• AT&T is buying the consumer fibre access chunk of Lumen Technologies’ Mass Markets unit in an all-cash deal
• It’s the latest in a series of big bucks broadband sector deals in the US
• The deal enables Lumen to reduce its debt pile and focus on fulfilling its massive AI-driven network capacity deals with hyperscalers and its broader enterprise business

Only days after Verizon got the green light to expand its high-speed broadband access portfolio through a major M&A deal and two major US cable broadband operators announced their engagement, AT&T announced it is to acquire “substantially all” of Lumen’s Mass Markets fibre broadband access business for $5.75bn in cash in a deal that will include a network that currently reaches 4 million premises and already connects 1 million fibre broadband customers.  

Based on Lumen’s first-quarter 2025 results, those customers would generate more than $750m of annualised revenues. 

The deal was expected, as in March, Bloomberg reported that an agreement between AT&T and Lumen was in the works with a price tag of around $5.5bn.  

Those talks have now concluded and details have been agreed. The deal includes Lumen’s “last-mile Mass Markets fibre assets and the associated network elements in central offices that enable fibre services, as well as substantially all of Lumen’s Mass Markets fibre customers,” but it does not include Lumen’s enterprise fibre customers or its Mass Markets copper-based customers, or the associated assets to support them.

AT&T will put the acquired fibre network assets, including certain fibre network deployment capabilities, in a new, fully owned subsidiary currently dubbed NetworkCo. Once the acquisition is completed, AT&T plans to sell “partial ownership of NetworkCo to an equity partner that will co-invest in the ongoing business”. AT&T expects to secure an equity partner within 6 to 12 months of closing the Lumen transaction. Once that equity partner is on board, AT&T plans to spin out NetworkCo to operate as a wholesale open access company that will have AT&T as its “anchor tenant”. All acquired Lumen Mass Markets fibre customers will remain AT&T customers.

The deal, which is expected to close in early 2026, will enable the telco to significantly expand access to AT&T Fiber in major metropolitan areas, such as Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City and Seattle.

AT&T says it will “gain access to Lumen’s substantial fibre construction capabilities within its incumbent local exchange carrier (ILEC) footprint and plans to accelerate the pace at which fibre is being built in these territories. AT&T now expects to reach approximately 60 million total fibre locations by the end of 2030 – roughly doubling where AT&T Fiber is available today.” At the end of March, AT&T’s fibre access network reached 29.5 million business and consumer locations (of which some 23.8 million were consumer premises), up from 27.1 million a year ago. 

AT&T also plans to accelerate the FTTP uptake rate in the acquired markets, especially by bundling the service with its mobile packages. 

“We’re leading the race to connect more Americans with fibre, the best broadband connectivity technology available,” stated John Stankey, chairman and CEO of AT&T. “This deal with Lumen represents a significant investment in US connectivity infrastructure that will create jobs and spur economic activity in numerous regions and major metro areas across 11 states. As we advance our fibre build, we’ll serve more communities with world-class connectivity and expect to roughly double where AT&T Fibre is available by the end of 2030,” he added.

According to its first-quarter earnings report, AT&T ended March this year with 9.6 million fibre-to-the-home (FTTH) customers. Of that FTTH total, 3.9 million are “converged” customers that also subscribe to an AT&T mobility service. 

The news comes a few days after US regulator the Federal Communications Commission (FCC) gave Verizon the go-ahead for its $20bn acquisition of broadband network operator Frontier Communications, which was first announced in September last year. That coincided with the news that Charter Communications is to acquire fellow cable operator Cox Communications in a deal that values the latter at $34.5bn – see M&A megadeals reshape US comms sector.

As for Lumen, it has been looking to offload its consumer operations for some time as it focuses its efforts on the enterprise sector and, in particular, delivering high-capacity connectivity to AI datacentre operators.  

“We are sharpening our focus on enterprise customers, and this transaction enhances our financial flexibility, enabling us to reimagine networking for enterprises in a multi-cloud, AI-first world,” stated Kate Johnson, president and CEO of Lumen in this announcement. “As part of this deal, we are retaining the core infrastructure that allows us to continue innovating for enterprise customers, leapfrogging traditional networking architectures to give customers the bandwidth, performance and security they need. The fibre-to-the-home business being sold is tremendously valuable thanks to the incredible work by the team and [it] will now have [an] even greater opportunity to grow with AT&T’s scale, consumer focus and investment.” 

Lumen reiterated that it will “retain assets that will continue to serve as the foundation of its enterprise transformation, including all national, regional, state and metro-level fibre backbone network infrastructure, central offices and associated real estate. The enterprise and wholesale fibre customers will remain with Lumen in all geographies. In addition, Lumen will retain and care for its existing copper network, which primarily services consumer customers.” 

Once the deal closes, Lumen plans to use the net proceeds of approximately $4.2bn, plus cash on hand, to reduce its debt pile by approximately $4.8bn, a move that will reduce its interest expenses by approximately $300m per year.  

Johnson and her team are already laser-focused on fulfilling the major deals Lumen has struck in the past year or so. “Following the $8.5bn in AI-driven networking contracts with hyperscalers, Lumen plans to expand its vast nationwide footprint, scaling to 47 million intercity fibre miles by 2028,” the company noted, reiterating the plan it unveiled earlier this year. 

Johnson stated: “Lumen has a once-in-a-generation opportunity to build a digital networking company that will serve the needs of enterprise customers. Today, that’s in support of AI, and on the horizon, it’s quantum computing. This strategic decision is grounded in the expansive critical infrastructure we’re retaining and the forward-thinking digital future we’re building.”

- Ray Le Maistre, Editorial Director, TelecomTV