Lumen CFO expects up to $1.5 billion from legacy copper amid pivot to AI connectivity
As Lumen Technologies transforms from a legacy telecom company into an AI enterprise connectivity provider, it’s finding a new use for its old copper network: mining it.
Key points
- “This industry is sitting on one of the largest copper mines in the world.” Lumen plans to work with regulators and meet its service obligations as it stops marketing new copper services.
- More importantly, strategic revenue, higher-growth enterprise and fiber-based services, rose 10% to $1.28 billion, driven by AI demand and private connectivity deals.
- Lumen reported third-quarter revenue of $2.72 billion, down 12.1% year over year, largely reflecting the sale of its consumer fiber business to AT&T.
At current copper prices, Lumen expects $1 billion to $1.5 billion in pretax net proceeds from copper recovery over the next five years, Stansbury said.
“We’re now at the point in our transformation with legacy where the cash generation from revenue is actually not as good as what will be cash generation from mining the copper that’s in the ground,” Stansbury told me.
Additional details
- Lumen plans to turn off copper-based services in Iowa, Florida, Nevada and Utah, about 25% of its copper network, by the end of next year.
- “Copper is worth more to us mined than operated,” President and CFO Chris Stansbury said.
- That lets companies connect and manage their data from one place, whether it sits on Lumen’s network, another provider’s network, in the cloud, or in data centers.
- The company recently announced three initiatives involving intelligent networking, AI energy challenges, quantum connectivity, and emerging security threats.
- The challenge will be sustaining that growth while replacing the revenue and cash of its legacy business.
How this summary was made: extractive summary — built from the sources' own reporting. It is drawn only from the reporting of the sources listed below — read the originals for full detail. How we summarize →
Advertisement
Every article behind this summary — 1 article from 1 outlet
Get stories like this in your inbox.
Subscribe — it's freeOne free email at 6am — your topics, deduplicated, five minutes. No account, no paywall.