What are the details of the Lumen/Brightspeed transaction?
Lumen announced it has closed the sale of the part of its incumbent local exchange carrier (ILEC) business that serves consumers, small businesses, wholesale, local enterprises and government entities in 20 Midwest and Southeast states, and parts of NJ and PA, as follows:
Alabama, Arkansas, Georgia, Illinois, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and parts of Wisconsin.
Lumen retains its local incumbent network and assets in 16 states including:
Arizona, Colorado, Florida, Idaho, Iowa, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.
Lumen also retains its national fiber routes and competitive local exchange carrier (CLEC) networks in all 36 states.
The transaction provides Brightspeed with a robust, scaled local network, along with the operations and back-office support to meet the accelerating demand for high-bandwidth connectivity and fiber technology.
Who is Brightspeed?
Brightspeed is a dynamic new company comprised of industry leaders committed to enhancing the service experience for new and existing customers and to create a next-generation telecom and connectivity business. Brightspeed currently plans to invest at least $2 billion to build a network that will bring faster, more reliable Internet and Wi-Fi to communities throughout the Midwest, Southeast, and certain parts of Pennsylvania and New Jersey. At closing Brightspeed is comprised of the incumbent local exchange carrier (ILEC) assets and associated former operations of Lumen Technologies across 20 states and is owned by funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO).
Why is Lumen selling these assets in 20 states? How does it benefit customers?
Lumen will continue to make strategic network investments that strengthen the platform and our ability to meet the needs of both enterprise and mass markets customers in growth markets globally. We retained the national routes and CLEC networks that help us deliver on our value proposition of providing the fastest, most-secure platform for next-gen business applications and data.
Selling these assets to Brightspeed’s parent company at such an attractive valuation allows us to focus on driving growth in our core enterprise business, strengthen our national fiber network and accelerate investments in our retained Quantum Fiber markets with more fiber to the home. In addition, customers within the acquired markets will benefit as Brightspeed can pursue its own fiber deployment plans.
This deal allows us to focus on investments in Lumen’s most attractive markets where we see an opportunity to drive growth. By streamlining our asset portfolio, we will be positioned to execute on our plans to provide attractive returns for our stakeholders.
The Lumen platform enables enterprise customers to use Lumen’s data, cloud edge, security, and voice and collaboration capabilities. As we drive platform investments for greater growth, the Brightspeed transaction will help accelerate Lumen’s go-to-market strategies for digital products and services and enable us to provide an industry-leading customer experience.
In what states will you continue to offer internet services to consumers?
We continue to offer residential broadband services in Arizona, Colorado, Florida, Idaho, Iowa, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.
Will customers in the 20 impacted states now be served by Brightspeed?
Customers served by the Lumen ILEC network transitioned to Brightspeed when the transaction closed. We still have competitive local exchange carrier (CLEC) customers in these 20 states.
What happens to Quantum Fiber?
The sale allows us to increase our level of current fiber investments and expand the Quantum Fiber footprint where we see positive momentum around growing our customer base and providing a differentiated customer experience. We offer Quantum Fiber internet services in the 16 states we continue to serve. Quantum Fiber customers in Springfield, Mo., or any other ILEC market are now served by Brightspeed.
What are the high-level benefits of this transaction for consumers in the impacted states
We believe this transaction will be positive for consumers in the impacted states as Brightspeed pursues its own fiber deployment plans and invests in bringing faster and more reliable internet service to many rural markets.