Dive Brief:
- Telco titan Lumen Technologies has confirmed that it is ending sales of its voice products.
- The company signaled changes to SKUs eligible for compensation in a July 1 email to partners. It has offered limited details to technology advisors and technology services distributors.
- Lumen confirmed it will honor the voice product contracts of existing customers and will pay the associated partner commissions but will “[help] them transition to solutions that better align with their evolving technology needs,” according to a statement emailed to Channel Dive. “Lumen is positioning the company for long-term growth by concentrating its investment and go-to-market focus on modern digital network services that support enterprise and public sector customers’ growing data and connectivity needs.”
Dive Insight:
Lumen has not clarified the exact nature of its new policies, leaving them subject to speculation in the partner community.
“The broader question that I have with the change is what it will mean for renewals, what it will mean for ongoing support and what it will mean for product quality,” Telarus Chief Commercial Officer Richard Murray told Channel Dive.
Fears that Lumen is turning off the services or stopping residual commissions are likely unfounded for now.
“They're not turning those products off,” GlobalNet Connect managing partner Billy Houghton said. “They're just not selling net-new, and basically once contracts hit term expiration, those clients need to move on to a competitive product or some other platform."
Despite the scarce details, Lumen’s move reflects sharpened focus on its networking business as it pays down debt and takes advantage of rising bandwidth demand in data centers driven by AI. The company is particularly bullish on its network-as-a-service offering.
“I can hardly complain about Lumen leaning into the services they're good at, because frankly, that's usually my recommendation to our suppliers: pick the three products that you're really, really good at and can be differentiated with in the market, and lean into those,” said Murray, whose company named Lumen its top vendor by revenue in 2024.
It is, however, a departure from Lumen’s old playbook. Murray said the company built a reputation for being a one-stop shop for telecommunications. Lumen, formerly known as CenturyLink, emerged from acquisitions of dozens of companies, including Quest, Embarq, Savvis, Level 3, and most recently network infrastructure company Alkira, which Lumen finished acquiring Tuesday.
CEO Kate Johnson, a former Microsoft exec who joined Lumen in 2022, rebuilt the C-suite and narrowed the company’s focus.
“Lumen always wanted to do everything, and this is an indicator of the new leadership,” Murray said.
For many TAs, Lumen pivoting away from voice is an opportunity. TAs often advise their customers to purchase from pure-play unified communications-as-a-service providers rather than through telcos. However, telco-run voice has persisted in different segments, especially the public sector.
“It's largely a perception of stability. ILECs are viewed as dependable because they've long been an established presence in the market, and competing voice providers are often seen as newer entrants that have not yet fully proven themselves." Houghton said.
The tide is turning in the market.
"Based on my experience, organizations have been steadily moving away from traditional ILECs in favor of more agile voice providers that offer modern capabilities, such as built-in DDoS resilience within their voice infrastructure,” Houghton said. “Procuring voice services through an ILEC tends to introduce an added layer of complexity that much of the competitive market has already moved beyond."
Lumen’s definition of voice is unclear. The company last year touted its opportunities as a Direct Routing partner for Microsoft Teams.
“I can only guess they are going to lean heavily into selling Teams-enabled voice. Not having an offering will cost them business and leave the door open for competitors, as they will never be able to entirely own their customers,” Tech Advisor Services Founder Barry Bazen told Channel Dive in an email.
“One thing is certain: every current Lumen voice client will become targets for every competitor in the business and don't be surprised if the base attrition rate surpasses Lumen's expectations,” Bazen said. “Huge opportunity for all competitors.”
