AT&T’s proposed acquisition of a fiber company could have significant implications for T-Mobile.
T-Mobile might be the dominant player in the Fixed Wireless Access (FWA) market, but it doesn’t have an organic fiber network. Fiber internet is superior to FWA in terms of speed, which explains why T-Mobilewants to buy fiber companies Metronet and Lumos. AT&T, on the other hand, operates America’s largest fiber network and is poised to increase its footprint with an acquisition. This represents a missed opportunity for T-Mobile.
T-Mobile offers fiber services through partnerships with fiber-optic network owners and its planned acquisitions could help it reach 15 million households.
Bloomberg recently reported that AT&T was interested in purchasing Lumen Technologies consumer fiber operations for more than $5.5 billion. Bundling wireless and fiber services, which is known as convergence, helps companies retain customers – or lower churn – and gives them more pricing leverage.
TD Cowen analysts believe that AT&T’s rumored purchase of Lumen could have serious implications for rivals such as T-Mobile. Considering T-Mobile is behind AT&T, it might have made more sense for T-Mobile to acquire Lumen.
AT&T and Verizon are said to be building kingdoms of fiber: areas of the US where they provide both wireline and wireless connections.
