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T-Mobile and EQT have entered a joint venture (JV) that will acquire fiber-to-the-home platform Lumos from EQT’s predecessor fund EQT Infrastructure III.

“As the demand for reliable, low-latency connectivity rapidly increases, this deal is a scalable strategy for T-Mobile to take a significant step forward in expanding on our broadband success and continue shaking up competition in this space to bring even more value and choice to consumers,” said Mike Sievert, CEO of T-Mobile. “Together with EQT and Lumos, T-Mobile is building on our position as the fastest growing broadband provider in the country in a value-accretive way that complements our sustained growth leadership in wireless. Customers – homes and businesses – who get the fast, affordable, and reliable internet they need will be the real winners.”

As a background context, T-Mobile offers reliable connectivity to homes and businesses nationwide through its 5G Internet, serving over 5 million customers and available to more than 50 million households and businesses. Additionally, T-Mobile Fiber is already operational in parts of 16 US markets.

Post-Acquisition Benefits

The joint venture combines T-Mobile's retail, marketing, brand, and customer experience prowess with EQT's expertise in fiber infrastructure investment. By joining forces, they will acquire Lumos' scalable fiber network construction capabilities, aiming to provide top-notch high-speed fiber internet access to customers throughout the US who currently lack fiber connectivity.

Jan Vesely, partner within EQT’s Infrastructure Advisory Team said, “This new effort will build critical fiber broadband infrastructure that will enable remote work, education, and healthcare use cases across the country. We have worked with T-Mobile as a customer across many of our existing digital infrastructure investments and are delighted to build on that relationship and partner with T-Mobile on this opportunity to roll out fiber to underserved Americans.”

After the transaction, Lumos, serving 320,000 households across 7,500 route miles with fiber optic internet and home wi-fi in the Mid-Atlantic, will switch to a wholesale model. T-Mobile will be the main customer, managing relationships and using its brand to draw in new subscribers. The joint venture will concentrate on market selection, network engineering, deployment, and customer installation.

From his point of view, Brian Stading, CEO of Lumos expressed, “With the support of our private equity partner, EQT, and leveraging the strength of the T-Mobile brand and unrivalled customer experience, Lumos is set to expedite our network expansion. This joint venture will amplify our ability to change lives through the transformative power of fiber optic internet.”

The transaction is slated to conclude in late 2024 or early 2025, pending customary closing conditions and regulatory approvals. T-Mobile plans to invest around USD 950 million in the joint venture to acquire a 50% equity stake and existing fiber customers, with these funds earmarked for Lumos' future fiber builds.