Lumen is banking on its recent acquisition of Alkira, a cloud-native, cloud- and carrier-agnostic networking platform, to drive further enterprise growth.

With its Network-as-a-Service (NaaS) business concentrated in premises-to-cloud (north-south) connectivity, Lumen sees Alkira as a means to accelerate its move into cloud-to-cloud and data center-interconnect (east-west) connectivity — the fastest-growing segment of enterprise networking.

The service provider estimates Alkira’s global footprint and cloud-native capabilities will bring its total addressable market to about $70 billion.

Kathleen Johnson, CEO of Lumen, said developments in cloud connectivity, SD-WAN and SASE may have made distributed work possible. Still, innovation was relegated to the network, not in it, so businesses had to manage a disparate set of assets.

“Customers ended up having to stitch together too many tools, policies and handoffs,” she said. “It created sprawl, which is expensive and difficult to manage, secure and adapt to the speed of today's business.”

She added that adding Alkira to its solution portfolio can help overcome these issues. “Together with Alkira, we can simplify our architecture, improve control and create more value for customers,” she said. “By giving customers one cloud-based control point to connect and secure distributed environments, we can help them connect to any building, data center or public cloud while reducing sprawl.”

Dedicated Internet Access (DIA), which remains a popular Ethernet service and a top source of SD-WAN Access revenue, will be the starting point of Lumen’s integration of Alkira. “We are in the process of making Lumen DIA ports digitally discoverable and service-ready through our platform, and that's going to allow us to remotely provision, manage, and support these circuits, upsell additional capability on existing ports without a truck roll, and create a path toward more consumption-based offers,” Johnson said.

But Lumen’s vision of DIA is not just about connectivity alone. Instead, it is a foundation to support other cloud and security services.

“Our DIA installed base carries traditional telecom economics today, but the platform gives us a path to layer on high-margin digital services like Lumen Defender, DDoS, multi-cloud gateway and more,” Johnson said. “Those incremental services are expected to approach 80% adjusted EBITDA margin, helping drive Lumen's margin expansion.”

Likewise, the company noted strong NaaS adoption continued, with the total number of NaaS customers exceeding 3,000. Notably, in the second quarter, new customer adoption grew 22% quarter-over-quarter, and more than 20% of these first-time NaaS adopters were brand new to Lumen.

“Our NaaS growth rates exceeded even our own internal ambitions for the first half,” Johnson said. “And what's more, we achieved these results in the North-South connectivity market, a segment that's growing less than 1% per year.”

Another key growth driver was wavelength services, as 100 and 400G wavelength sales grew 11% year over year. “Contributing to the improving mix, strategic waves revenue, 100 and 400 gig grew nearly 11% year-over-year in the second quarter in our North American enterprise channels, and we expect that momentum to continue as strategic waves sales were up nearly 35% year-over-year in the quarter, which is a nice precursor to future revenue,” Stansbury said.

Lumen reported second-quarter revenue of $2.81 billion, down from $3.1 billion for the second quarter of 2025, which the company said was in line with expectations and slightly ahead of consensus.

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