Lumen closes $7.5B ILEC sale to Brightspeed

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Lumen’s attention now turns to reaching ‘more customers with maximum efficiency,’ said the CEO

Lumen Technologies on Monday announced that it’s closed its $7.5 billion sale of its Incumbent Local Exchange Carrier (ILEC) business operating in 20 states to Brightspeed. 

With the Brightspeed sale behind it, Lumen can focus investments and engineering in businesses with stronger growth opportunities, “including investments in markets where we can concentrate our resources to reach more customers with maximum efficiency,” said Jeff Storey, Lumen president and CEO.

Lumen first announced plans in August 2021 to sell its CenturyLink assets in 20 states to Apollo Global for $7.5 billion. Under the terms of the deal, Lumen retained 687,000 CenturyLink fiber subscribers and assets in 16 states; Apollo obtained assets in 20 states, mostly in the U.S. Midwest and Southeast, and 59,000 fiber subscribers. 

Brightspeed is based out of Charlotte, North Carolina. Apollo created Brightspeed in November 2021 to further its telecom ambitions. In October 2020, the private equity firm acquired a telecommunications platform owned by Lendlease, then in May 2021, it purchased Verizon’s media assets for $5 billion. Shortly before announcing the Lumen deal, Apollo invested $200 million in Utah-based carrier FirstDigital Telecom. 

In June, Brightspeed announced that it had received regulatory approval from state governments in all 20 states where it planned to operate fiber services after the Lumen deal. Brightspeed said it will invest more than $2 billion over the next five years to connect up to three million new homes and businesses to fiber broadband connections, “including in many rural and suburban locations where fiber and advanced technology have not yet been deployed.”

The U.S. Federal Communications Commission (FCC) approved Lumen’s sale to Brightspeed in August 2022. At the time of the approval, Tom Dailey, Brightspeed’s VP of public policy and government affairs, said the effort would help “close the digital divide in communities across the country that are most in need of high-quality broadband.”

When it comes to reaching more customers with maximum efficiency, as Storey said, Lumen announced in July that its enterprise edge computing solutions are available in Europe. The company claims 5 millisecond (ms) latency for 70% of enterprise demand in the UK, France, Germany, Belgium and the Netherlands. Lumen said it has plans to expand to additional locations by the end of 2022.

To build out the European deployment, the company activated an additional 100G multiprotocol label switching (MPLS) and IP network connectivity. Lumen also boosted power and cooling at key edge data center locations in Europe, it said. Lumen’s edge computing services include Bare Metal, a pay-as-you-go dedicated hardware hosting service designed for single-tenant systems and protected data environments; Network Storage, which promises fast, scalable, and secure network storage for both enterprises and public sector organizations; Private Cloud, which provides pre-built infrastructure suited for high-performance private cloud computing applications; and Gateway, Lumen’s Multi-Access Edge Compute (MEC) platform intended for on-premises use.

In September, Lumen announced a capacity increase, in the form of a fiber pair it’s leasing from Google between Bude, in the United Kingdom, and New York City. It’s part of Grace Hopper, a subsea cable system touted by Google Cloud as part of its increasing global network of undersea cabling. The company announced Grace Hopper in 2020 with provisioning at some point in the future; news reports this week confirmed that Grace Hopper went live and began carrying traffic in late September. Grace Hopper comprises 16 fiber pairs, supporting 350 Terabits per second (Tbps) transfer speeds over an almost 4,000-mile span straight across the floor of the Atlantic Ocean, interconnecting Bude, New York, and Bilbao, Spain.

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