Lumen Technologies, Inc. (NYSE:LUMN) Citi’s 2023 Communications, Media & Entertainment Conference January 5, 2022 10:00 AM ET
Company Participants
Kate Johnson – President and Chief Executive Officer
Conference Call Participants
Mike Rollins – Citi
Mike Rollins
Well, good morning. And for those joining us on the webcast welcome back to Citi’s 2023 Communications, Media & Entertainment Conference. For those of you I haven’t met, I’m Mike Rollins, and I cover Communication Services & Infrastructure for Citi Research. Before we get started, I’d like to mention that we have disclosures available at the registration desk and on the Citi Velocity page, from which you’re streaming the audio. We also like to incorporate your questions in today’s discussion. If you’re here with us, we’ll have a mic towards the end of the session.
And if you’re streaming this connection, there’s a question box on your screen, and you could enter your questions that way. And we’re going to continue the tradition of live audience surveys that are completely anonymous, and can be accessed on the Live Polling Q&A section of the streaming site, as well as through your connected devices here, live. And the QR codes are around us, and please login and submit your requests that way.
So, with all those details out of the way, I’d like to welcome Kate Johnson, President and CEO of Lumen. Kate, thank you so much for joining us today.
Kate Johnson
Thanks for having me. It’s great to be here. And, by the way, can I throw in a little in case we do anything that’s talking about forward-looking statement?
Mike Rollins
Please.
Kate Johnson
I’d like to remind everybody to go to our IR page and look at our Safe Harbor language there just to keep this in check.
Mike Rollins
Great. Well, with all those details out of the way, so you’ve been at the company now for two months?
Kate Johnson
Yes, if you count Christmas and Thanksgiving.
Question-and-Answer Session
Q – Mike Rollins
So, with that, can you share with us why you took the job at Lumen, and what have been the surprises, the positives, the challenges you’ve experienced since you’ve taken the helm?
Kate Johnson
Sure. Well, I’ll really start with there haven’t really been many surprises when you go through a selection process, like the one I went through with the Board, you learn a lot about the company throughout. And the people are great, the assets are great. We have a huge opportunity, but there’s a challenging road ahead; we’ve got a lot of work to do. Why I took the job? All the reasons I just talk about, right? The people are great, the assets are great, and I kind of thrive in the challenging world driving digital transformation and leading people through change; that’s what I’ve been doing for a couple decades. And I just love it, so I’m excited to be here.
Mike Rollins
Great. Well, and thank you for being here to share some of your initial perspectives on the go-forward plan for Lumen. We’re going to get our first live survey out there for our audience, and we’ll come back to it in a few minutes.
Kate Johnson
Okay.
Mike Rollins
But the question that we’re asking our audience is what is the best way Lumen can create value over a three-year horizon? And we came up with six choices, I don’t know if it’s the full compliment of options that are out there. But one would be investing in product marketing for the business segment. Two, would be accelerating the fiber investments for the mass market footprint, separating the assets between ILEC and business or fiber infrastructure from within business, pursuing partnerships or mergers to expand product and distribution, reducing net debt leverage more quickly and aggressively reducing expenses. So, we’ll come back to that as the audience has time to decide what they think the best way is.
Kate Johnson
That’s great, we’re crowdsourcing my strategic plan, thank you.
Mike Rollins
Happy to help. So, what are the big strategic decisions that need to be made as you’ve entered into this New Year and you’re looking to reshape Lumen with the management team?
Kate Johnson
Yes, it really starts with clarity of our plan, who are we, who do we serve, what are our proprietary [gifts] [Ph], and you know, that yield a competitive advantage in the markets that we serve? We’re calling that our North Star. And a big part of that is really the economic model. So, we’ve obviously got some businesses that are in decline with commoditization happening, and some legacy technologies. And creating a path forward to get to growth is job number one. And how do you do that, and where are the investments that we need to make that economic model is really informing a lot of that work. And if you put the North Star together with the economic model, you get a shortlist of core priorities pretty quickly. So, I’m pleased with where we are with that stream of work, we have great drafts across the board. So, we’re making progress already.
Mike Rollins
So, when I think Lumen, I think of all of the assets that this company has put together over time, particularly on the fiber infrastructure side. How can Lumen uniquely solve connectivity solutions for customers?
Kate Johnson
So, I mean, I think we need to go back and first talk about those customers, right? So, one of our core priorities for the company is going to be to become customer-obsessed. That’s a word that’s often used in technology; I don’t know that it’s necessarily used in telecom as much. If you go back to our roots, that’s not necessarily what you needed to do; you had an offering, you brought it to market, and collect the rents off of those assets. In technology, you shape things to solve problems. And obsessing about customers’ needs is the way that you drive innovation that drives differentiation that serves those needs. And that will be our number one core priority; it’s where we’re going to focus everything.
And that will then inform our different pools of capabilities across core network services and connectivity. Continuing to make sure that we have the most unique routes, continuing to make sure we have state-of-the-art technology, lots of conduit out there; these are proprietary gifts that we have that we’re really excited about. The trick is how do we drive more value from those assets, and that’s the technology that we put on tap. Security is a huge opportunity for us; Edge Cloud, huge opportunity for us.
Mike Rollins
And so, the other thing I’ve thought about with Lumen’s history is, internally, there seems to have been a very significant focus on cost-cutting. And so, how are you thinking about pivoting the company from this historical focus on the cost cuts, and addressing some of the financial headwinds and become more growth-oriented?
Kate Johnson
Yes. I think it starts with our mission, right? So, our mission is to digitally connect people, data, and applications quickly, securely, and effortlessly. The first part, connecting people, data, and apps, that’s kind of our core DNA, right? Quickly, securely, and effortlessly; that’s really what our customers are demanding of us to solve some of those core problems of delivering cost-effective operations, securing their data and applications, innovating themselves and helping their employees thrive, right? And so, if we think about our mission and how do we do those three things quickly, securely, and effortlessly to solve those core problems, you very quickly line up your investment engines behind what you need to do.
Now, here’s the challenge for us. We’re the product of many, many mergers, right? And so, we’ve been looking inward for a long time about how do we drive synergy, how do we take cost out; it was all about operational efficiency. When you look inward for a long, long time you forget how to look outward. And that is a massive mindset shift that we’re going to be working on as a company. We want to start thinking outside-in. I’ve mentioned we want to obsess about our customers and their problems because that’s how we drive innovation, which will be how we get to growth.
Mike Rollins
Does anyone do this well in the category right now?
Kate Johnson
You know what, I’m going to sort of just stick to my knitting, and say that we’re going to be the best.
Mike Rollins
Great. And then from an organizational perspective, there was an announcement this morning on a new hire.
Kate Johnson
Yes.
Mike Rollins
What’s happening in terms of talent and shifting the culture internally?
Kate Johnson
Yes. So, think about turning the company to becoming customer-obsessed to creating the digital enterprise so that doing business with us is effortless. This is a big transformation journey. We need leaders who deeply understand how to drive change. And we also need leaders who deeply understand our core network services and all of the markets that we serve. It’s a combination of some of the people who are here and have been for a long time and are super excited about the future. But it’s also about bringing in new talent. And I — look, I think about my job as, number one, super-clear strategic plan; number two, right people in the right roles; number three, capital allocation.
And so, I’m really excited with the bench of tech talent that’s been calling to say, “Hey, we’d love to help you with this transformation. Looks like a great opportunity.” And today, we announced that Ashley Haynes-Gaspar is going to be our Executive Vice President of Customer Success, Wholesale and International. And I’ve worked with Ashley at GE and Microsoft; she’s a change leader, like I am and knows how to deliver impactful results, and is one of the most customer-obsessed people that I know. So, I’m excited, she’s a great addition to the team. And I think you’ll see, over the next couple of weeks and months, we’re going to make several more announcements just like that.
Mike Rollins
Are you ready for the results of the first survey?
Kate Johnson
Bring it.
Mike Rollins
So, 24%, invest in product and marketing for the business segment; 16%, accelerating fiber investments for mass market; another 16% for separating the assets in some way; and 44% reducing net debt leverage more quickly; zero for the partnerships, and zero for aggressively reducing expenses. As you’re thinking of the plan and the mission, are you thinking about some or multiple options here?
Kate Johnson
Well, I mean, I’ll take you through my first draft of priorities, and maybe we’ll sort of bump it up against that list and see where we land. You game?
Mike Rollins
Great.
Kate Johnson
All right. So, the first thing is develop customer obsession. I’ve talked a lot about that. That’s building a muscle that will serve us well for growth. Once we figure out what those customer challenges are that we can grow into, I think the next thing is to innovate and invest for growth. Building that innovation engine, we have a couple of programs in the hopper that are going to help us with agile development around how to innovate quickly so that we can make sure that we’re on the right path to putting product out there. But investing for growth, these are parts of the company that have been starving for a long time. Sales and marketing, when you’re operational efficiency-focused you tend not to spend nearly enough on sales and marketing.
And if you think about some of the technical capabilities being introduced into these markets, we really have got to put some dollars behind that. The next thing is building a reliable execution engine. I want the say-do ratio for this company to be at least 1:1. And what that means is doing less things but doing fewer things so much better than we’ve ever done before. And that’s everything from product invention, to launch, all the way through the lifecycle, to selling and supporting customers. So, you’ll see us really fine-tuning our execution engine there. We need to radically simplify the company. And that’s not only about stopping certain things and doing less and getting better at fewer things. But it’s also about kind of shutting things down because there’s sprawl.
Again, operational efficiency; every dollar looks good, so you go out after a lot of different things, and you end up not getting them to scale, and they consume precious resources. So, I want all of the resources aligned behind the programs and projects that will help us digitally connect people, data, and applications quickly, securely, and effortlessly. And then finally, we’re going to make sure that we invest in our culture, transforming our mindset from inside thinking to outside thinking.
Mike Rollins
Is part of — when you talk about the simplicity, is part of the issue here that, from a systems perspective, from a function perspective, that Lumen may still be a company of companies?
Kate Johnson
Yes.
Mike Rollins
And that you need to bring that together?
Kate Johnson
That’s a huge factor in this for sure. And so, it’s simplifying our IT real estate and preparing it for modernization and driving the digital enterprise, reducing the number of applications that we support and use, which will, by the way, be a big part of our operational efficiency journey. We’re going to continue to optimize for cost, but we’re also going to optimize for growth, and we’re going to do that together.
Mike Rollins
And when you think about the foundation of what Lumen is and what attracted you to the company, are there unique differentiated or underappreciated assets that investors should be mindful of?
Kate Johnson
Definitely. So, our core network, the crown jewel, it’s state-of-the-art, and it has unique routes and lots of conduit. And we have invested billions over decades in that. But the trick is getting the most amount of value out of that as possible, which is, I think, using technology to deliver solutions that solve those customer problems that I talked about. And I think two parts of our portfolio where we have tremendous gains, in Edge Cloud and Security. So, we help nations protect against bad actors, and that’s relevant at the enterprise level and at the consumer level. And so, you’ll see us leaning into commercializing those capabilities more and more.
Black Lotus Labs is our threat detection and prevention research lab; it’s world-class in terms of thought leadership and also in terms of practical solutions to help secure your data and applications. And I think it’s like the best-kept secret in the world. So, I’d like to tell the world about it, and then to actually commercialize it. And so, you’ll see me sort of coming back to those two areas a lot because they’re underappreciated in the market.
Mike Rollins
And as you’re thinking about this product menu and you’re thinking about offering customers a broader array of security options, and Edge options, how do you think about the need to own these products versus partnering and almost creating more of a marketplace where you could just deliver a broad array of customized solutions?
Kate Johnson
Yes. So, back to your little survey there; I think one of the places where we differ is I am a firm believer in a large partner ecosystem. And we are going to invest there, and let me tell you why. Partners are great for two things. Number one, helping you build out the complete portfolio, because there’s no technology company that actually has it all. In fact, that’s not a thing; there’s not a single customer that wants one vendor because that’s too much risk. So, building great partnerships that are deeply strategic, where your technology is better together; that’s a story of scale. And that’s what we’re going to — to grow, that’s what we need to do.
So, we’ll be looking for pieces of technology that augment our portfolio to solve those customer problems that I keep coming back to, which by the way, huge opportunity in terms of solving customer problems today, they have all the same ones they used to be, but on top of that, the hybrid workforce, remote and in-person is changing the game. It’s more complex and it’s lots of change, that’s an opportunity for a company like ours. So, reaching out into lots of different partnerships, whether it’s with the UCC providers, like Microsoft, Zoom, and Cisco, whether we’re talking about SASE with VMware and Fortinet, whoever it is or the hyperscalers, they’ll be important to our portfolio of capabilities discussion.
There’s another side to this which is feet on the street. And so, having a cadre of partners that — channel partners for sure, but also ones that bring a value story and help service partners that I could never have enough field-facing employees to cover those parts of the market. Two things; partner for growth in terms of go-to-market, and partner for growth in terms of intellectual property, and we’ll be looking at the combo platter, which is all about our story of growth.
Mike Rollins
So, right as you were arriving, Lumen cut the dividend. And as you’re thinking about your priority stack, should investors expect a significant change in capital allocation and investment levels to realize the opportunities that you’re outlining?
Kate Johnson
Yes, so I was an integral part of eliminating the dividend. And as I looked at this opportunity to lead this great company and to get to a place of growth, I knew that we couldn’t do that. We would simply not have enough money to fund ourselves in the way that we need to in order to grow and compete in today’s market. So, I’m really comfortable with where we landed on that. And now, we have the capital to be able to invest for growth, and you’re going to see us do that. But we also have other capital allocation priorities that we need to take care of, and we’ll be balancing through, and again, one of these — I think it was C on your list, just in terms of staying net leverage neutral, right? But long-term, we’d like to bring our debt down, but right now we want to keep it under four times, and supporting our stock with buyback when we see valuation disparities. And balancing between the two of those, but growth is job one.
Mike Rollins
You mentioned buybacks, so the question we’re going to get, I think, from investors is, as you think about that, is that something people should think about near- to-medium term? Or, should they think about it longer term once you make these investments and start turning the company and getting back to the growth objectives?
Kate Johnson
So, we have a two-year $1.5 billion buyback program approved by our Board. And we are going to be super thoughtful about how we do that. And again, look for the disparities and bump it up against our allocation priorities. So, it’s an evergreen process.
Mike Rollins
So, let’s threw our second survey question, due to our audience.
Kate Johnson
Let’s do it.
Mike Rollins
When can Lumen begin to profitability grow business in wholesale revenue? So, we are going to give a few choices, 2023, 2024, ’25 or beyond? Or no visibility on when Lumen can return the segments back to growth? So, as that’s populating it.
Kate Johnson
As it’s cooking?
Mike Rollins
As — yes, it’s brewing. We are getting responses. Maybe we will turn to the macro, Lumen touches so many parts of the economy both for consumer and business customers. Are you seeing any changes in customer behavior with respect to pipeline, decision-making for sales, and just in terms of the behavior of those customers?
Kate Johnson
Yes. So, our pipeline has been pretty stable throughout the year. We are happy about that. Looks good. When you talk about approval processes, in this economy, it’s super challenging. And you are always going to have enterprises making sure they have the right approval processes in place. So, think about it as layers of administration on top of any spends that they do. And what’s the one thing they are looking for? They are looking to make sure that whatever the executive is going to buy, whatever the division is going to buy is going to solve those existential priorities or problems that I keep talking about. Reliable and core operations and securing your data and applications that’s existential for any CEO including me. And so, our job, number one is make sure that we have the business case and the story of how we help them deliver those business outcomes or solve those challenges every single time we pitch.
When you are operational efficiency focused and you are looking in and you come from a history of being a utility many decades ago, that’s not necessarily a forte. So, we will be building that muscle and addressing that head-on that our technology can actually deliver great outcomes for companies in any market, especially a market that’s down because you know technology can often help solve those problems and take cost out.
Mike Rollins
And as you think about, there is the possibility of recession this year. But, there is also a substantial change in digital transformation for companies in accommodating a hybrid workplace that developed during the pandemic and just hasn’t existed really prior to that. So, do you think even if the U.S. goes into recession, is there more opportunity because of the digital transformation and the migration to hybrid work in the security solutions and cloud solutions and Edge that’s needed from all of that?
Kate Johnson
Yes.
Mike Rollins
Or, do investor still need to be sensitive that recessions are net risk in the business segment particularly?
Kate Johnson
So, I think it’s from where you come from. I come from technology, right? And so, the technology world, technology is purchased during down cycles to help strengthen companies coming out of those cycles. And those are opportunities with this company just like any other one. And we will be very thoughtful about how we go after that. I think when you think about the hybrid workforce, people wanting to work from but also needing to come in, that represents change. We love change.
Change is complex in this world with these giant enterprises and they need help. They need the high touch. They need us to help them think through how to deliver those business outcomes and that’s what we do. So, while I am cautious because pressure is pressure. And we have got lots of it. And we have got a lot of work to do. This is something that we can flex our muscles and bring some of these great leaders in that I talked about that know how to do this and can help guide us.
Mike Rollins
And are you seeing anything on the mass market sides? We are talking about more business just in terms of behavior — customer behavior. You have got your quantum product in the market. You have got some legacy products. What do you see out of that segment from an economic perspective?
Kate Johnson
Well, I mean, look you want to talk about inflation?
Mike Rollins
Please.
Kate Johnson
So, inflation basically you announced in our last call that we will about a $100 million hit to EBITDA in 2022 mostly in the back half of the year. That’s from an enterprise perspective. There is going to continue to be cost pressure going into 2023. We will use our operational efficiency initiatives to offset that pressure. But, it’s there and it’s real. And so far, it looks it could potentially continue.
I think from a mass market’s perspective, what we are seeing is that while it’s little bit of an increase to our target cost per enablement, it’s not materially affecting the notion of the lifecycle value for customers which is the good news out of that. Our product is extremely strong. I love our NPS scores. I actually had to triple click. Not double, not single, but triple, quadruple click to look into them because they are so good. And it’s exciting. And I think we can learn a lot from how we are serving customers digitally in that business. So, more to follow there.
Mike Rollins
So, where you are offering the strategic fiber products, seeing good performance, good results, good buyer?
Kate Johnson
Absolutely.
Mike Rollins
Ready for the results of the survey?
Kate Johnson
Yes, I am. What do they say?
Mike Rollins
So?
Kate Johnson
Will you remind me of the question?
Mike Rollins
The question is when can Lumen begin to profitability grow business in wholesale revenue? Three percent 2023, 17% 2024, 47% ’25 and beyond, and 33% no visibility. And of course, we would welcome you to weigh into your selection for survey.
Kate Johnson
I thank you for your input.
Mike Rollins
When you think about the business in wholesale side, maybe to think a little bit more about the revenue opportunities, can you help unpack how you view competitive position? We were talking about a little bit earlier. But what are the most compelling opportunities to profitability improve your market share?
Kate Johnson
So, think about I keep going to back to this mission statement because I am trying to help clarify who we are. We did really connect people, data, and applications quickly, securely, and effortlessly. Why is that important because applications power the global economy. And data is the currency of those applications. And so, we are incredibly relevant in today’s economy for the growth story of the macroeconomic environment for any enterprise. And so, we are deeply relevant. We’ve got a lot of change that’s being introduced as I said. Now, where do we have muscle? So, we were incredibly thoughtful and very strategic when we decided to go into Edge. And I think the world once thought we’re going to be all public cloud all the time. And then they looked at the reality of sort of retailers, the reality of manufacturers, healthcare companies et cetera.
And Edge is a big part of how you need to connect people, data, and applications. The proximity of our Edge capabilities to most businesses is extraordinary and is unparalleled. And so, we are excited about that. You are going to see us building and partnering to bring technology to the Edge that is going to be differentiating. And we are going to be very clear on how we solve those unique problems of customers at the Edge. So, that’s one place where I have a lot of confidence that we can flex our muscle there.
And then the other part is where I talked about security where we are doing some really special things to protect our network and to help the government protect the country. And all of that is translatable to both protecting individuals at the consumer level as well as enterprises. So, super unique gifts, undervalued, and we are going to be leaning into them heavily.
Mike Rollins
So just to unpack the Edge a little bit more because the word edge is something that’s used by a variety of companies in the ecosystem. When you are thinking about delivering Edge services, can you just give us a brief overview of what that might look like? And in terms of the sales opportunity, what can Lumen do differently to invest in the sales and go-to-market to take advantage of this opportunity?
Kate Johnson
Yes, sure. So, I think just — the way to summarize Edge is latency slaying power period. So, if you are putting creamy filling in a cookie and you need to adjust the lime. You cannot wait for that data to go up to the public cloud and come back. You have to use either on-prem or Edge in order to provide the latency slaying power to get the cream filling in the right spot — big cookie girl by the way. But, it’s actually a manufacturing story. And that’s my point is that as we become customer obsessed, we will continue to deeply understand the problems that manufacturer, retailers, healthcare companies et cetera are trying to solve. And we know for a fact that our Edge is in the place where it can slay latency for those types of use cases and business outcomes that those customers are seeking.
Mike Rollins
Because you deep fiber, because you can put software solutions on top of that?
Kate Johnson
Because we have got unique routes, because we did the calculus a long time ago to get to the right spot all across North America, and we are within less than 5 milliseconds of 97% of businesses and nobody can make that claim. So, we are excited.
Mike Rollins
And so, from a go-to-market perspective, how much of this a direct selling opportunity versus using channel partners and indirect and solutions providers to help get your fiber and your connectivity and your solutions into the hands of these customers?
Kate Johnson
It’s a good question. When you are first coming into a job, you sort of look left or right about what do we do and what do we do well. And, what do we need to work on. And I was surprised at how little we appreciate the partner ecosystem. Because the partner ecosystem as I said before, I will never be able to hire enough sales and marketing people be on the street to be able to cover the markets the way need to covered.
And so, we have points of accountability at the — for serving their commercial enterprise, leaders serving public sector, and then now for the first time ever, a leader running the team to serve SMB and mid market. And the reason why that’s important is because in the old days way back in 2022, basically mid market was embedded in our sales teams. And if you are a sales person trying to make your quarter for the year, you are naturally going to go after the bigger deals to get there as quickly as humanly possible so you can get to your accelerators.
The bid market motion is completely different than the enterprise motion. And so, it got starved a little bit in the process. Now we see a huge opportunity there too invest and go after that segment with the right leadership. And it’s going to 100% depend on your ability to build and nurture a partner ecosystem to help us cover those customers. When you talk about the large enterprise, commercial public sector, they want high touch, they want reputation which we have. They want deeply technical capabilities and managed services and they want state-of=the-art network. We have all of that. So, we maintain face-to-face for those segments. But the place where we need just scale and go quickly, they are looking for simpler offerings. They are looking for no touch. They are looking for digital service across the entire customer lifecycle. We will be using partners heavily in those scenarios.
Mike Rollins
Maybe shifting back to the mass markets in quantum fibers. So, big decision last year to or actually last couple of years to accelerate fiber upgrades inside of the footprint. And then, I think in the fourth quarter there was some discussion about maybe a pause in revisiting some of these mass market strategies in terms of the timing the fiber. Can you walk us through sort of what’s happening in terms of the quantum builds? And what the pause is solving for?
Kate Johnson
Sure. So, the pause is really about figuring about how we can drive maximum shareholder value period. So, we were very focused on counting, building enablement. So, that was success metrics. As many as possible, more is always better. And the reality is quantity not always better than quality. Delivering quality enablements is a better story around driving profitable revenue. So, every dollar coming in the door greatly exceeds cost of capital. And so, placing the emphasis there on quality is a different approach. And so, that was the sort of pause or thoughtfulness that we are applying to this. So, the numbers of pure enablements decrease when you do that. Two things that we are doing to ensure that we are speeding up because we know that speed is important as well. Number one, I streamlined maybe in I think it was week two, the organization under one leader.
So, Maxine Moreau is President of Mass Markets at Lumen. And she has got full accountability from the P&L left to right, top to bottom. And what that meant is I took the operations organization out of a unified enterprise group. And I put it under her. Takes away any competing priorities for deployments. It takes away any organizational friction that might be there. And it gives us a streamlined org that’s fully accountable and can go after this business in a way that they should with the speed that they should.
The other thing is we are spending time building a factory approach to this. So, everything we do we got to do at scale. And we have got to be mindful from counting the number of buildings that meet the criteria of quality all the way through to the deployments and making sure that the way that we buy is getting the best rates but also the fastest deployment all the way through sales and marketing. And making sure we are hitting our penetration rates and doing so with the highest NPS scores in the marketplace.
Mike Rollins
Seems like over the last year or so, there’s a little bit of a surge in terms of the interest of different players in fiber infrastructure, whether it’s upgrading or overbuilding. And part of this is under the bucket of whether we need — or within the bucket of whether we need converged services for households of fixed and mobile broadband. What do you think is creating this interest for overbuilds and for potentially more fiber? And is there a concern that some of these overbuilds can hit your markets and create a less favorable competitive landscape?
Kate Johnson
Yes. So, the — let’s talk about the interest first. The interest is there because it’s a good business, albeit capital-intensive, that’s why you’re seeing a lot of joint ventures. So, that said, we believe that there is an advantage to being the incumbent in these markets. So, when you’re the incumbent and you have an existing fiber network, you’ve got technical capabilities, you’ve got facilities, you’ve got employees that can help you get up and running really, really quickly. And we’re leaning into that advantage. That said, going fast and being first mover, there is always an advantage to that. And so, we want to do that more often than we have been. And that’s why I talked about streamlining the organization and building that factory approach. So, you’ll see us taking our incumbent advantage and putting it together with first mover, and good things are going to happen.
Mike Rollins
Is outside capital an opportunity for your fiber initiatives, or given that you think it’s a good business model would you rather retain 100% of those economics?
Kate Johnson
Well, we’ll look at every opportunity to deliver maximum shareholder value, and we’ll do that perennially. That is the job.
Mike Rollins
And how do you look at wireless as an important tool in the toolbox, whether it’s for the enterprise business or for the Mass Market business?
Kate Johnson
So, I mean, I think if you think about fixed wireless, there are opportunities in some of these really complex enterprise deployments that I talked about, manufacturing floors, et cetera, where there’s a bit of a better-together story. But if you’re talking about fixed wireless opportunities for down market, it’s — we’re seeing a little bit of that in the rural space, but mostly for copper customers that are choosing speeds of 20 megabits per second or less. And their standards around symmetric of upload and download and the speeds and the reliability is just fundamentally different. And our Quantum product, we are maniacally focused on those metro areas where the standards are super high, our product is great, and we can get the return for shareholders.
Mike Rollins
And do you have a view on mobile, whether mobile would be accretive to — even though it might be a resale, just accretive to the market share opportunities whether it’s in the enterprise or in consumer to get a better share of what you make money from?
Kate Johnson
I think that’s a week nine. I’ll look at that at week nine.
Mike Rollins
Final question, so as we look into 2023, now that we’re here, what are the near-term opportunities that you see to drive towards Lumen’s goal of achieving this profitable revenue growth that we were talking about earlier?
Kate Johnson
Yes. So, we’re — I mean, it’s — look, I was brought in from the outside, I’m a change leader. We’re in a reset mode. We need to do lots of basic things to position ourselves to take advantage of the opportunity that’s before us. And we will be doing all of those things with great speed. You will see us doing — as I said before, we’re going to do fewer things, and we’re going to do them really, really well. And positioning ourselves from a mindset perspective around customer obsession and putting customers at the heart of everything we do, simplifying the company, driving the digital enterprise with automation and workflow, using data and AI to get great at maintaining the network and driving efficiency there, and innovating and investing for growth, that’s this year. We’re standing up all of those programs so that we can execute reliably and deliver the return that we know we can and should to our shareholders. That’s what ’23 looks like. So, I’m excited. We got a — the team is coming together really, really well. And I’m looking forward to sharing more of the story with you in the coming months.
Mike Rollins
Well, Kate, thank you so much for sharing your time with us. And we look forward to hearing more in the future too. So, thank you.
Kate Johnson
Thank you.
Mike Rollins
Thanks.
Kate Johnson
Great.
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