Lumen Technologies today hosted its 2021 Analyst Day, which covered a number of digital infrastructure topics including fiber infrastructure and edge computing. Below we highlight some of the key digital infrastructure-related takeaways from Lumen’s 2021 Analyst Day.

Fiber Infrastructure – Lumen Technologies’ Analyst Day

In this section, we discuss highlights from Lumen Technologies’ 2021 Analyst Day with a focus on dark fiber, enterprise fiber, and fixed broadband.

Dark Fiber and Enterprise Fiber

Lumen Technologies’ network has 450k route miles of fiber optic cable worldwide. Connected to the company’s network are 180k on-net buildings and fiber deployments to 2.2k+ data centers globally. Overall, the company is one of the major providers of dark fiber to hyperscale and large enterprise customers.

Metro (or Intra-City) Network Sections

Lumen Technologies has an extensive metro fiber network with significant sellable inventory. However, customer demand is variable, based on their specific applications. Therefore, the company often has to continue building-out additional fiber infrastructure to satisfy customer demand.

For example, Lumen Technologies is building new fiber for the purposes of supporting 5G, extending its enterprise building footprint, and connecting to third-party data centers.

Long-Haul and Regional (or Inter-City) Network Sections

Lumen Technologies has various dark fiber build-out projects ongoing that will add 6.2 million fiber strand miles to the company’s inter-city network.

Historically, many inter-city networks were last built in the late 1990s and early 2000s. At this time, these inter-city networks were built with 96 strand count or 144 strand count fiber cables.

However, Lumen Technologies is currently investing to meet the high-capacity needs of its network as well as demand from hyperscale customers. Therefore, the company is now installing a minimum of 288 strand count fiber cables and, on some routes, up to 866 strand count fiber cables. In turn, this allows Lumen to upgrade its own backbone network with higher capacity and lower unit costs.

Importantly, Lumen is funding a portion of this fiber network upgrade through the sale of dark fiber. Specifically, the company is capitalizing on dark fiber demand from hyperscale customers (e.g., cloud service providers).

Quantum Fiber – Fixed Broadband

Quantum Fiber is Lumen Technologies’ new brand for providing fiber-based broadband to small business and residential customers. Whereas the company’s CenturyLink brand now covers only legacy copper-based services, managed for optimal cost and efficiency.

Lumen has over 23 million households and small businesses in its footprint, which, following an infrastructure upgrade, could become fiber customers. As of year-end 2020, the company had 2.4 million fiber passings and a 28% fiber penetration rate. Additionally, in 2020, Lumen expanded its fiber footprint by 400k locations.

Fiber Infrastructure Comparison

Lumen Technologies states that fiber broadband is a superior offering to both hybrid fiber-coaxial (HFC), from the cable companies and Fixed Wireless Access (FWA), from the wireless carriers.

For example, cable companies offer asymmetrical upload and download speeds. This means that cable upload speeds are often far slower than their download speeds. In turn, this impacts the performance of applications such as file uploading, video conferencing, and online gaming.

Alternatively, fiber broadband can deliver symmetrical speeds. Indeed, Lumen thinks this will create a compelling value proposition for a large and growing part of the market.

Edge Computing – Lumen Technologies’ Analyst Day

In this section, we discuss highlights from Lumen Technologies’ 2021 Analyst Day with a focus on edge computing, which is enabled by fiber.

Edge Computing – Key Analyst Day Theme for Lumen Technologies

Lumen Technologies characterizes edge computing as the next significant growth driver for its business. Specifically, the company estimates that the total addressable market (TAM) for the edge computing business will be between $15bn to $40bn, over the next 5 years.

Firstly, edge computing helps public cloud service providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud get closer to their customers. Additionally, Lumen foresees a new “edge cloud” where network, compute, data, and application services can be delivered with ultra-low latency necessary for new use cases.

Why Does Edge Computing Exist?

Lumen Technologies posits that edge computing exists because the performance needs of all applications are not being met by the current cloud computing and data center architectures. Indeed, if the centralized cloud or data center architecture met customer’s performance needs, then there would not be a need for edge computing.

There are two aspects of performance that enterprises are focused on:

  1. Latency in their applications
  2. Bandwidth

Overall, the primary latency that enterprises are trying to control with edge computing is the latency caused by the distance that information is carried.

Positioned for Edge Computing – Lumen Technologies

Lumen Technologies owns and operates a significant amount of digital infrastructure that occupies a considerable amount of real estate. In turn, this allows the company to deploy edge computing into its networks.

However, edge data centers, on their own, only solve half of the enterprise application latency problem. Indeed, the second crucial element to ensure low-latency network connectivity is a highly-connected network.

To meet this need, Lumen’s network has extensive reach to enterprises, data centers, and hyperscale customers. Beyond this private network connectivity, the company also operates one of the largest and most interconnected internet networks globally.

Overall, Lumen Technologies allows customers to manage their applications across multiple compute locations. Specifically, these include on-premises, edge, and centralized cloud.

By using its network capabilities, the company considers itself well-positioned to deliver high-capacity and low-latency edge computing and the associated network services to customers.

Latency Targets – Lumen Technologies

Lumen Technologies’ digital infrastructure reduces the physical distance between the producer and the consumer of data. Therefore, the company is able to decrease the performance lag or latency of an application.

Lumen notes that its competitors have primarily designed their edge computing solutions to be capable of achieving latency in the 50- to 100-millisecond range. This is because 50- to 100-milliseconds is the point at which humans begin to perceive lag for performance issues.

In contrast, Lumen Technologies has designed its digital infrastructure to achieve latency of 5-milliseconds or less. Indeed, the company now reaches 85% of the United States with latency of 5-milliseconds or less. Moreover, Lumen intends to cover 95% of the country with latency of 5-milliseconds or less by the end of 2021.

Importantly, this 5-millisecond latency threshold is a requirement for the proliferation for new and innovative use cases to emerge. Specifically, these use cases include robotics in manufacturing, real-time facial recognition, machine-to-machine (M2M) interaction, complex algorithmic computing, and artificial intelligence & machine learning.

Partnerships in Edge Computing – Lumen Technologies

In April 2021, Lumen Technologies partnered with T-Mobile to leverage T-Mobile’s 5G network and Lumen’s fiber infrastructure. Specifically, this combination will help enterprises build, manage, and scale applications. Likewise, enterprises can deliver these applications across public and private spaces for opportunities like the Internet of Things (IoT).

In March 2021, Lumen Technologies partnered with IBM to integrate IBM Cloud Satellite for delivery to 180k enterprise locations. Indeed, Lumen is helping to extend IBM’s cloud to the edge of the network and thus closer to their customers. In turn, this partnership gives both IBM and Lumen customers access to IBM Cloud with ultra-low latency.

In February 2021, Lumen Technologies partnered with SAP and used its cloud management platform to host and manage SAP HANA infrastructure for businesses. As a result, software-as-a-service (SaaS) providers like SAP or unified-communications-as-a-service (UCaaS) providers like Zoom can deploy their applications with Lumen. Overall, these customers can realize the benefits of capacity, latency, security, and resilience for their end users.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group, Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), Lumen Technologies (NYSE: LUMN), Frontier Communications (NASDAQ: FYBR), Consolidated Communications (NASDAQ: CNSL), and many more. Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), fiber-to-the-premises (FTTP), and subsea cables. Jonathan has over 8 years of experience in research and writing for Fiber.


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