Lumen Technologies turned on 400 Gb/s (400G) connectivity in more than a dozen markets that allows faster speeds for customers to access third-party applications and cloud on-ramps, a move that furthers the operator’s push toward embedded connectivity support for growing AI services.

The new 400G speeds are available through Lumen’s Ethernet On-Demand, Internet On-Demand, E-Line point-to-point Ethernet, E-LAN multipoint-to-multipoint Ethernet, and E-Access services. They are available in a number of large markets, including Atlanta, Chicago, Dallas, Denver, Kansas City, Las Vegas, Los Angeles, Minneapolis, New York City, Phoenix, Seattle, and a handful of others.

Jeff Ary, VP of product management at Lumen, explained that those combinations offer customers flexibility in selecting how they consume the new capabilities, including through Lumen’s network-as-a-service (NaaS) model.

“We have customers that still want a one-year term in a fixed amount that they pay monthly. We have others that are really liking the NaaS, where they can turn it up, turn it down. But this supports all those customers, whether they want fixed bandwidth speed, fixed monthly amount, or if they want fixed and be able to increase and decrease through our NaaS portfolio, it'll support that also," Ary said.

Ary explained that the move builds on Lumen’s agreement last year with Corning to secure 10% of that vendor’s global fiber production capacity over the next two years. “That helped us optimize how we run our optical network,” Ary said, and helped push Lumen’s 400G network reach to more than 90,000 route miles.

“That enabled us to put our layer-two network on top of that, to have up to 400-gig on our Ethernet network, which then, of course, helps our IP network as well,” Ary added.

Lumen’s latest expansion is just “phase one” of what the VP said would be ongoing geographical and technology updates to the network.

“We've seen such an increase in our 400-gig consumption that I don't think it'll be long before 800-gig,” Ary said, adding that “phase two is underway, and once we get our arms around that there'll be a phase three because of the expansion of data centers and the continued growth there.”

Big AI bet

The bolstered network capacity also builds on Lumen’s big AI bet. The company last year announced AI-related plans with the market’s largest hyperscalers, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP).

Lumen CTO Dave Ward previously told SDxCentral that those large customers were bracing for a surge in data center usage, which will require a bolstered network architecture.

“There's so many capacity constraints associated with constructing AI: power, literally power from the grid, and then where you can place your data center, can you get the GPUs?” Ward said. “This network capacity is a very scarce resource, in particular to where the data centers or AI data centers are being built.”

Lumen also recently bolstered that AI push by adding former Microsoft AI executive Sean Alexander to its ranks as SVP of Connected Ecosystems. Alexander in that role will help build and scale Lumen’s business development team targeted at strategic partnerships and creating new revenue streams.

Alexander’s hire followed Lumen poaching Salesforce sales SVP Rob Popovic to take on the same title for large enterprise sales.

Lumen NaaS continues to hum

Lumen’s growing AI focus has not hindered its legacy NaaS business, which recently surpassed a four-figure customer milestone. That NaaS service, which was launched in 2023, is now serving more than 1,000 customers and is a substantial increase from the 400 customers reported late last year.

CEO Kate Johnson told investors during Lumen’s most recent earnings call that the company’s NaaS platform connects into the three largest cloud service providers and more than 1,500 data centers across the U.S. Johnson had previously lauded the NaaS offering for taking business from data center companies but also in helping to drive more business to Lumen’s cloud service provider partners.

That former disruption is based on Lumen being able to tie together its physical and virtual infrastructure in a package that makes it easier for enterprises to manage their data connectivity. The latter is in turning that easier management into more direct traffic-generating opportunities for hyperscalers like AWS, Microsoft Azure, and GCP.

“And when I say higher, like it's an incredible rate,” Johnson teased of that interest. “I don't want to give it right now, but over the past 90 days, very, very significant growth. And what that suggests is that there's a faster path to revenue for the cloud companies, partnering with Lumen to provide networking for their end customers.”

Ary noted the latest network updates will feed that momentum.

“Our NaaS portfolio will continue to grow,” Ary said. “We'll have more and more offers there. We're going to have some additional offers on our NaaS portfolio later this year and then on into next year.”

Enterprise focus shines brighter

The new enterprise-focused offerings also highlight Lumen’s recent move to ditch its consumer business, selling those assets to AT&T for $5.75 billion. The sale includes a network spanning more than 4 million locations across 11 states and serving approximately 1 million customers.

That deal completed vocal plans to exit the consumer fiber business.

“We've been very consistent in saying we're proud of the consumer fiber platform we've built, but the investment and return profile are not consistent with our desire to focus on the enterprise connectivity and services market,” CFO Chris Stansbury noted during Lumen’s earnings call earlier this year in regards to rumors about that exit.

Stansbury during a later investor conference frankly added that Lumen did not “have a right to win” in the consumer FTTH space.

“I don't think there's any disagreement that that market is moving to one of convergence where the sale of wireless, as well as fiber to the home in that bundle, allows a strategic buyer, if you will, to drive more enablements, more penetration, less churn, more stable pricing,” Stansbury said. “It's just an economic scenario that Lumen couldn't deliver without that wireless offering. And our footprint is really valuable.”

That value was a significant driver for Lumen.

Stansbury told that investor conference audience that a potential sale of its consumer fiber business would “fundamentally change the financial landscape for Lumen, because it would allow us to, at close, eliminate 25% of our debt. It would mean very little loss in EBITDA [earnings before interest, taxes, depreciation, and amortization] because our fiber business today is in investment mode to drive penetration. And it would mean that we walk away from a continued investment of a billion dollars a year in the consumer business.”