Lumen’s Alkira Deal Is About a Faster Path to Services
For decades, there has been endless debate in the telecom industry about how service providers can transform their infrastructure to be more nimble and provide more services—or as they say, to be more than a “dumb pipe.” Lumen’s proposed acquisition of Alkira is big move to solve several perennial telco challenges and goals.
Lumen on Wednesday proposed a $475 million all-cash deal for Alkira, which is expected to close in the third quarter, to "accelerate Lumen’s vision of a programmable network with a single control plane," according to the Denver-based service provider. Alkira, founded by brothers Amir and Atif Khan of Juniper Networks and Viptela (acquired by Cisco) fame, has been on the Futuriom 50 list of top private infrastructure companies for several years.
The initial reaction from Lumen shareholders is one of skepticism, with Lumen shares falling nearly 13% today. But this is a strategic deal that will take years to play out. The deal is concurrent with Lumen’s earnings, which include refinancing with a $1 billion debt offering. Lumen’s business revenue declined 3% y/y, but management said that “strategic business revenue” rose 51%.
Let's explore more about this and why such a bold move was needed.
Solving for Dumb Pipes
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