Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Wednesday, September 23, 2020

Lumen highlights the “network effect” of platform-based business models

In the framework of the CenturyLink Forum 2020 Latin America, Héctor Alonso, president of CenturyLink Latin America, referred to the recent rebranding of the company, which was renamed Lumen. As he told Convergencialatina, the change reflects the transformation of the firm from a telecommunications company to a technology company.

At the opening of the CenturyLink Forum 2020 Latin America, Luis Piccolo, VP of Sales for the South Cluster at Lumen, referred to these models as one of the main learnings from the pandemic. "They have great power in terms of market capture and it is risky for a company not to adopt a model of this type," he said.

With Amazon as an example of success on a global scale and Mercado Libre on a regional level, the platform-based business model is one that facilitates exchange between user groups, with consumers and producers who interact through the platform. Among other properties, the owner does not own the inventory; there is a curation of the content and the quality of the transactions; and a community is created in an environment of secure transactions, which gives value to the user. This produces a virtuous circle, with a "network effect" as a central differential compared to other business models: feedback from users themselves allows the growth of the platform - in some cases "explosive", according to Piccolo highlighted, and manages to capture large parts of the market.

In a talk with Convergencialatina, Héctor Alonso, president of CenturyLink Latin America, referred to the recent rebranding of the company, which was renamed Lumen. The change reflects the transformation of the firm from a telecommunications company to a technology company. In the framework of the health emergency, Lumen observed an increase in traffic from 20% to 30% in Latin America (Brazil and Colombia grew 30%), driven by the need of customers to have their resources distributed in the homes of employees.

To accompany this increase in traffic, the executive said that growth at the network level will not be enough, but rather that platforms will be needed to boost digital businesses.

One of the four pillars of the Lumen platform is security, in relation to protecting the customer where the attack originates. In 2021 Lumen will expand the capacity of its Scrubbing Centers -traffic monitoring centers- with nodes in Colombia, Argentina and Mexico, according to Alonso. At the end of this year, in addition, Lumen will launch “threat intelligence” solutions that provide intelligence on attacks on public and private networks, now used to higher traffic and a greater number of connected devices.

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