Lumen’s EMEA Divestiture

Tony:

Hello, I’m Tony Mangino from TC2, and this is Staying Connected—where we talk about what really matters to enterprise buyers navigating today’s technology and sourcing decisions.

I’m joined today by my colleagues Frank Zagrodnik from TC2 and Deb Boehling from LB3 and we’re going to discuss the various impacts of supplier asset divestitures, some specifics on the Lumen’s recent EMEA divestiture and considerations of these impacts to your organization.

The expansion and retraction of individual providers’ networks that we see with Lumen’s sale of its EMEA assets to COLT is reminiscent of the late 90s and early 2000s where top providers expanded their networks in their home country, to a region or the world, retracking after the 2000 dot-com bust. Global Crossing, WorldCom and Qwest sound familiar?

Frank and Deb, thanks for joining me today. To start, for our listeners who might not be familiar with the Lumen divestiture, let’s start with some background there.

Frank:

Thanks Tony, it’s great to be back on Staying Connected.  

So, we must rewind a bit.  On November 1, 2023, Lumen Technologies completed the divestiture of its European, Middle Eastern, and African (EMEA) business to Colt Technology Services for $1.8 billion in cash. This transaction included Lumen’s entire EMEA terrestrial and subsea network infrastructure, data centers, and network equipment.  Fast forward, as of January 2026, the two companies operate as strategic partners, allowing Lumen to focus on its North American core while utilizing Colt’s expanded footprint to serve international clients.

One of the questions is, why are we talking about this now? 

We still see some of our clients that have not made network decisions in EMEA and continue to be billed by Lumen.  There are many reasons for this: a) smaller component of their network and it hasn’t been prioritized, b) customers may be waiting for other supplier contracts to expire and then focus on a global procurement or RFP, and consolidate, or c) simply treating it as business-as-usual and kicking the can.

Whatever the reason, inaction or waiting probably isn’t the best option

Tony:  Deb, you’ve worked global and multinational ICT deals for decades, including ones with “strategic partners” like AT&T World Partners (AT&T, KDDI, Singtel, Telstra, BT, DT) and Concert Communications (BT & MCI). These had trouble gaining traction and fell apart in less than a decade. Do you think this new Lumen / COLT partnership will last?

 Deb:  Hi Tony, thanks for having me back on Staying Connected.

Whether and how long it will last is unknown.  There are no public details about the “Lumen Service Provider” contract where Lumen provides US services to COLT or about the “Buyer – aka COLT – Service Provider” contract under which COLT provides non-US services to Lumen. These underlie this partnership. We don’t know their duration or the terms, whether there are minimums that each party must meet, or whether leaving their obligations behind are better than sticking with those contracts. Remember, in each of these agreements one is a provider and the other a customer. It’s no surprise that similar challenges arise in enterprise ICT purchase contracts.

Other variables include multinational ICT purchasers’ experience with the Lumen COLT partnership and how they seek to structure their purchases. In the 30+ years I’ve worked on ICT contracts, multinational clients have moved from country-specific, to region-specific (EMEA, Americas, APAC), to global contracts and some have reverted back to regional or country-specific contracts.

Tony:  Thanks, Deb. Frank, with so much still TBD, are Lumen and COLT reaping the benefits?

 Frank:  

When you look at the why behind this divestiture, you need to consider some of the benefits.  Both from a supplier perspective, as well as your own enterprise considerations.

First, from a supplier perspective.

For Lumen, the $1.8 billion sale provided significant capital to reduce debt and focus on high-growth areas like its North American fiber business. This shift follows a similar 2022 divestiture of its Latin American business.  This could prove to be beneficial as investments are more concentrated and ultimately focus on core offerings.

For Colt, they gained ownership of approximately 1.6 million kilometers of fiber and 12 cable landing stations.  Ownership of these assets—rather than leasing from third parties—provides Colt with greater control over pricing and service level agreements (SLAs).

Tony: Possibly a win-win for each supplier.  What do you think this means for our clients?

Frank:  

For enterprise customers, the transition has been designed to prioritize service stability through a long-term partnership agreement.

 Former Lumen EMEA customers now have access to Colt’s broader digital infrastructure, which spans 32 countries and includes high-density metropolitan networks in 230 cities.

 Multinational corporations that require services across both North America and EMEA can still engage with either provider. Lumen serves as Colt’s “partner of choice” for North American connectivity, while Colt acts as the primary infrastructure provider for Lumen’s North American customers with needs in EMEA.

Lumen customers gain access to Colt’s advanced “On Demand” and SD-WAN technologies, as well as integrated SASE (Secure Access Service Edge) and managed hosting services.

 But keep in mind, there are many other supplier alternatives in EMEA that an enterprise should consider.

 Tony:  Deb, what are some of the impacts you see with the partnership?

 Deb: Frank mentioned Lumen and COLT being each other’s partner of choice. Upon closing of their deal, Lumen’s president & CEO, Kate Johnson said “building deep relationships with strategic partners allows us to simplify our business while delivering a seamless networking experience for our multinational customers.” This experience, however, may not be seamless. 18 months post-closing, Lumen’s strategic partner, COLT, divested 6 of the acquired data centers in Germany, UK, and the Netherlands to NorthSea and 2 to a private UK entity.

Negotiating with Lumen or COLT for US and EMEA services may start with lowest common denominator contract terms. Let me give you an example. If the contract under which Lumen buys services from COLT limits COLT’s damages for confidentiality breaches or has poor SLAs, Lumen will set the same or lower limits and SLAs in its customer contracts. Lumen’s willingness to do more would require it to get concessions from COLT or to accept a risk over which it has limited control. It controls the US network, but no longer controls the EMEA one. Expect frustration and delays in your negotiations, particularly with Lumen, who pushes risks (even those it can control) to its customers.

Tony:

Frank, what is your take on the potential impacts of the divestiture?

Frank:  

Certainly, a divestiture can bring both opportunities and challenges. 

When you consider the challenges, this may result in moving to another supplier in EMEA.  That’s means more contracting, different portals, additional account teams, more invoices, just to name a few. 

If you keep your network with Colt in EMEA, there may be integration complexities and service friction that the combined assets introduce.  Combining two distinct optical network technologies and back-end automation systems is rarely seamless. Customers may experience “deployment friction,” such as longer onboarding processes for new services as the combined entity reconciles different platforms.

Divestitures often lead to a change in service culture. While most of Lumen’s 1,300 regional employees transitioned to Colt, customers may still face “visibility gaps” in end-to-end management or slower support response times during their transition phase.

Lastly, one of the most significant for our clients, large enterprises that intentionally used both Lumen and Colt for carrier diversity may now find themselves with overlapping footprints and a single point of failure. This “customer overlap” can complicate risk management for enterprises who require site and carrier diversity.

Tony: 

Deb, what should enterprise customers do in this particular or other similar situations?

Deb:  

In your contracts, you should seek protections against the negative impacts of divestitures by your ICT providers. Four core ones are ,first, a post divestiture right to conduct due diligence on the acquiring company. For regulated companies this typically focuses on information security reviews, including completing information security questionnaires at no cost to you. Second, the right to terminate the contract or services if the acquiring company does not meet your security requirements, the acquiring company is a competitor of yours, or diversity of your network services would be lost . For the diversity right to work, your orders must include KMZ routing maps and obligations on the vendor to maintain the route disclosed. Third, a strong, detailed account team for support, with appropriate limits on changes to the account team and requirements for knowledge transfers. It’s good to have a “hot” back up account team member ready to jump in. And finally, an automatic reduction in minimum spend requirements if you terminate services.

Tony:

Frank, any closing thoughts?

Frank:

This is definitely a space to watch closely in the coming months, particularly if you’ve got significant network footprint in EMEA with Lumen/Colt.  And as I mentioned earlier, there are many other supplier alternatives in EMEA that an enterprise can consider and we always recommend vetting alternatives through an RFP or some kind of leveraged sourcing event to drive the best outcomes.

Tony:

To our listeners, if you would like to learn more about how to manage supplier divestitures and take next steps, or if you’d like to discuss other technology strategy, sourcing and cost reduction needs with Frank, Deb or me, or any of our TC2 and LB3 colleagues, please give us a call or shoot us an email. 

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