AT&T to buy Lumen’s fibre business in $5.75 billion deal

AT&T has reached a deal to buy most of Lumen Technologies’ fibre business that serves residential customers. The $5.75 billion cash deal, once completed, will expand AT&T’s high-speed internet coverage to millions of homes in 11 US states.

The agreement focuses on Lumen’s “Mass Markets” fibre assets, which serve about 1 million customers through 4 million fibre-ready locations. AT&T plans to transition these customers to its fibre service over time.

This initiative is part of AT&T’s broader push to grow its fibre footprint. The company expects this deal to help it double the reach of its fibre network by the end of the decade.

Once completed, the deal will give AT&T a bigger presence in cities like Denver, Seattle, Phoenix, Las Vegas, and Orlando. These are areas where Lumen already has fibre infrastructure in place. AT&T plans to build on that by using its own systems and staff to expand coverage.

One of the key parts of the deal is access to Lumen’s construction capabilities. AT&T says this will help it roll out fibre internet faster in areas outside its usual service regions. It now expects to reach about 60 million homes and businesses with fibre by 2030.

The company also sees the deal as a way to give customers more options. Those who use both AT&T’s fibre and wireless services tend to stay longer and give better ratings, according to the company. AT&T hopes to build on that by offering both services in more areas.

The purchase includes the final connections to homes, known as last-mile fibre, along with equipment that supports the network inside local offices. AT&T will move these assets into a new subsidiary it will fully own, called NetworkCo. Some Lumen staff may also join AT&T or NetworkCo as part of the transition.

It’s worth noting that the deal does not include Lumen’s fibre business for enterprise customers or its copper-based network, which will remain with Lumen. After the sale, Lumen will still support AT&T under temporary agreements for up to two years, helping with operations like billing, IT systems, and field services while the handoff is completed.

AT&T expects the deal to close in the first half of 2026 subject to approval from the US Department of Justice and other regulators.

After the Lumen deal is finalised, AT&T plans to bring in an equity partner to invest in NetworkCo. The company aims to sell a stake in the new fibre unit within 6 to 12 months of closing the deal. Once that happens, NetworkCo would operate as a separate business focused on wholesale fibre access. AT&T would remain its main customer, and all the acquired Lumen fibre customers would stay with AT&T.

AT&T believes the structure will help it keep growing its fibre business while managing spending, saying it is confident it can find a partner, and pointing to its past success in building and running a large fibre network. AT&T says the deal won’t have much impact on its earnings or cash flow in the first year or two, but expects it to pay off in the long run.

The company also plans to keep its debt at manageable levels, staying within its target of 2.5 times net debt to earnings. It’s also sticking with its plan to buy back stock, aiming to repurchase $3 billion by the end of this year and the rest of a $10 billion program in 2026.

(Photo by Unsplash)

See also: AT&T achieves 20Gbps speeds on a production fibre network

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Tags: at&t, broadband, connectivity, Networks, telecoms