AT&T Is In Talks to Buy Lumen’s Consumer Fiber Unit

telcodad

With Verizon announcing its acquisition of Frontier Communications last year, I guess AT&T is trying to keep up:

AT&T Is In Talks to Buy Lumen’s Consumer Fiber Unit
By Gillian Tan, Michelle F Davis, and Liana Baker, Bloomburg - March 25, 2025
https://www.bloomberg.com/news/articles/2025-03-25/at-t-said-in-talks-to-buy-lumen-s-consumer-fiber-unit

Reports: AT&T eyeing Lumen’s broadband unit for $5.5B
Fierce Network - Mar 26, 2025
https://www.fierce-network.com/broadband/reports-att-eyeing-lumens-broadband-unit-55b

AT&T reportedly wants to buy Lumen’s consumer fiber business for $5.5B

This is probably the most likely telecom M&A deal on the horizon, according to New Street Research

It’s unclear whether AT&T plans to acquire just Lumen’s fiber assets or its entire Mass Markets biz, which includes copper

AT&T is reportedly in talks to buy Lumen’s consumer fiber business for $5.5 billion, according to Bloomberg. While the extent of the deal is unclear at this time, the deal is the most likely telecom M&A deal on the horizon according to a note from New Street Research.

Unlike its competitors T-Mobile and Verizon, AT&T thus far hasn’t made much moves in the fiber M&A space. CFO Pascal Desroches in February said, “unlike our peers, we’re not compelled to do anything,” however he didn’t entirely rule out the possibility.

Rumors have been going around since last year that Lumen could offload its Mass Markets unit, as the company pursues growth in AI and the data center space. Lumen CEO Kate Johnson said it plainly in November: it’s difficult to imagine long-term success for Lumen in the traditional telco space.

telcodad

It wouldn’t surprise me if some upper-level AT&T executive is a fan of the popular Apple TV show “Severance” and said he’d like to purchase “Lumon” (and get back the old Bell Labs building in Holmdel, NJ) and some subordinate misunderstood him. 😉

px_eliezer_

Lumen is technically one of the spinoff RBOC (having incorporated Qwest which was the RBOC successor to US West).

Lumen also includes the former Century Telephone which was not a Bell member.

As you know, of the seven RBOC (like the seven dwarfs), two are now Verizon and four are now the reborn AT&T, so Lumen was the odd man out.

Lumen has not been big in cellular, and their local landline areas are pretty stagnant. Lumen already sold off local landline exchanges in 20 states to Brightspeed which is a new company.

It may be that fiber is their biggest remaining asset…?

If Lumen sells fiber (etc) to AT&T:

1) It’s getting close to the final act of the former Bell System re-monstering into just the two big players, Verizon and AT&T/2.0

2) From Lumen’s POV, it may be not so much a sale of assets, but rather a merger into AT&T. Because as I said, what remains of Lumen afterward may be a “Rump state”.
https://en.wikipedia.org/wiki/Rump_state

Man-of-Leisure

px_eliezer_ 1) It’s getting close to the final act of the former Bell System re-monstering into just the two big players, Verizon and AT&T/2.0

From Colbert in 2006-2007 lol

px_eliezer_

Man-of-Leisure

Indeed, and it’s gotten far more complicated since then.

One reason I regret the shutdown of DSL Reports was the loss of my commentary on the VERY SMALL Bell System company, Malheur Bell which basically served just ONE COUNTY in Oregon.

As these folks observe:

On December 14, 2009, Malheur Bell was merged into its corporate parent, (by then) Qwest Corporation, which was purchased by CenturyLink in 2010. Malheur Bell was the last remaining formerly Bell System company that continued to use the Bell logo in its official corporate logo.

https://www.telcomhistory.org/resources/online-exhibits/telephone-company-histories/malheur-home-telephone-company/

The re-merging of all these companies is very parallel to the re-merging of the pieces of Standard Oil.

When Bell Atlantic (largely identified with New Jersey) merged with NYNEX (largely identified with New York) in 1997, that paralleled the merger of Standard Oil of New Jersey (Esso/Enco/Carter…) with Standard Oil Company of New York (Mobil) into Exxon-Mobil.

(BA + NYNEX + GTE - some other stuff = Verizon).

Man-of-Leisure

px_eliezer_ I doubt they will ever fully merge back together.

I see no scenario where Verizon and AT&T would be allowed to merge unless one of the two suddenly starts struggling heavily for some reason and is at risk of going out of business. But that seems unlikely.

Though it is funny to me that Verizon sold a bunch of assets to Frontier like 15 years ago and are now buying them back lol

iahawkeye83

That might mean that AT&T might have a presence in Iowa which is former Qwest/Century link territory.

px_eliezer_

Man-of-Leisure I doubt they will ever fully merge back together.

Oh, agreed.

But it is interesting…

It’s ironic that the original breakup court decision came BEFORE cell phones were really a thing.

If the antitrust ruling were to be done today, it would have to look at the cellular side, as well as the original issues of calling competition (both local and long-distance) and equipment ownership (Western Electric etc),

MacLeech

Man-of-Leisure

Man-of-Leisure I see no scenario where Verizon and AT&T would be allowed to merge unless one of the two suddenly starts struggling heavily for some reason and is at risk of going out of business. But that seems unlikely.

But they don’t compete directly in wireline since they in different physical footprints, just like Comcast and Charter, which you seem to have no problem with being allowed to merge.

Man-of-Leisure

MacLeech But they don’t compete directly in wireline since they in different physical footprints, just like Comcast and Charter, which you seem to have no problem with being allowed to merge.

They certainly do compete in wireless, which is why any attempted merger would be blocked unless one of the two were on the verge of bankruptcy or something.

AT&T tried buying T-Mobile in 2011 and it was blocked.

T-Mobile/Sprint was eventually approved after several years, with concessions. Though they were both much smaller than AT&T and Verizon and had trouble competing on their own.

Charter and Comcast don’t operate wireless networks of any meaningful size, and their wired networks don’t overlap.

See Shaw and Rogers in Canada, same thing.

I expect Verizon/Frontier to be approved also, since they don’t overlap.

AT&T/Lumen should also be approved, since they don’t overlap.

The remaining small ISPs will likely be acquired over the years also.

Man-of-Leisure

MacLeech I see no scenario at least in the next 10-20 years where the government would allow the US to go from 3 to only 2 or 1 wireless carriers.

Never say never, and I’ll hopefully be around for another 50-60 years so we’ll see.

We did have AT&T as a telephone monopoly for nearly 100 years before it was broken up, so I guess anything is possible.

Who knows how the world will look that far in the future.

There is a finite amount of wireless spectrum, so theoretically I could see the need for more consolidation farther in the future. But that’s decades away.

telcodad

Is AT&T building a “kingdom” of fiber?

Losing Lumen to AT&T could doom T-Mobile
T-Mobile has made clear its interest in fiber, mainly through its investments in Lumos and Metronet. And that’s why AT&T’s rumored play for Lumen could create trouble for T-Mobile.
By Mike Dano, Light Reading - March 27, 2025

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: https://www.reuters.com/markets/deals/att-talks-buy-lumens-consumer-fiber-unit-bloomberg-news-reports-2025-03-25/

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: https://www.lightreading.com/network-platforms/at-t-vs-verizon-who-s-leading-the-convergence-race-

“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. ….