T-Mobile Joins the Fiber Fray with Lumos Joint Venture Deal

Summary

T-Mobile has officially entered the fiber broadband market through a $1.45 billion joint venture with EQT to acquire Lumus Networks. This move, driven by T-Mobile's success in fixed wireless access, allows the company to establish its own fiber customer base while avoiding the costs of building infrastructure. The joint venture aims for 3.5 million fiber-to-the-home passings by 2028, primarily in the Mid-Atlantic region. This strategy mirrors AT&T's partnership with BlackRock, highlighting a trend towards open access networks, which could increase competition and potentially lower prices for consumers.

Takeaways

• 😀 T-Mobile has entered the fiber broadband market through a joint venture with EQT, acquiring Lumus Networks.
• 😀 The joint venture is valued at $1.45 billion, with T-Mobile contributing $950 million upfront and the rest in 2024-2025.
• 😀 Lumus Networks currently serves areas in North Carolina, South Carolina, and Virginia, expanding T-Mobile's fiber footprint into new regions.
• 😀 T-Mobile aims to reach 3.5 million fiber-to-the-home passings by 2028, leveraging its existing fixed wireless success.
• 😀 The company has over 5 million fixed wireless access customers and aims to grow this number to 7-8 million by 2025.
• 😀 The move allows T-Mobile to own fiber customers rather than just being a tenant on open access networks.
• 😀 Analysts note that large-scale open access models could disrupt the broadband industry by increasing competition.
• 😀 T-Mobile's strategy emphasizes selling excess capacity without compromising its mobile network service.
• 😀 The joint venture could lead to lower prices in the market due to increased competition among service providers.
• 😀 T-Mobile plans to differentiate itself by offering additional services and quality customer support over its fiber network.

Q & A

What significant step is T-Mobile taking in the fiber business?

T-Mobile is entering the fiber business through a 50-50 joint venture with EQT, acquiring Lumis Networks for $1.45 billion.

What was T-Mobile's approach to fiber before this joint venture?

Previously, T-Mobile downplayed its fiber ambitions, focusing on capital-light approaches and participating in open access networks without owning the infrastructure.

How will the joint venture with EQT impact T-Mobile's customer base?

Through this joint venture, T-Mobile will gain access to Lumis Networks' existing fiber customers, expanding its reach into new markets.

What is the goal for fiber passings by 2028 according to the joint venture?

The joint venture aims to reach 3.5 million fiber-to-the-home passings by the end of 2028.

In which states does Lumis Networks currently provide service?

Lumis Networks provides fiber internet services in North Carolina, South Carolina, and Virginia.

What concerns do analysts have regarding open access networks?

Analysts are concerned that open access networks may lead to lower prices and increased competition, potentially affecting service quality.

What distinguishes an open access network from traditional infrastructure?

An open access network allows multiple service providers to compete over a single infrastructure, reducing redundancy and promoting competition.

How many fixed wireless access customers does T-Mobile currently have?

T-Mobile has over 5 million fixed wireless access customers.

What strategy does T-Mobile employ to manage its fixed wireless access offerings?

T-Mobile aims to sell excess capacity in areas where mobile usage does not fully utilize their available spectrum.

What services might T-Mobile provide over the Lumis network?

T-Mobile may provide various services, including marketing partnerships, customer service, and bundled offerings like discounts on streaming services.