AT&T sets path to reach 60M fiber locations by 2030 with Lumen fiber business acquisition

John Stankey, CEO of AT&T, said that having 5G wireless and fiber broadband connectivity within Lumen's Mass Markets fiber footprint will enable it to grow its converged customer relationships and drive gains in its Mobility business.

“We're giving customers more choice in selecting broadband and wireless services,” he said. “Together, we know customers appreciate having wireless and broadband services delivered by just one provider. We're eager to increase access to our world-class AT&T fiber and 5G wireless service and all their benefits, including the AT&T guarantee.”

After meeting regulatory approvals, the acquisition is expected to close in the first half of 2026.

Scaling outside wireline boundaries

A key element of AT&T’s fiber expansion strategy is that the Lumen fiber acquisition would rapidly expand service outside of its traditional wireline operating region.

AT&T will gain access to Lumen's substantial fiber construction capabilities within its incumbent local exchange carrier (ILEC) footprint and plans to accelerate the pace at which fiber is being built in these territories.

Stankey said the Lumen acquisition “will allow us to accelerate fiber access to millions of new customer locations outside our traditional wireline operating region.”

The service provider now expects to reach approximately 60 million total fiber locations by the end of 2030, roughly doubling the number of AT&T Fiber locations currently available.

“This is roughly double the amount of AT&T fiber locations today,” Stankey said. “We're looking forward to accelerating an efficient fiber build engine as we expand our award-winning AT&T fiber service.”

Aligning goals

AT&T’s move to acquire Lumen’s fiber business aligns with the service provider’s goal of growing its broadband business overall.

“The Company expects this transaction to drive returns comparable to AT&T's current fiber investments, as outlined at its 2024 Analyst & Investor Day,” AT&T said.

Further, AT&T expects that in the 12-24 months following close, the transaction's impact will be immaterial to consolidated adjusted EBITDA, adjusted EPS, and free cash flow and accretive over the long term.

As of the end of the first quarter, AT&T’s fiber network covered 23.8 million consumer locations and is expected to pass over 30 million locations by mid-year. At that time, AT&T reaffirmed its broader target of reaching more than 50 million fiber locations by 2029 through a combination of organic buildouts, GigaPower, and other commercial open-access agreements.

AT&T added more than 261,000 fiber subscribers in the first quarter, up from 252,000 in the same period last year. Total broadband net additions reached 137,000, marking the seventh consecutive quarter of broadband growth and the second successive quarter exceeding 100,000 net additions.

Since 2020, AT&T has passed 11 million more fiber locations.

“If you think about it, since the second quarter of 2020, we more than doubled our AT&T fiber subscriber base to over 9 million subscribers,” Stankey said. “Since 2021, we've nearly doubled consumer fiber revenues.”

Wholesale open access focus

The acquisition of Lumen Mass Markets' business includes last-mile Mass Markets fiber assets, the associated network elements in central offices that enable fiber services, and all of Lumen's Mass Markets fiber customers.

“This will position AT&T to deliver a consistent experience to AT&T Fiber customers within Lumen's Mass Markets footprint over time,” AT&T said.

AT&T will hold the acquired fiber network assets, including specific fiber network deployment capabilities, in a new, wholly owned subsidiary (NetworkCo). As part of this deal, the telco said it expects that certain employees will move or receive offers to move from Lumen to AT&T or NetworkCo.

After closing the Lumen acquisition, AT&T plans to sell partial ownership of NetworkCo to an equity partner to co-invest in the ongoing business. AT&T expects to identify an equity partner and close a transaction within approximately 6-12 months of closing the transaction with Lumen.

AT&T said that its “position as the operator of the largest and fastest-growing fiber broadband network in the U.S. and track record of generating attractive returns on its fiber investments,” makes it “confident it can secure an equity partner for NetworkCo.”

Also, AT&T expects NetworkCo to be deconsolidated from AT&T's financial statements and operate as a wholesale commercial open access platform, providing fiber access services to AT&T as the anchor tenant. All acquired Lumen Mass Markets fiber customers will remain AT&T customers.

The telco is hardly a stranger to the open access concept. In 2023, AT&T entered into a partnership with BlackRock. To reach more people with fiber in geographies not served by AT&T’s network or Gigapower, AT&T signed four new agreements with commercial open-access providers--Boldyn Networks, Digital Infrastructure Group, PRIME FiBER and Ubiquity—last September.

AT&T said it believes this “planned structure is consistent with its balanced approach to capital allocation – supporting the accelerated and capital-efficient expansion of AT&T Fiber outside of its traditional wireline operating region.”

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