- Lumen sees potential to tap into the $47B cloud voice market
- The company unveiled a new set of cloud-managed products that can be accessed via a single device
- No comment on rumors of a potential Mass Markets sale, but Lumen didn’t exactly rule it out
Despite living in an increasingly cloud-connected world, many enterprises still use clunky legacy voice services. But Lumen sees an opportunity to help them change that.
Speaking on the company’s Q1 2025 earnings call, CEO Kate Johnson said the recently-launched Lumen Cloud Communications (LCC) platform offers Lumen “a clear way to win” in the $47 billion and growing cloud voice market.
What LCC does is provide Lumen’s legacy voice enterprise customers a “clear migration path” while reducing the operator's churn, she said. The platform is built on an IP network that is much less expensive than legacy Plain Old Telephone Lines (POTS) infrastructure, Johnson added, and therefore is “well suited for the demands of the remote hybrid workforce.”
“Voice has shifted to an API-driven, AI-infused, data-rich, services-oriented market,” she said, which can create high-value opportunities like “specialty lines for fire alarms and security systems.”
The push to cloudify voice services comes as the U.S. government accelerates its copper retirement policy. The regulatory shift affects not only operator phone lines but also businesses that still rely on copper for essential systems, such as healthcare and security.
Lumen’s cloud voice platform is currently available as a “limited offering." But the company eventually plans to add features like Microsoft Teams Direct Routing, contact center as-a-service integrations, agentic AI capabilities and more.
Riding the connectivity fabric
But that's not all Lumen is doing with the cloud. Johnson also unveiled a new set of network services, dubbed Lumen Connectivity Fabric (LCF), that can all be remotely managed via the cloud. LCF is NOT to be confused with Lumen’s Private Connectivity Fabric, through which the company supplies private fiber connectivity between data centers, edge locations and the like.
According to Johnson, LCF will provide services related to connectivity (like Ethernet and Lumen’s NaaS platform), communications, infrastructure, security and even media and entertainment. Customers can access it all via Lumen’s “fabric port,” a physical device that can support “thousands of services per single port.”
“Lumen’s business model is no longer bounded by the traditional, friction-filled limitations of telecom’s physical infrastructure and analog business processes,” she said.
On the private connectivity front, Johnson said Lumen is “progressing nicely” with its $8.5 billion in PCF contracts. Multiple in-line amplifier (ILA) sites are under construction and the company began deploying Corning 864-count fiber on several routes. Lumen last year struck a deal with the vendor, reserving 10% of Corning's global fiber capacity for the next two years to address booming AI-related demand.
Despite uncertainties related to tariffs and the overall macro environment, Lumen still sees healthy PCF demand “at both the large deal level, as well as at the smaller enterprise deal level.”
Curious about consumer fiber
Lumen of course declined to comment on rumors that it may sell off its Mass Markets business to AT&T. However, CFO Chris Stansbury didn’t rule out the possibility of a deal either.
“We have been consistent in saying that we are proud of the consumer fiber platform we have built, but the investment and return profile are not consistent with our desire to focus on the enterprise connectivity and services market,” he said.
Stansbury did note fiber broadband revenue of $209 million increased nearly 23% year-over-year and now represents 45% of Lumen’s Mass Market revenue.
News of a deal may not come for quite some time, as New Street Research analysts think Lumen is trying to figure out an agreement that works best.
“It certainly hasn’t collapsed, or management would have to disclose as much,” said NSR’s Jonathan Chaplin in a note. “It is more likely that the structure Lumen is pursuing is incredibly complex and takes time to iron out.”