AT&T has officially announced the acquisition of Lumen’s Mass Markets fiber business for a sum worth $5.75 billion, subject to purchase price adjustments.
Thanks to the given agreement, AT&T should be able to expand investment in critical U.S. connectivity infrastructure, create new middle-class jobs, and accelerate high-speed fiber internet access for millions of Americans. More on the expansion of company’s footprint would reveal how it will mark AT&T’s entry in major metro areas like Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City and Seattle, as well as other geographies.
Markedly enough, Lumen Mass Markets’ fiber assets included in the deal bring, on their part, more than 1 million fiber subscribers across more than 4 million fiber locations. Over time, these subscribers will transition to be AT&T Fiber customers and have the leeway to access the latter’s own industry-leading capabilities.
Talk about the whole value development on a slightly deeper level, we begin from its promise to accelerate an efficient build engine for constructing fiber home internet connectivity outside of AT&T’s traditional wireline operating region. You see, through this transaction, AT&T will gain access to Lumen’s substantial fiber construction infrastructure within its incumbent local exchange carrier (ILEC) footprint. Once in control, the telecom giant plans on speeding up the ways in which fiber is being built across these territories.
All in all, AT&T now expects to reach approximately 60 million total fiber locations by the end of 2030.
Next up, the deal in question will provide American consumers with a greater amount of options, moving forward, when selecting broadband and wireless services the way they prefer i.e. fiber and 5G together. In that respect, customers with both AT&T Fiber and the company’s wireless services were deemed as more likely to recommend AT&T, remain customers longer, as well as provide the best returns.
Beyond that, AT&T also expects that its ability to offer 5G wireless and fiber broadband connectivity, within Lumen’s Mass Markets fiber ecosystem, will empower the company’s case when it comes to growing its base of high-value converged customer relationships and driving gains across its mobility business.
Among other things, it must be acknowledged that, after closing the deal, Lumen will provide AT&T with services and support under multiple transitional agreements. These agreements are designed to last for approximately two years, covering certain field operations, network deployment, IT systems, billing, customer support, and other services, during this timeframe
As part of the transaction, AT&T will further receive long-term access to certain Lumen central offices, poles, and conduits.
Once the deal with Lumen is formally completed, AT&T also plans to sell partial ownership of NetworkCo to an equity partner that will co-invest in the ongoing business. The company will likely identify an equity partner within approximately 6-12 months of the original transaction.
The Lumen acquisition even aligns with the priorities outlined at AT&T’s 2024 Analyst & Investor Day, including its goal of becoming the best connectivity provider in America, while simultaneously providing more value to customers, shareholders and the company itself.
“We’re leading the race to connect more Americans with fiber, the best broadband connectivity technology available,” said John Stankey, Chairman and CEO, AT&T. “This deal with Lumen represents a significant investment in U.S. connectivity infrastructure that will create jobs and spur economic activity in numerous regions and major metro areas across 11 states. As we advance our fiber build, we’ll serve more communities with world-class connectivity and expect to roughly double where AT&T Fiber is available by the end of 2030.”
