AT&T to acquire Lumen’s mass markets fiber business in $5.75bn deal to expand U.S. broadband reach

AT&T Inc. has announced its intent to acquire substantially all of Lumen Technologies’ Mass Markets fiber business in an all-cash deal valued at approximately $5.75 billion. The acquisition, expected to close in the first half of 2026, marks a bold push by AT&T to strengthen its position as a leading provider of high-speed fiber internet access in the United States. This transaction includes about one million existing fiber subscribers and extends across more than four million fiber-enabled locations in 11 U.S. states, covering key metro markets such as Denver, Orlando, Phoenix, Portland, and Seattle.

Through this acquisition, AT&T aims to integrate these assets into its existing fiber infrastructure and increase its fiber customer penetration to align with its national averages. The assets being acquired will be housed in a wholly-owned subsidiary, provisionally titled NetworkCo, which will serve as a separate operating entity under AT&T’s corporate umbrella.

Why Is AT&T Investing in Lumen’s Fiber Network?

AT&T has stated that this acquisition is aligned with its long-term infrastructure strategy to accelerate high-speed broadband deployment across the U.S. fiber market. As fiber becomes the dominant broadband technology due to its speed, reliability, and scalability, acquiring Lumen’s consumer-focused fiber business enables AT&T to expand its fiber footprint beyond its traditional wireline territories.

John Stankey, Chairman and CEO of AT&T, described the move as a critical investment in America’s connectivity backbone. He emphasized the company’s intent to deliver world-class connectivity and stimulate economic activity, particularly in underserved or growing metro regions. With this acquisition, AT&T estimates it will be able to double its current fiber reach and scale operations to serve approximately 60 million fiber-enabled locations by 2030.

How Will This Deal Affect Lumen Customers and Employees?

The Lumen Mass Markets customers will transition to AT&T Fiber over time. These subscribers will benefit from AT&T’s service features, including multi-gig speeds, built-in network security, and the company’s simplified pricing model. Additionally, select employees currently managing Lumen’s Mass Markets fiber services are expected to be offered positions within AT&T or the newly created NetworkCo subsidiary.

It’s important to note that Lumen will retain its enterprise fiber customers and copper-based mass market customers, which are not part of this transaction. After the close, Lumen will continue to support AT&T through transitional service agreements spanning field operations, IT systems, and customer service for up to two years. AT&T will also gain access to certain Lumen infrastructure such as central offices, poles, and conduits, which are critical for seamless service continuity.

What Is NetworkCo and Why Does It Matter?

NetworkCo, the new subsidiary that will hold the acquired assets, will eventually become a separate commercial platform with wholesale open-access fiber capabilities. AT&T plans to maintain NetworkCo as a fully owned entity initially, but expects to identify and bring on board an equity partner within 6 to 12 months after deal closure.

This approach enables AT&T to pursue an asset-light, capital-efficient strategy while maintaining operational control. Post-investment, NetworkCo is expected to be deconsolidated from AT&T’s financial reporting. However, AT&T will remain the anchor tenant for all fiber services offered by NetworkCo, ensuring continued end-customer consistency.

The proposed structure aligns with AT&T’s broader capital allocation strategy, giving it room to expand infrastructure investments without materially affecting its balance sheet in the near term.

Will This Deal Change AT&T’s Financial Outlook?

According to the company’s official statement, the transaction is expected to deliver returns comparable to AT&T’s existing fiber investments and remain accretive in the long term. In the 12–24 months following the transaction’s close, the company forecasts that the impact on adjusted EBITDA, adjusted EPS, and free cash flow will be immaterial.

AT&T also reaffirmed its commitment to its 2025 financial guidance, including plans to operate within a net debt-to-adjusted EBITDA target of 2.5x. Moreover, the company plans to continue its share repurchase program, aiming to buy back at least $3 billion in stock by the end of 2025 and complete the remaining $7 billion by the end of 2026.

These projections were initially laid out during AT&T’s 2024 Analyst & Investor Day, which emphasized the company’s focus on infrastructure-driven growth, capital returns, and digital expansion through fiber and 5G convergence.

What Does This Mean for the Broader U.S. Broadband Market?

The acquisition of Lumen’s Mass Markets fiber business by AT&T signals an intensifying race among major telecom players to dominate the U.S. fiber broadband space. With demand for faster and more reliable internet continuing to rise—fueled by remote work, streaming, IoT devices, and the rollout of 5G—fiber infrastructure has become the cornerstone of modern connectivity.

By entering regions previously less saturated by its own infrastructure, AT&T can tap into new consumer bases while applying its proven playbook for service penetration and upselling. The combined offering of AT&T Fiber and 5G wireless services is likely to attract high-value bundled customers and boost retention across product lines.

The transaction also raises questions about the future strategic direction of Lumen Technologies, which has been divesting consumer-facing assets to focus more heavily on enterprise and edge services. Lumen’s decision to offload its Mass Markets fiber business follows a trend seen in other telecom operators seeking to specialize their operational focus amidst growing industry complexity.

Could This Reshape Competition in U.S. Telecom?

The deal could prompt competitive responses from other fiber-focused providers such as Comcast, Charter Communications, and regional players. By absorbing Lumen’s consumer fiber base, AT&T immediately strengthens its position in fiber-rich territories where competitors have yet to establish a stronghold. It may also encourage consolidation or partnerships among smaller players to withstand the scale of investment that telecom giants like AT&T are now deploying.

Meanwhile, the market will be watching closely to see who AT&T selects as its equity partner in NetworkCo. The partner’s profile—whether infrastructure fund, sovereign investor, or strategic telecom ally—could influence the company’s future deployment speed, pricing model, and geographic priorities.

A Long Bet on Fiber, Scale, and Convergence

AT&T’s $5.75 billion acquisition of Lumen’s Mass Markets fiber assets reinforces its long-term conviction in fiber as the backbone of American connectivity. This deal not only extends AT&T’s geographic reach but also demonstrates a structured capital strategy through the NetworkCo model and a forthcoming equity partner. In a market where converged services, customer experience, and infrastructure scale are paramount, AT&T is placing itself at the center of the broadband future.

If executed well, the integration of these assets could accelerate AT&T’s fiber adoption, create efficiencies in buildout, and solidify its reputation as a national leader in both wireless and wired internet services. As consumers increasingly demand higher speeds and bundled services, AT&T is positioning to deliver just that—at scale.