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HomeTechnologyCenturyLink selling copper network in 20 states instead of installing fiber

CenturyLink selling copper network in 20 states instead of installing fiber

Enlarge / A CenturyLink service van parked in Santa Fe, New Mexico, May 2, 2019.

CenturyLink selling copper network in 20 states instead of installing fiber

CenturyLink sells much of its copper network in 20 states to a private equity firm, leaving the telephone company to withdraw from rural areas where it does not plan to install fiber optic technology to the home. CenturyLink has agreed to sell the networks for $ 7.5 billion to Apollo Funds, a private equity fund operated by Apollo Global Management. Apollo will also withdraw $ 1.4 billion in debt from CenturyLink.

As part of the deal slated to close in the second half of 2022, Apollo will acquire the CenturyLink ILEC (incumbent local services operator) business in all 20 states, including “customers and consumer assets, small businesses, wholesalers and primarily businesses served by copper, “a press release said yesterday. Networks awaiting sale reach seven million homes and businesses, but only have 200,000 fiber deployments optical to the premises.

CenturyLink said it will maintain its ILEC networks in 16 states where it has 2.4 million fiber-to-premises deployments across 21 million homes and businesses, saying these networks have a “significant overlap” with its “business and fiber up-the-home building opportunities.”

CenturyLink recently rebranded itself as “Lumen”, but still uses the CenturyLink brand name for residential and small business customers while using the Lumen brand for corporate customers.

Houses languish on old copper lines

In a conference call with investors, Lumen CEO Jeff Storey said that 70% of the markets that Lumen will keep in the deal are in urban and suburban areas and these are the types of markets in which Lumen was most likely to invest in modernization. broadband service to its fiber-based offering known as Quantum, ”Telecompetitor wrote.

In states where CenturyLink networks are sold, Storey said, “we knew we were unlikely to prioritize investments in these markets ahead of our other opportunities in enterprise and quantum fiber.” The networks subject to the pending sale have 1.3 million CenturyLink Internet subscribers, almost all copper DSL. About 59,000 of these subscribers are on fiber.

Apollo will also serve CenturyLink landline customers. CenturyLink stopped reporting telephone subscribers a few years ago, but the company had 10.3 million telephone access lines at the end of 2017. More recently, the “voice and other” category represented $ 518 million of the company’s $ 1.4 billion mass-market category revenue in the second quarter of 2021. Including the residential and commercial segments, the company’s voice services generated $ 1.5 billion on a total of $ 4.9 billion in quarterly revenue. The remainder comes from consumer broadband, enterprise IP and data services, compute and application services, and fiber infrastructure services.

Where are the networks

The networks sold operate under the CenturyLink name and are located in Alabama, Arkansas, Georgia, Illinois, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Wisconsin.

CenturyLink / Lumen operates both ILECs and CLECs (Competitive Local Exchange Carriers), the latter generally leasing lines to incumbents rather than deploying theirs. The Company will retain CLECs in the 36 states in which it operates and will retain ILECs in Arizona, Colorado, Florida, Idaho, Iowa, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. CenturyLink / Lumen “will retain 3.4 million broadband subscribers, including 687,000 fiber subscribers,” Telecompetitor wrote.

Apollo promises fiber upgrades

The sale could continue a long-term trend where DSL customers in rural areas are denied fiber upgrades while old copper networks fall into disrepair. CenturyLink is unlikely to upgrade the networks it has already agreed to sell, but will continue to operate them for another year. The extent of the fiber deployment that Apollo will undertake is unclear, but the company said the company’s investment “will help accelerate the upgrade to fiber-optic technologies, bringing service Faster and more reliable internet to many rural markets traditionally underserved by broadband providers, while providing best-in-class customer service. ”

CenturyLink / Lumen has focused more on serving large enterprises in recent years, a strategy fueled in part by its 2017 acquisition of Level 3.




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