to fund future growth.
Future PCF opportunities must meet margin criteria, she said. Lumen is generally not pursuing new construction projects but may pursue “over pulls” through existing conduit where the economics are accretive. Johnson said the company is seeking a greater mix of digital services that can support margin expansion.
Johnson also said the cash and ecosystem relationships generated by the initial PCF activity helped Lumen introduce Network-as-a-Service, develop cloud on-ramps with hyperscalers, launch Lumen Multi-Cloud Gateway and acquire orchestration platform Alkira.
Alkira and Existing DIA Base
Johnson said the Alkira acquisition expanded Lumen’s ability to orchestrate data movement across clouds, cores, data centers, edge sites and buildings. She said the platform provides access to what she described as a $47 billion total addressable market and expands Lumen’s international reach because it is carrier- and cloud-agnostic.
The company also sees an opportunity in its existing Dedicated Internet Access, or DIA, customer base. Johnson said Lumen has more than $1 billion of DIA revenue and tens of thousands—potentially more than 100,000—ports at customer locations.
Through its platform, customers can digitally manage certain existing DIA ports and potentially convert them into Lumen Fabric ports, she said. Those ports can carry multiple services, support higher bandwidth and add orchestration features. Johnson said services sold on top of existing infrastructure can carry an 80% margin.
Johnson said strategic revenue represented 53% of Lumen’s total revenue and grew 14% year over year in the last quarter. She said the category includes some PCF revenue as well as digital services, wavelength services and DIA. Lumen is also looking to reduce costs associated with lower-quality legacy revenue by decommissioning applications and networks, reducing copper-related investments and lowering capital expenditures in that business.
Ultimately, Johnson said Lumen’s goal is to become an enterprise networking platform for AI while delivering growth for shareholders through customer value and higher-quality digital revenue.
About Lumen Technologies (NYSE:LUMN)
Lumen Technologies, Inc (NYSE: LUMN) is a communications and technology company that provides connectivity, networking and digital services to businesses, government organizations and other institutions. Its offerings include fiber-based internet access, wide-area networking, ethernet, software-defined networking, managed network services, cloud connectivity, cybersecurity and unified communications.
The company operates one of the largest fiber networks in the United States and also provides international connectivity through its global network infrastructure.
