Mike Dano, Editorial Director, 5G & Mobile Strategies
March 27, 2025
4 Min Read
According to one report, AT&T is preparing a $5.5 billion bid for Lumen Technologies' consumer fiber operations. If that deal goes through, it would have significant implications for other players in the space – particularly T-Mobile.
"One would have thought the logical buyer for Lumen fiber homes would be T-Mobile who presumably needs to play catch-up," wrote the financial analysts at TD Cowen in a recent note to investors.
But Bloomberg's new report on the possible AT&T/Lumen deal "suggests otherwise," according to the analysts.
They contend that AT&T and Verizon are building "kingdoms" of fiber – areas of the country where they can converge high-speed wireline and wireless connections.And there are clear reasons to do so.
"AT&T and Verizon have touted benefits such as a 400+ pt phone share gain within converged markets, and Verizon noting its phone churn cut in half when converged," the TD Cowen analysts wrote. "Cutting postpaid phone churn in half would illustratively add ~$1,500+ of wireless customer lifetime value (CLV) easily justifying a $1,000 per home build cost on a FTTH [fiber to the home] business case that is already positive as a stand-alone case."
If those calculations are true, AT&T could eventually own a "kingdom" stretching across almost 55 million US homes, including those from Lumen and AT&T's Gigapower joint venture. That's far more than Verizon's 35 million to 40 million fiber homes and T-Mobile's 12 million to 15 million fiber locations.
Related:FiberLight to acquire Metro Fiber Networks
Lumen’s network generally does not overlap AT&T’s network across the country. (Source: Bernstein, based on FCC data)
Not a done deal
But there are plenty of caveats and questions hanging on this convergence argument. The first is the most obvious: AT&T hasn't yet acquired Lumen. It hasn't even made a formal offer.
Indeed, the financial analysts at New Street Research noted that T-Mobile, Verizon and BCE (the Canadian company working to purchase Ziply Fiber) could all make competing bids for Lumen if AT&T's $5.5 billion offer is viewed as too low.
"If [AT&T's] $5.5 billion is all there is to the deal for the assets, then we can't imagine that Lumen's shareholders would be very pleased with the terms," wrote the financial analysts at Bernstein in a recent note to investors.
Beyond that, there are still questions about the overall benefits of merging wireless and wireline services together.
"Where Verizon says they have lower churn where they have fiber, T-Mobile has lower churn where Verizon has fiber. And so you have to be cautious about that kind of causality," explained T-Mobile CEO Mike Sievert at a recent investor event. Sievert said T-Mobile is still unsure about the need to own fiber across wide portions of the country.
Related:T-Mobile Fiber could see 5M customers and $5B in revenue by 2030
The TD Cowan analysts argue that T-Mobile has built a solid 5G business without owning a fiber network.
"Instead of spending billions on expensive fiber, the company [T-Mobile] can focus on the [mobile] network, superior mobile pricing, and capital return for years to come," they wrote.
The T-Mobile story
Even so, T-Mobile is well aware of the possible benefits of a wireless/fiber play.
The company launched its first fiber offering in New York City in 2021 with Pilot Fiber. Since then, it has expanded its T-Mobile-branded fiber offerings to 32 markets across eight states via partnerships with the likes of Tillman FiberCo, SiFi Networks and Intrepid Networks.
More recently, T-Mobile's fiber appetite has grown more serious thanks to its investments in Lumos and Metronet. Lumos is the joint venture (JV) between private equity firm EQT and T-Mobile covering parts of the Mid-Atlantic including North Carolina, Virginia and South Carolina. T-Mobile has a similar agreement with KKR for Metronet to expand Metronet's fiber footprint in parts of 17 states.
Related:The Divide: How federal funds and horses brought broadband to Black Canyon of the Gunnison National Park
T-Mobile is also pursuing federal fiber funding in Louisiana via partnerships with Swyft Fiber and REV, two local fiber operators there.
All those deals could add as many as 15 million homes to T-Mobile's fiber kingdom. But is that enough?
"The risk for T-Mobile is that if convergence is real, losing out on Lumen's homes puts them far behind," wrote the TD Cowen analysts. "In which case [T-Mobile] acquiring Charter's homes would leap-frog them into the leadership position albeit with inferior cable HFC homes."
Hybrid fiber-coaxial (HFC) is the cable Internet technology underpinning Charter Communications' network, but it's considered slower and less capable than fiber. However, Charter's network stretches across 41 states and more than 30 million customers.
Thus, there continues to be widespread speculation that T-Mobile might eventually make a play for Charter.
