Lumen Eyes $6B Sale Of Consumer Business To AT&T Amid Turnaround Plan

‘We are sharpening our focus on enterprise customers,’ Lumen CEO Kate Johnson says.

Lumen Technologies aims to push further into enterprise technology with a $5.75 billion cash sale of its 11-state mass market fiber-to-home business to AT&T, a deal set to close in the first half of 2026.

The Monroe, Louisiana-based telecommunications vendor will retain the core infrastructure used for enterprise customers, according to a statement Wednesday. AT&T will get about 95 percent of Quantum Fiber, about 4 million fiber locations and about 1 million subscribers. Lumen will keep enterprise fiber customers and mass market copper-based customers.

“We are sharpening our focus on enterprise customers, and this transaction enhances our financial flexibility, enabling us to reimagine networking for enterprises in a multi-cloud, AI-first world,” said Kate Johnson, president and CEO of Lumen, in a statement.

She added that “Lumen has a once-in-a-generation opportunity to build a digital networking company that will serve the needs of enterprise customers. Today, that’s in support of AI, and on the horizon, it’s quantum computing. This strategic decision is grounded in the expansive critical infrastructure we’re retaining and the forward-thinking digital future we’re building.”

AT&T Buys Lumen Business

For AT&T, the deal expands the communities the vendor serves and the number of AT&T Fiber subscribers, who will be migrated from Lumen “over time,” the company said in a statement Wednesday. The company aims to double AT&T Fiber availability by the end of 2030, reaching 60 million total fiber locations.

“We’re leading the race to connect more Americans with fiber, the best broadband connectivity technology available,” said John Stankey, AT&T’s chairman and CEO. “This deal with Lumen represents a significant investment in U.S. connectivity infrastructure that will create jobs and spur economic activity in numerous regions and major metro areas.”

CRN has reached out to Lumen and Dallas-based AT&T for comment.

Lumen’s 2025 channel goals include increasing the overall percentage of company revenue that comes through the channel and increasing partners’ customer satisfaction ratings, according to CRN’s Channel Chiefs.

AT&T’s 2025 channel goals include improving partner profitability and increasing the amount of net new accounts coming through partners, according to CRN’s Channel Chiefs.

The AT&T-Lumen deal notably comes days after federal regulators approved Verizon’s $20 billion deal to buy broadband provider Frontier Communications, according to NPR.

AT&T Fiber Boost

The deal expands AT&T’s footprint in Florida, Denver, Las Vegas, Minneapolis, Phoenix, Salt Lake City and other areas, according to the company’s Wednesday statement.

The vendor doesn’t expect the deal to have a material impact to its earnings before interest, taxes, depreciation and amortization (EBITDA) and free cash flow in the 12 to 24 months after the deal closes. But it should be accretive in the long run, and AT&T maintains its full-year 2025 financial outlook.

In April, the vendor reported total operating revenue for the first fiscal quarter of $30.63 billion, an increase of 2 percent from $30.03 billion in the same quarter one year earlier.

AT&T expects to get access to Lumen’s fiber construction capabilities in its incumbent local exchange carrier (ILEC) footprint and accelerate fiber building pace. The vendor also plans to offer 5G wireless and fiber broadband connectivity within the new fiber footprint to increase its base of converged customers and drive gains in the mobility business.

AT&T will form a subsidiary called NetworkCo to hold the purchased fiber network deployment capabilities and assets. The vendor wants to eventually sell part of NetworkCo to an equity partner that will co-invest in the business. AT&T plans to identify that equity partner and close a deal in about 6 to 12 months after the Lumen deal closes.

NetworkCo will operate as a wholesale commercial open access platform with fiber access services to AT&T as the anchor tenant. Lumen mass markets fiber customers will stay with AT&T.

Lumen will give AT&T field operations, network deployment, IT system, billing, customer support and other services for about two years after the deal closes to help with the transition.

Lumen Pays Down Debt

Lumen expects to net about $4.2 billion from the deal and use that money plus cash on hand to pay down superpriority debt of about $4.8 billion. This will reduce its interest expense by about $300 million a year and reduce its net debt to earnings ratio, according to the statement.

During last year, the vendor reduced its debt load by $1.6 billion and completed a $15 billion debt modification, one of the largest private debt restructurings of its kind.

The vendor also expects to save about $1 billion a year by selling the mass markets business. Lumen is committing to “a similar pace” of year-over-year fiber enablement buildouts through the end of 2025. Lumen plans to reach 47 million intercity fiber miles by 2028 and continue scaling its Lumen Digital platform for business networking services.

Lumen will keep its national, regional, state and metro level fiber backbone network infrastructure, central offices and associated real estate–all of which the vendor will leverage for serving enterprises. All Lumen enterprise and wholesale fiber customers stay with the vendor. Lumen will also retain and care for its existing copper network, which is mostly for consumer customers.

Earlier this month, Lumen CEO Johnson told CRN about pivoting away from traditional telecommunications services.

“Leaning into where everybody inside of an industry that hasn’t innovated in a long time is skating to is probably the wrong orientation,” she said. “We are pivoting, and we are maniacally focused on our customer success, and we define our success and our transformation as to whether or not we served the companies that we do business with and helped them be successful. And what we’re hearing from them is that the networks of yesterday don’t serve this multi-cloud, AI-first world.”

The vendor reported first fiscal quarter earnings May 1, revealing total revenue of $3.18 billion, which represented a decline of 3.3 percent compared to $3.29 billion in the year-ago period. The company reported a net loss of $201 million for its most recent quarter, compared to net income of $57 million for the same period a year before.

Lumen’s stock traded at about $4 a share Wednesday after market close, up about 11 percent. AT&T’s stock was about flat at around $28 a share.

Other recently announced acquisitions in the channel include Palo Alto Networks’ deal for Protect AI, Proofpoint’s $1 billion Hornetsecurity acquisition and Fivetran’s deal to buy Census.