Lumen fiber acquisition will assist AT&T double its present fiber footprint by 2030
AT&T is taking a brand new step in its aggressive fiber-and-5G technique, saying plans to accumulate Lumen’s Mass Markets Fiber Enterprise for $5.75 billion in an all-cash deal.
The deal aligns with AT&T’s long-term aim to extend its fiber footprint and can deliver AT&T Fiber to over 4 million new buyer places outdoors the corporate’s current footprint.
AT&T says it at present has about 30 million complete fiber places, and the Lumen purchase will allow it to double its present fiber footprint to about 60 million places by 2030. The enlargement will goal metro areas equivalent to Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake Metropolis and Seattle.
The acquisition is predicted to shut within the first half of 2026, pending regulatory approval.
John Stankey, chairman and CEO of AT&T, mentioned that the deal “represents a major funding in U.S. connectivity infrastructure that can create jobs and spur financial exercise in quite a few areas and main metro areas throughout 11 states.” That may deliver AT&T’s fiber attain to a complete of 32 states.
The plan: Develop fiber and choose up extra fiber+wi-fi clients
AT&T will purchase Lumen’s last-mile mass market fiber belongings and “related community components in central workplaces”, plus “considerably all” of Lumen’s non-enterprise fiber clients, which quantity round 1 million and will likely be transitioned over time to develop into AT&T Fiber clients.
The deal doesn’t embrace Lumen’s enterprise fiber clients or its shopper clients who use copper-based infrastructure—which is sensible, contemplating that AT&T is attempting to shut down its personal copper infrastructure.
AT&T mentioned that it expects to have the ability to increase the client penetration charges for the Lumen territories to be in-line with what it sees in present AT&T Fiber markets, rising its base of shoppers who subscribe to each fiber and wi-fi companies and thereby boosting its mobility enterprise as effectively. On AT&T’s most up-to-date quarterly name, Stankey mentioned that greater than 40% of AT&T Fiber households additionally subscribe to the corporate’s wi-fi companies. “Accounts with each fiber and wi-fi companies have lifetime values which might be greater than 15% better than clients with standalone companies,” Stankey added.
The deal follows broader business tendencies the place fiber deployment is seen as a key driver for financial development (though not everybody agrees). At AT&T’s investor day final December, executives had emphasised a number of factors of its go-forward technique: proprietor’s economics at scale, notably on the subject of fiber; implementing multi-vendor Open RAN; and exiting legacy infrastructure.Earlier this month, AT&T had introduced an open-access infrastructure take care of Prime Fiber to develop fiber entry in Arizona.
The Lumen deal additionally comes because the Federal Communications Fee authorised Verizon’s $20 billion acquisition of Frontier—after Verizon agreed to phrases that included dropping range, fairness and inclusion applications. In the meantime, T-Cellular US additionally has large plans for broadband. T-Cellular US closed on its Lumos fiber JV final month, with plans to develop Lumos’ community to achieve 3.5 million properties by the tip of 2028. T-Mo has put up $950 million for that JV to date, with one other $500 million deliberate for funding between 2027-2028.
T-Cellular US mentioned that it already provides fiber in components of 32 markets throughout the U.S. by means of its fiber JVs and partnerships, and it expects to achieve 12-15 million households or extra with fiber by the tip of 2030.
Lumen’s fiber will go to a subsidiary that AT&T will partly divest to regulate prices
AT&T mentioned that it’ll maintain the Lumen fiber community belongings, together with “sure fiber community deployment capabilities”, in a fully-owned subsidiary—which AT&T plans to partially divest to an fairness accomplice after the deal closes. That accomplice will co-invest within the ongoing enterprise.
The provider mentioned that the strategy is reflective of its technique to “mix direct possession with exterior funding to handle operational prices and danger.”
