Fibre fever: T-Mobile splashes $4.9bn on JV to acquire Metronet

• Telcos are increasingly striving to deploy fibre networks
• Having just entered the fixed broadband market, T-Mobile is now aiming to beef up its position with a new JV deal with KKR
• The new venture will acquire US fibre company Metronet, as T-Mobile looks to expand its reach

T-Mobile is looking to further solidify its presence in the fibre market, and has unveiled plans to invest $4.9bn in a 50% stake of a new venture that will acquire US fibre player Metronet.

The US operator announced it has agreed a deal with global investment company KKR that will see the duo create a joint venture (JV) that will, in turn, acquire Metronet, including its broadband infrastructure, residential fibre business operations and existing customers.

As part of the deal, the JV will also take over Oak Hill Capital’s existing stake in Metronet. Oak Hill Capital will then reinvest to take a minority position, while Metronet founder John Cinelli will also retain a minority position upon closure of the transaction, which is expected to happen in 2025.

According to T-Mobile, Metronet is “the fastest-growing pure play fibre company in the US”, with its network covering more than two million homes and businesses across 17 states. It is expected to pass 6.5 million households by the end of 2030.

Once the deal is finalised, Metronet will become a wholesale services provider for its retail customers, while all of its residential fibre retail operations and customers will transition to T-Mobile.

The US telco will be responsible for residential customer acquisition and support, and with a view to expanding its presence in the fibre market, it plans to leverage its “differentiated retail, marketing, brand and service model”, as well as use Metronet’s “deep digital and fibre infrastructure”.

Meanwhile, Metronet is expected to self-fund its building plans, network engineering and design work, network deployment and customer installation.

T-Mobile CEO Mike Sievert described the move as “a smart, capital-efficient deal” to help it “build on our success in broadband”. “Metronet is the perfect partner for T-Mobile as a leader in fibre solutions with an incredibly fast build pace, and a top-notch management team”, he noted, adding that KKR’s “strong heritage of corporate partnership” and global fibre franchise, will expand T-Mobile’s fibre footprint.

Waldemar Szlezak, KKR partner and global head of digital infrastructure, emphasised that the new JV will be “transformational for the future of the Metronet business”.

This is the second move by T-Mobile in the fibre broadband market this year after making an entry in April with the establishment of another JV alongside private equity company EQT’s Infrastructure VI fund that will buy fibre-to-the-home (FTTH) platform Lumos.

The US telco’s fibre business will add to its fixed wireless access (FWA) offering, which it claims is being used by more than 5 million premises across the US, using network capacity over its 5G network.

Operators worldwide are increasingly striving to provide fibre broadband services and meet growing demand by boosting their portfolio through various partnerships and acquisitions. Yesterday, MásOrange and Vodafone Spain announced initial plans to create a fibre JV that will also see a third-party investor added to the mix – see MásOrange and Vodafone Spain agree terms on a fibre JV.

Other moves include the fibre JV Glasfaser Nordwest established with Deutsche Telekom and energy supplier EWE in Germany; the Austrian fibre-to-the-home (FTTH) JV Alpen Glasfaser, co-owned by Deutsche Telekom’s local operation, Magenta Telekom, and French investment firm Meridiam; and the FTTH JV formed by Vodafone and Altice in Germany.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV