As other service providers sell and acquire more last-mile broadband assets, questions about Lumen’s dedication to its Mass Markets division that runs its fiber-to-the-home (FTTH) broadband business continue to swirl.
Chris Stansbury, CFO of Lumen, told investors during its fourth-quarter earnings call that in terms of asset sales, the company will continue to look at all of its properties.
“What I would say about the Mass Markets business is it is a valuable asset,” he said. “That's why we're continuing to invest at the pace we're at right now, getting more fiber in the ground, and pushing hard to drive subscriber growth.”
He added that while the company foresees more consumer last-mile asset sales, Lumen has yet to make any immediate plans to acquire other providers. “We've been very public about saying that's a space where consolidation is necessary, and we will not be the consolidator,” Stansbury said.
Splitting Mass Markets, Enterprise?
Questions about the future of Lumen’s consumer broadband business come as fellow telco peers Consolidated and Frontier have been making moves.
Consolidated Communications has cleared the next hurdle in becoming a private company as the provider’s shareholders approved Searchlight and BCI’s acquisition proposal.
Meanwhile, Frontier named telecom M&A specialist Woody Young to its Board of Directors as the telco begins a strategic review of its business.
While Lumen did not address specific deals or companies, Stansbury said it isn’t interested in making a quick buck on selling off an asset. “As it relates to a potential split of the Mass Market and Enterprise, what I want to emphasize is, we're not looking to fire sale any assets,” he said. “We're investing in good assets to make them great. And that's our focus because that's how we see the path to maximizing value as we go forward.”
He added, “We've got a dedicated group of people who are very focused on the Quantum Fiber build-out and the great customer experience that it brings, and we're going to continue on that path.”
Fiber expansion continues
Amidst quarterly declines, Lumen continued expanding its fiber broadband network during the fourth quarter, adding 126,000 new fiber locations. This brings its total to approximately 3.7 million as of December 31.
While Mass Markets' revenue declined 8.3% year-over-year, Mass Markets' fiber broadband revenue grew 11.5% and represented about one-third of Mass Markets' broadband revenue.
The telco also added 20,000 Quantum Fiber customers, ending the fourth quarter with 916,000. Total consumer broadband Mass Market's total broadband subscribers were 2.76 million, down from 2.84 million in the third quarter.
“In Mass Markets, we delivered our commitment to grow our fiber network by more than 500,000 locations and intend to maintain that similar robust rate in 2024,” Stansbury said.