T-Mobile pulled the trigger on a deal to form a joint venture (JV) with investor company EQT to acquire US-based FTTH provider Lumos Networks and further expand beyond its mobile-based broadband service.

T-Mobile will invest $950 million in the JV to acquire a 50 per cent equity stake when it closes, with the funds being used by Lumos for future fibre buildouts. The operator is slated to add an additional capital infusion of $500 million between 2027 and 2028.

EQT Infrastructure VI is expected to be 35 per cent to 40 per cent invested in the JV. The companies stated the investments will enable Lumos to extend its fibre reach to 3.5 million homes by end 2028.

The operator has dabbled in fibre-based broadband dating back to 2021 by partnering with providers who have open access networks. Through various partnerships, the operator has launched T-Mobile Fibre in parts of 16 markets.

Lumos currently reaches more than 320,000 homes over 7,500 route miles with fibre-based internet and home Wi-Fi across three US states.

“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,” stated T-Mobile CEO Mike Sievert.

With the JV, T-Mobile could be in line to receive a portion of the $42.45 billion in government funding from the Broadband Equity Access and Deployment (BEAD) government programme to expand high-speed internet access across US states.

When the transaction closes later this year or early 2025, Lumos will transition to a wholesale fibre company with T-Mobile as its primary tenant. The operator will take over Lumos’ customer relationships and use its brand to attract new customers.

The companies stated the JV will focus on market identification and selection, network engineering and design, network deployment, and installations.

T-Mobile rival AT&T struck a JV agreement with private equity firm BlackRock Alternatives in late 2022 to build out fibre beyond its traditional 21-state footprint.

AT&T CEO John Stankey stated on the company’s Q1 earnings call yesterday (24 April) that fibre expansion remains one of its top priorities.