Bloomberg Newsreports that AT&T is in talks to acquire Lumen Technologies’ consumer fiber operations, in a deal that could value the unit at more than $5.5 billion, citing people with knowledge of the matter. The companies are in exclusive discussions about a transaction valuing the unit at more than $5.5 billion, said one of the people, who requested to not be identified discussing confidential information. The terms of the unfinalized deal could change or the talks might still collapse, according to the report.
“If the rumored price is correct, it is a great deal for AT&T,” wrote the financial analysts at New Street Research in a note to investors. “The value per [fiber] location at $5.5 billion would be about $1,300 which compares to Frontier at $2,400, Ziply at $3,800, and Metronet at $4,700,” the analysts continued.
The potential move to offload
Lumen’s fiber business, which provides high-speed internet services to residential customers, comes as Lumen is focusing on the AI boom for business customers for growth, while grappling with a rapid decline of its legacy business. Lumen initiated the process to
sell its consumer fiber operations, Reuters reported in December.
“We’re looking at all possible arrangements,” Lumen CFO Chris Stansbury said during the company’s quarterly conference call, according to a Seeking Alpha transcript. Lumen’s mass market business served 2.6 million residential and small business customers at the end of the third quarter of 2024. Roughly 1 million of them were on fiber connections, while the rest were on the operator’s copper network. The fiber-optic based network provider has over 1,700 wire centers across its total network, with consumer fiber available in about 400 of them.
“For Lumen, a sale at $5.5 billion would be disappointing,” the New Street analysts wrote. “The rumored range was $6-9 billion. Most clients seemed to focus on the low end of that range, anticipating perhaps $6 billion for a sale of just the fiber asset.”
Source: Panther Media GmbH/Alamy Stock Photo
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Sidebar – Lot’s of fiber deals:
Verizon is pursuing Frontier Communications for $20 billion; Canada’s BCE is hoping to acquire Ziply Fiber for $5 billion; and T-Mobile and KKR are seeking to buy Metronet. Earlier this month Crown Castle sold its small cell business to the EQT Active Core Infrastructure fund for $4.25 billion and its fiber business to Zayo for $4.25 billion.
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AT&T has been investing in its high-speed fiber internet offerings to help drive faster subscriber and revenue growth. Earlier this month, it had forecast first-quarter adjusted profit in line with analysts’ estimate. If AT&T does close on a purchase of Lumen’s fiber business, the deal would surely solidify AT&T’s position as the nation’s largest fiber network operator.
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