Telecom operator Lumen Technologies has officially announced the sale of its fiber to the home business to AT&T for $5.75 billion in cash. Lumen CEO Kate Johnson told the media that this move is to focus resources on developing the enterprise and AI business areas, and the company will continue to retain its fiber backbone network assets and existing copper cable network.

According to the transaction details, AT&T will acquire approximately 95% of Lumen’s Quantum Fiber business assets, including nearly 1 million users and approximately 4 million coverage points in 11 states. The portion retained by Lumen includes national, regional, state, and metropolitan fiber optic backbone network infrastructure, as well as central data centers and related real estate. The existing copper cable network serving consumers will also continue to be operated by Lumen.

Johnson explained that the decision to sell stems from two major trends: “Firstly, AI has become a critical task technology for enterprises, which requires networks to have different capabilities; Secondly, consumer demand for fiber optic and wireless is merging. Over the past year, Lumen has secured $8.5 billion in AI networking contracts from super large scale clients including AWS, Google Cloud, and Microsoft.

AT&T stated that this acquisition will significantly expand its fiber optic coverage in major metropolitan areas such as Denver, Las Vegas, Minneapolis Saint Paul, Orlando, Phoenix, Portland, Salt Lake City, and Seattle. The company plans to increase the total number of fiber optic coverage points to approximately 60 million by the end of 2030, doubling its current scale.

AT&T Chairman and CEO John Stankey stated, “This transaction is an important investment in critical connectivity infrastructure in the United States, which will create employment and stimulate economic activity in multiple regions.” After the acquisition is completed, former Lumen users will gradually become AT&T Fiber customers, enjoying services including multiple gigabit speeds, built-in security features, and optimal home coverage.

The transaction is expected to be completed in the first half of 2026 and requires approval from the US Department of Justice. AT&T plans to introduce equity partners after the transaction to jointly invest in the newly established subsidiary, NetworkCo. The company will operate as a wholesale commercial open access platform, with AT&T as the primary tenant to continue serving existing customers.

For Lumen, this transaction will reduce the company’s debt by $4.8 billion and save $300 million in annual interest expenses. Johnson stated that the company plans to expand intercity fiber optic lines to 17 million miles by the end of 2025 and increase to 47 million miles by 2028, while also enhancing network capacity through a partnership agreement with Corning.

AT&T emphasized that the transaction will not change its 2025 financial and operational guidelines, and the company still plans to complete at least $3 billion in stock buybacks by 2026 in accordance with the previously announced $10 billion stock buyback authorization. The impact on the company’s adjusted EBITDA, earnings per share, and free cash flow will be limited within 12-24 months after the completion of the transaction, and will have a value-added effect in the long run.