T-Mobile and EQT forge JV to expand fiber internet access in U.S.

T-Mobile, recognized as America’s leading 5G provider and the fastest growing broadband provider, along with EQT, a global investment organization, announced the formation of a joint venture (JV) with EQT Infrastructure VI fund. This strategic initiative will acquire the fiber-to-the-home platform Lumos from EQT Infrastructure III, marking a significant move to expand high-speed fiber internet connectivity across the United States, particularly in areas currently lacking access.

The joint venture aims to merge T-Mobile’s strengths in retail, marketing, brand, and customer experience with EQT’s expertise in fiber infrastructure investment. This collaboration will acquire Lumos, which currently serves 320,000 households across 7,500 route miles with its fiber optic internet and home Wi-Fi service in the Mid-Atlantic region. Post-acquisition, Lumos will shift to a wholesale model, with T-Mobile acting as the anchor tenant that will own customer relationships and use its brand to draw new subscribers.

The joint venture will concentrate on market identification and selection, network engineering and design, network deployment, and customer installation. This strategic alignment is designed to address the growing demand for reliable, low-latency internet connectivity and to capitalize on the expanding broadband market.

Mike Sievert, CEO of T-Mobile, emphasized the significance of this venture: “As the demand for reliable, low-latency connectivity rapidly increases, this deal is a scalable strategy for T-Mobile to take a significant step forward in expanding on our broadband success and continue shaking up competition in this space to bring even more value and choice to consumers.” He highlighted that the real winners of this initiative would be the homes and businesses gaining access to fast, affordable, and reliable internet.

Jan Vesely, Partner within EQT’s Infrastructure Advisory Team, commented on the partnership’s potential, noting, “This new effort will build critical fiber broadband infrastructure that will enable remote work, education, and healthcare use cases across the country.”

T-Mobile is set to invest approximately $950 million to acquire a 50% equity stake in the joint venture during the transaction’s expected close in late 2024 or early 2025. This investment will support Lumos’s future fiber builds, with additional commitments from T-Mobile projected between 2027 and 2028, aiming to expand the network to 3.5 million homes by the end of 2028.

With this transaction, EQT Infrastructure VI fund anticipates being 35-40% invested, which includes closed or signed investments and announced public offers, pending customary regulatory approvals.

This joint venture between T-Mobile and EQT through the acquisition of Lumos underscores a strategic expansion in the U.S. broadband sector, focusing on enhancing fiber optic internet access in underserved areas. It represents a forward-looking approach to meeting the increasing demands for high-speed internet, critical for modern remote functionalities like work, education, and healthcare. This initiative is poised to transform connectivity landscapes and foster long-term economic and social growth in the regions it serves.