- Lumen is officially selling its fiber-to-the-home biz to AT&T for $5.75B
- Unsurprisingly, it's doing so to double down on enterprise and AI, CEO Kate Johnson told Fierce
- Lumen will retain fiber backbone assets as well as its existing copper network
Turns out the rumors were true. In an announcement after market-close on Wednesday, Lumen confirmed it is selling its Mass Markets fiber-to-the-home business to AT&T for $5.75 billion in cash.
Why now? To absolutely nobody’s surprise, Lumen wants to double down on the booming AI and enterprise fiber space “where we have the right to win,” Lumen CEO Kate Johnson told Fierce today. All told, it's chasing a total addressable market worth more than $80 billion.
The decision to sell off the consumer fiber biz boils down to two key trends, Johnson explained.
“First is, AI has become a mission-critical technology for all enterprise and inherently that requires different capabilities from your network,” she said. “The second trend is really that the demand for consumer fiber and wireless are converging.”
Indeed, major operators - and especially AT&T - have been all about pushing convergence in their offerings. Meanwhile, Lumen in the last year has scored $8.5 billion in AI-driven networking contracts with hyperscalers, which include high-profile customers like Amazon Web Services (AWS), Google Cloud and Microsoft.
So, it's easy to see where Johnson is coming from.
Deal detail
AT&T will acquire approximately 95% of Lumen’s Quantum Fiber business, which consists of nearly 1 million subscribers and about 4 million passings across 11 states.
Lumen will retain the assets that serve “as the foundation of its enterprise transformation,” including all national, regional, state, and metro level fiber backbone network infrastructure, along with central offices and associated real estate. The operator will also keep and maintain its existing copper network that services consumers.
Johnson noted while Quantum Fiber is “incredibly well-run,” AT&T is “uniquely suited” to take it to the next level.
“We were never really going to be the consolidators, and we’ve made that clear to the marketplace,” she said.
AT&T meanwhile has been fairly active in its FTTH rollouts, plus it’s expanding its out-of-footprint fiber network with the Gigapower joint venture build.
Looking ahead
What’s next for Lumen? The company has indicated plans to end 2025 with 17 million intercity fiber route miles, a figure it intends to grow to 47 million miles by 2028. Johnson said Lumen will be increasing the capacity of those miles with “new fiber solutions and new photonics equipment,” most of which is coming from its supply agreement with Corning.
The Mass Markets sale is expected to close in the first half of 2026. Furthermore, it’s poised to bring “financial freedom” for Lumen, she added, enabling the company to reduce its debt by $4.8 billion and slashing the amount of interest it pays annually by $300 million.
“We’re really building a rich ecosystem that allows us to provide new capability to our customers. And we’re going to press the gas pedal on all of that,” Johnson concluded.