Broadband provider T-Mobile entered into a joint venture with EQT’s Infrastructure VI fund to acquire Lumos’ fiber-to-the-home platfrom from EQT’s predecessor fund, EQT Infrastructure III.
This venture will combine T-Mobile’s retail, marketing, brand and CX capabilities with EQT fiber infrastructure investment expertise.
Together, they will acquire the company’s scalable fiber network build capabilities to deliver high-speed fiber internet connectivity to customers across the U.S.. Post transition, Lumos – which covers 320,000 locations across 7,500 route miles in the Mid-Atlantic with fiber optic internet and Wi-Fi services – will transition to a wholesale model. With this, T-Mobile will act as an “anchor tenant,” owning customer relationships and leveraging its brand to attract new subscribers.
Specifically, the joint venture will focus on market identification and selection, network engineering and design, network deployment and customer installation.
“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,” said Mike Sievert, T-Mobile CEO. “Together with EQT and Lumos, T-Mobile is building on our position as the fastest growing broadband provider in the country in a value-accretive way that complements our sustained growth leadership in wireless. Customers – homes and businesses – who get the fast, affordable, and reliable internet they need will be the real winners.”
T-Mobile provides connectivity to homes and businesses across the country through its 5G Internet, a fixed-wireless internet service on its 5G network that is available to more than 50 million households and businesses nationwide, as well as T-Mobile Fiber, which has launched in parts of 16 U.S. markets.
“We are proud to have partnered with Lumos over the past six years to rapidly scale the company and roll out fiber to underserved markets, and we look forward to continuing to leverage EQT’s considerable digital infrastructure and fiber expertise to support the significant fiber buildout ambitions of T-Mobile and the JV,” said EQT Infrastructure advisory team partner, Jan Vesely. “This new effort will build critical fiber broadband infrastructure that will enable remote work, education and healthcare use cases across the country. We have worked with T-Mobile as a customer across many of our existing digital infrastructure investments and are delighted to build on that relationship and partner with T-Mobile on this opportunity to roll out fiber to underserved Americans.”
“Lumos takes great pride in our achievements, as we have successfully delivered fiber to hundreds of thousands of homes and businesses, marking a significant acceleration in our growth. Our commitment to enhancing customers’ lives through the development of a network prepared for the demands of tomorrow remains steadfast,” Brian Stading, CEO of Lumos. “With the support of our private equity partner, EQT, and leveraging the strength of the T-Mobile brand and unrivaled customer experience, Lumos is set to expedite our network expansion. This joint venture will amplify our ability to change lives through the transformative power of fiber optic internet.”
The transaction is expected to close in late 2024 or early 2025, subject to customary closing conditions and regulatory approvals. At closing, T-Mobile is expected to invest approximately $950 million in the JV, acquiring a 50% equity stake and all existing fiber customers, with the funds invested by T-Mobile being used by Lumos for future fiber builds. The next capital contribution by T-Mobile out of an additional commitment of approximately $500 million is anticipated between 2027 and 2028. These combined investments are expected to allow Lumos to reach 3.5 million homes passed by the end of 2028. T-Mobile continues to expect to complete its remaining authorization for share repurchases and dividends in 2024.
EQT Infrastructure VI is expected to be 35-40 percent invested, based on target fund size and subject to customary regulatory approvals.
Click the following for T-Mobile’s and Lumos’ partner programs.
