AT&T has reached an agreement to acquire most of Lumen Technologies’ residential fiber business in a cash transaction valued at $5.75 billion. Once the deal closes, AT&T expects to extend its high‑speed internet service to millions more homes across 11 U.S. states.
The transaction covers Lumen’s “Mass Markets” fiber assets, which currently serve roughly 1 million customers through about 4 million fiber‑ready locations. AT&T plans to migrate these customers onto its own fiber platform over time, integrating the connections and service operations into its network.
This purchase is aligned with AT&T’s broader strategy to expand its fiber footprint. The company says the deal will accelerate its goal of roughly doubling the reach of its fiber network by the end of the decade, helping it reach many more homes and businesses.
Geographically, the acquisition will strengthen AT&T’s presence in metropolitan areas where Lumen already has deployed fiber infrastructure, including Denver, Seattle, Phoenix, Las Vegas, and Orlando. AT&T intends to leverage those existing assets and use its own workforce and systems to broaden coverage in those markets.
A key element of the agreement is access to Lumen’s construction capabilities. AT&T says those resources will speed fiber rollouts in regions outside its traditional service territory and help it achieve a target of reaching approximately 60 million homes and businesses with fiber by 2030.
AT&T also believes the deal will enhance customer choices and strengthen loyalty. The company notes that customers who subscribe to both AT&T’s fiber and wireless services tend to stay longer and provide stronger satisfaction scores, and it aims to offer both services to more households as it integrates the new footprint.
The acquisition includes the last‑mile fiber connections to residences as well as equipment housed in local offices that supports the network. AT&T will place these assets into a newly formed, wholly owned subsidiary called NetworkCo. As part of the transition, some Lumen employees may transfer to AT&T or join NetworkCo to support ongoing operations.
The deal excludes Lumen’s enterprise fiber business and its copper network, which will remain with Lumen. After closing, Lumen will provide transitional support under temporary agreements—covering areas such as billing, IT systems, and field services—for up to two years while AT&T completes the operational handover.
AT&T expects the transaction to close in the first half of 2026, subject to approvals from the U.S. Department of Justice and other regulators.
Following the closing, AT&T plans to bring in an equity investor for NetworkCo. The company intends to sell a minority stake in the new fiber unit within six to twelve months after the transaction is completed. NetworkCo would then operate as a separate business focused on wholesale fiber access, with AT&T remaining its primary customer and all acquired residential customers continuing to receive service from AT&T.
AT&T says this structure will allow it to continue scaling its fiber business while managing capital deployment. The company expressed confidence in finding a partner and pointed to its prior experience building and operating a large fiber network. Management expects the transaction to have only a limited effect on earnings or cash flow in the first year or two, with greater benefits materializing over the long term.
AT&T also emphasized its commitment to maintaining disciplined leverage, targeting a net debt‑to‑earnings ratio around 2.5 times, and continuing its planned share repurchase activity. The company reaffirmed a goal to repurchase $3 billion of stock by year‑end and to complete the remainder of a $10 billion buyback program in 2026.
(Photo credit: Unsplash)
See also: AT&T achieves 20Gbps speeds on a production fiber network
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