T-Mobile, EQT unveil fiber JV, with plans to acquire Lumos

  • T-Mobile and EQT announce joint venture to expand the carrier’s fiber broadband footprint

  • As part of the deal, the companies will acquire Mid-Atlantic FTTH provider Lumos

  • T-Mobile will invest an initial $950M in the JV, plus another $500M sometime between 2027-28

T-Mobile announced today it entered a joint venture with investment firm EQT to build out the carrier’s fiber broadband footprint. To that end, they will acquire fiber-to-the-home provider Lumos.

News of the JV doesn’t come as much of a surprise. In March, German news outlet Handelsblatt reported T-Mobile was mulling a JV that would initially focus on building fiber in Virginia, and Lumos was mentioned as a possible partner.

According to a press release, the JV will focus on market identification and selection, network engineering and design, network deployment and customer installation. Lumos will transition to a wholesale model, with T-Mobile as anchor tenant.

T-Mobile and EQT’s transaction is expected to close in late 2024 or early 2025, subject to customary closing conditions and regulatory approvals. Once the deal closes, T-Mobile plans to invest $950 million in the JV to acquire a 50% equity stake as well as all of Lumos’ existing fiber customers.

A T-Mobile rep told Fierce Lumos "will continue to operate with the same leadership, process and partners so it can continue to run network deployment and operations," while T-Mobile will take on the company's sales and marketing functions.

Lumos, which currently serves 320,000 households across North Carolina, South Carolina and Virginia, intends to use the funds invested by T-Mobile to reach 3.5 million homes passed by the end of 2028.

As for the JV itself, the T-Mobile spokesperson said it doesn't have a specific long-term passings goal to share just yet. 

"The joint venture plans to sequentially approach the U.S. fiber opportunity through designated market clusters across the U.S. by leveraging Lumos’ robust and highly scalable processes. Exact markets will be determined over time," said the T-Mobile rep.

In addition to its initial $950 million investment, T-Mobile plans to invest another $500 million sometime between 2027 and 2028.

So far, T-Mobile has launched fiber service in parts of 16 markets. It’s done so by partnering with open access network operators like Intrepid Fiber, SiFi Networks and Tillman FiberCo.

Analysts at New Street Research said T-Mobile’s $950 million investment for a 50% stake equates to over $9,000 per existing location, which suggests “a very healthy outlook for fiber assets that have a strong growth trajectory.”

“While we would view the agreement as a smart move by T-Mobile, the JV will only reach 2-3% of US households by 2028, which is far from enough to move the needle,” they said. “If convergence proves critical, we would expect bigger deals in future.”

Fierce reached out to Lumos for comments but had not received a reply as of press time. 

However, a source close to the company sent Fierce the following internal company memo:


I'm thrilled to announce that Lumos, along with the support of our current private equity owner EQT and new owner T-Mobile, will form a collaborative joint venture. This partnership marks a significant step forward in our ability to expand our reach to households and businesses, leveraging the strength of the T-Mobile brand and its dedication to exceptional customer service.

What comes next? Following the signing of the agreement, there's an interim period (designed to obtain required regulatory approval) before the transaction is officially complete. During the interim period, there will be no changes to how Lumos operates today.

Today marks the beginning of the interim period. Over the coming months, teams from Lumos, T-Mobile, and EQT will work together to outline the operational framework for post-close, which we anticipate being in the fourth quarter of 2024, subject to customary legal and regulatory approvals.

Later today, I'll host two town hall sessions to provide additional details and address any questions you may have. Additionally, we'll distribute an FAQ to all employees.

This announcement marks a major milestone in the convergence of the fiber and wireless industries, and I want to express my sincere appreciation to all our dedicated employees. Your unwavering commitment to Lumos and our customers has made this opportunity possible!

This is truly an exciting time for Lumos and our future.

Warm Regards,

Brian Stading

Chief Executive Officer

At press time, T-Mobile (TMUS • NASDAQ) stock was trading at $162.86, down 0.80%.

This is a developing story.