Lumen Technologies, Inc. (LUMN) Citi's 2024 Global TMT Conference (Transcript)

Core Viewpoint - Lumen Technologies is focused on transforming the enterprise telecom space by investing in innovative solutions that leverage their extensive network to support the growing demands of AI and digital services [3][19]. Company Strategy - The company aims to capitalize on the lack of innovation in the telecom sector, positioning itself to provide high-speed, low-latency connectivity essential for AI and cloud services [3][19]. - Lumen has secured $5 billion in contracts with over 10 customers, primarily hyperscalers, to support the AI ecosystem, indicating strong demand for its services [8][25]. Financial Performance - Approximately 60% of Lumen's revenue is derived from declining legacy services, with a focus on transitioning to growth areas such as dark fiber and digital services [5][6]. - The company has invested in 6 million fiber miles, with plans for an additional 6 million, to enhance its network capabilities [6]. Market Opportunities - Lumen identifies a total addressable market (TAM) of at least $50 billion related to connectivity for AI, with three phases of growth: training, inference, and machine-to-machine communication [7][19]. - The public sector is highlighted as a growth area, with significant contracts already in place, such as with USDA and USPS [11]. Operational Efficiency - The company is working to unify its four legacy networks, which is expected to drive down operational costs and improve service delivery [15][32]. - Lumen's conduit-based infrastructure allows for rapid deployment of fiber without extensive digging, enhancing scalability and efficiency [8][9]. Customer Engagement - Lumen is enhancing its partner ecosystem to improve sales in mid-market segments, recognizing the need for a more efficient sales approach [20][21]. - The company is focused on improving customer experience and reducing technical debt to drive better financial outcomes [17][18]. Future Outlook - Lumen anticipates a recovery in EBITDA by 2026, with revenue growth expected to follow thereafter as legacy declines stabilize [18]. - The company is optimistic about its ability to execute on the $7 billion opportunity, with strong demand for its services continuing [11][19].