T-Mobile Moves Deeper Into FTTx Via Multiple JV-backed Acquisitions

T-Mobile has made two inorganic moves to expand its exposure to the last fiber mile. They have enetered into definitive agreements to create two strategic fiber joint ventures to acquire three fiber-to-the-home companies.

They are teaming up with Oak Hill Capital to acquire both Greenlight Networks and GoNetspeed. Greenlight started in upstate New York, and has since expanded into Pennsylvania and Maryland, while GoNetspeed took aim at Pittsburgh and Connecticut. The two companies will be combined into a northeastern-focused FTTx passing 1.3M homes by the end of this year. It’s not T-Mobile’s first FTTx-related deal with Oak Hill of course, acquiring Metronet from them via a JV with KKR two years ago.

Meanwhile, T-Mobile is also forming a JV with Wren House to acquire i3 Broadband. i3 Broadband connects homes and businesses out in Illinois and Missouri and apparently has a presence in Rhode Island as well. By the end of this year the company should pass some 500K homes.

It’s getting harder to dismiss T-Mobile’s growing appetite for last mile fiber, which first emerged in the deal for Lumos a couple years ago. In fact, one possible transaction that has been rumored this month would be an acquisition of the last mile business of Uniti Group, i.e. Windstream’s Kinetic assets.  That was just a rumor with an unclear deal structure, but likely reflected some real talks behind the scenes and could still happen.

But the pattern of T-Mobile’s FTTx interest is becoming clear: don’t bring it directly in-house with the core wireless business, but rather bring in a JV partner to run it at arms length and thereby not kill the golden goose.  They could get pretty far pretty quick with that model in the right environment.

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