Lumen Offloads CDN Services To Akamai As Provider Sharpens Focus On NaaS, Fiber
The telecom giant says that as part of its ‘transformation’ it will wind down its content delivery services as it adjusts its concentration more firmly on growing through strategic IT services such as NaaS, SASE and fiber.
Lumen Technologies, formerly CenturyLink, has sold off select Content Delivery Network (CDN) service contracts to Akamai Technologies, the companies said Tuesday.
The service provider has spent the past two years exiting or winding down specific businesses as it carries out its plan to focus on more strategic IT services such as Network as a Service (NaaS), Secure Access Service Edge (SASE) and fiber.
“We are deep into our transformation of Lumen and much of our core work involves simplification of our business,” said Bob McCarthy, senior vice president of business development, on the deal. “The sale of select Lumen CDN service contracts enables us to apply even more focus on disrupting the telecommunications industry by cloudifying our network, enhancing our Quantum Fiber offering and bringing amazing new solutions to market.”
Via the terms of the deal, Lumen and cloud, security and CDN specialist Akamai will operate under a transition services agreement for 90 days after which Lumen said it plans to “wind down” its content delivery services. The company said that customers can immediately begin working with Akamai for all their CDN needs.
A spokesperson for Lumen told CRN that in some cases, Lumen CDN is sold through its channel partners.
“Reseller contracts are treated similarly to [the CDN] contracts referenced in the release. Lumen maintains relationships with our master agents and indirect partners, and we are working with them closely in the migration of their customers to Akamai,” the spokesperson said.
Monroe, La.-based Lumen has prided itself on being a legacy network provider. But the company is turning its attention even more to strategic IT services and the adjacent technology conversations that can be enabled by a strong network, Sara Seegers, Lumen’s channel chief, told CRN in September.
Lumen in 2022 retooled its business segment to focus on growth products. The company broke it down to three categories: The “Grow” segment, which includes strategic services such as SASE, security, cloud and UC collaboration services. The “Nurture” category includes VPN Data Networks and Ethernet services, and the “Harvest” segment houses the carrier’s legacy services, including voice.
During its most recent fiscal quarter, the company said it was seeing early traction in some of its growth areas, including NaaS and fiber. During second-quarter 2023, the Grow category pulled in $1.14 billion during the quarter compared with $1.13 billion a year ago.
The telecom giant earlier this year dubbed 2023 as its “reset year” as the company makes ambitious moves to grow by divestiture while making internal investments, said Lumen President and CEO Kate Johnson in February.
The company in 2022 unveiled an exclusive arrangement for the proposed sale of its EMEA business to Colt Technology Services for $1.8 billion. Last year, Lumen finalized the $7.5 billion sale of its incumbent local exchange carrier (ILEC) business, which included its consumer, small business, wholesale and mostly copper-served enterprise customers and assets in 20 states to Brightspeed, a brand-new company that launched its operations last fall. The company also in 2022 closed the sale of its Latin American business to investment firm Stonepeak for $2.7 billion.
In second-quarter 2023 which ended June 30, Lumen reported total revenue of $3.66 billion, which represented a decline of 20.6 percent compared with $4.61 billion in the year-ago period. The company attributed about 72 percent of its revenue declines to post-closing commercial agreements and lingering results of its divestitures.
Lumen is set to report its third-quarter 2023 earnings Oct. 31.