T-Mobile Makes a Play for FTTH

What exactly is T-Mobile up to? Last week the mobile network operator hopped the fence and invested in something that isn’t, well, mobile. They teamed up with the money guys at EQT to form a joint venture to acquire Lumos from EQT in a move that suggests a bigger long term plan.

Lumos operates a fiber-to-the-home footprint in Virginia and the Carolinas, with some 7,500 route miles of fiber network passing 320K homes. It was once the residential part of Lumos Networks, the wholesale and enterprise piece of which was merged with Spirit to become Segra and is now part of the Cox Communications portfolio. That piece of Lumos merged with NorthState back in 2020.

T-Mobile and Lumos don’t really have any network synergies to speak of. But what T-Mobile seems to have recognized is that neither FTTH nor 5G are going anywhere, they will be the core of the access world for the foreseeable future and their futures are interrelated. Just where this stake in Lumos will go from here is uncertain, but if nothing else T-Mobile will have at least a toe on the other side of the fence. In the short term though what they have is an investment in a growing sector whose economics are only improving with time.  If there are ways to bundle or market the combination favorably, they now have somewhere to test the waters.

But perhaps the the more audacious plan could be to turn it into a platform for consolidation in the FTTH space. After all, what do Verizon and AT&T have that T-Mobile does not? Well now they have a little, and without as much legacy baggage perhaps and a high profile brand to leverage. 

After all, EQT could have just cashed out entirely.  Or they could have just kept rolling on the regional FTTH path — there are still plenty of markets for Lumos to expand that fiber into.  But as part of a JV with a national brand as big as T-Mobile, a roll-up of assets seems like an increasingly viable third path for the kind of substantial investments EQT are always looking to make.

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Categories: FTTH · Mergers and Acquisitions · Wireless