Lumen Eliminates 60% of its Enterprise SKUs

Lumen Technologies says it eliminated more than 60 percent of its more than 12,000 enterprise SKUs (stock keeping units or products)  in less than a year. If one assumes there are about 100,000 to 120,000 total SKUs on tariff sheets globally, that implies a reduction of 60,000 to 72,000 SKUs should be possible, without damaging sales, revenues or profits.

In fact, according to Lumen, eliminating unused or legacy SKUs should reduce operating costs. 

But the existence of that many SKUs also illustrates the likely gap between revenue produced by a few leading products and revenue produced by almost everything else. Of course, no service provider ever reports revenue “by SKU.” Instead, SKUs get lumped together, typically showing a few big buckets such as home broadband or internet access, subscription video or voice services. 

Fixed and Mobile Service Provider Top Revenue Categories (Generic)
Fixed Network SKUs	% of Revenue	Mobile Service SKUs	% of Revenue
Internet Access	40%	Internet Access Data Plans	30%
Television Service	25%	Voice/Messaging Service	20%
Phone Service	15%	Mobile Hotspot Plans	15%
Other	10%	Other including phone sales	35%

The point is that a relatively small number of actual SKUs drive most of the revenue for any fixed network or mobile service provider, despite the existence of hefty catalogs. 

Mobile data roaming services, for example, might represent $8.6 billion in annual revenue for mobile service providers, on a global basis, in 2023. That likely means data roaming revenue, even if important, contributes far less than $1 billion in revenue for even the largest mobile operators.