Lumen expects to pick up its fiber build pace in 2024

Lumen Technologies is hoping to grease the wheels on its fiber build in 2023 after pressing pause on its work late last year and is aiming to exit the year having achieved a quarterly build pace that will allow it to exceed 500,000 new passings in 2024.

The operator was originally planning to reach 1.5 million to 2 million locations this year as part of a plan to expand its footprint to 12 million locations over the coming years. But last month Lumen slashed its overall target to between 8 million and 10 million locations and said it would only reach 500,000 new locations this year.

Maxine Moreau, president of Lumen’s Mass Markets business, said during a New Street Research conference this week the reduction in its target was not only designed to ensure better quality passings, but also to account for the higher build costs it began to see in 2022.

Work on its fiber expansion has now resumed and Moreau said the operator is already seeing improvements in unit yields from its construction division. It has also made headway in a battle against long permitting processes and contractor capacity constraints which previously hampered its build pace.

Going through 2023, Moreau said she expects Lumen’s build pace will accelerate each quarter. She added it expects “2024 to be a higher build enablement year than 2023,” though did not provide a concrete target for next year. The company plans to share more information about its three-year outlook during an investor day event in June, she said.

What overbuild?

Despite concerns that rivals might seize on Lumen’s slowdown to beat it to the punch with fiber, Moreau said the operator is actually not seeing too much overbuild activity in its core target markets. While she acknowledged there was activity in smaller markets, she argued Lumen has bigger fish to fry.

“We’re deploying a market-based approach in the major markets like Seattle, Portland, Phoenix, Salt Lake City, Minneapolis, Denver, several others. We are not going to pull resources away from those markets to compete with sub-scale overbuilders in smaller markets. We have a great deal of confidence in our approach and we’re sticking to our plan,” she concluded.