AT&T's Strategic Move: Acquiring CenturyLink's Fiber Business for $5.75 Billion

In a significant development poised to reshape the U.S. broadband landscape, AT&T has announced a definitive agreement to acquire the consumer fiber broadband business of Lumen Technologies, formerly known as CenturyLink. The all-cash deal, valued at a substantial $5.75 billion, is a clear indicator of AT&T's aggressive push into the high-speed fiber market and Lumen's strategic pivot towards its enterprise services.

The transaction, which is subject to regulatory approvals, is anticipated to close during the first half of 2026. Upon completion, AT&T will gain approximately 1.1 million existing fiber customers across 11 states: Arizona, Colorado, Florida, Idaho, Iowa, Minnesota, Nebraska, Nevada, Oregon, Utah, and Washington. More importantly, the deal provides AT&T with access to network areas that encompass over 4 million fiber-enabled locations, offering considerable room for future growth and expansion.

A Deep Dive into the Deal's Scope

The acquisition is not merely about customer numbers; it's a strategic play for infrastructure and market positioning. AT&T is acquiring the fiber-to-the-premises (FTTP) assets and operations that serve residential and small business customers under the CenturyLink brand within these specific territories. This includes the underlying network infrastructure, customer relationships, and potentially key personnel involved in the consumer fiber operations.

For AT&T, this deal represents an acceleration of its existing fiber deployment strategy. The company has been heavily investing in building out its own fiber network, recognizing fiber as the future-proof technology for delivering high-speed internet services capable of meeting ever-increasing bandwidth demands. As reported by Ars Technica, AT&T currently serves 9.6 million fiber customers out of a total broadband base of 14.1 million. This acquisition will immediately boost its fiber subscriber count and, crucially, provide access to new geographic markets and construction capabilities within Lumen's incumbent local exchange carrier (ILEC) footprint.

AT&T stated in its press release regarding the transaction that gaining access to Lumen's substantial fiber construction capabilities in these areas will enable it to accelerate its own build pace. This aligns with AT&T's ambitious target to reach approximately 60 million total fiber locations by the end of 2030, effectively doubling its current fiber footprint.

Lumen's Strategic Pivot: Focusing on the Enterprise

While AT&T is doubling down on consumer fiber, Lumen Technologies is moving in the opposite direction. The sale of its consumer fiber division is a decisive step in Lumen's broader strategy to streamline its business and concentrate on its core strengths: serving large enterprises and government customers with high-bandwidth connectivity, network services, and IT solutions. Lumen's investor overview highlights this focus on delivering advanced network solutions to businesses.

Lumen inherited a complex mix of assets from its legacy as CenturyLink, including a vast network of both modern fiber and aging copper infrastructure serving both consumer and enterprise markets. Managing and investing in both segments has proven challenging. By divesting the consumer fiber assets, Lumen aims to free up capital and resources to invest more heavily in its enterprise network, which includes significant fiber assets dedicated to business customers, and develop specialized services for this lucrative market.

The deal is notable for what it excludes. Lumen will retain its enterprise fiber customers and the extensive network infrastructure that serves them. This is a critical distinction, as the enterprise market typically offers higher revenue per user and longer-term contracts compared to the consumer segment. Lumen is clearly signaling its intent to be a major player in the business-to-business connectivity space.

The Fate of CenturyLink's Copper Customers

One of the most significant implications of this deal, particularly for existing Lumen customers, concerns those still relying on the older copper-based DSL service. The transaction explicitly states that Lumen will retain the CenturyLink consumer copper broadband and voice services. This separation of fiber and copper assets within the consumer division raises concerns about the future of the copper network.

As noted in the Ars Technica report, the deal seems unlikely to improve matters for CenturyLink copper users. Lumen's decision to sell off its consumer fiber business makes it abundantly clear that its strategic focus is no longer on the residential mass market, especially the legacy copper base. Lumen's first-quarter 2025 results indicated that there were still nearly 1.4 million CenturyLink copper internet customers. These customers, often in rural or less densely populated areas, may see continued degradation of service quality and limited prospects for upgrades as Lumen prioritizes investment elsewhere.

While the CenturyLink brand name is still used for home internet service, the company's official name is Lumen. The divestiture reinforces the idea that the consumer side, particularly the copper portion, is becoming a non-core asset for Lumen.

Strategic Rationale for AT&T

For AT&T, the acquisition is a strategic imperative driven by several factors:

• **Accelerated Fiber Growth:** Acquiring existing fiber assets and customers is faster and potentially less disruptive than building greenfield fiber networks from scratch in new territories. It immediately boosts AT&T's fiber subscriber base and expands its addressable market.
• **Access to New Markets:** The deal brings AT&T into major metro areas where Lumen has a significant fiber presence, including Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, and Seattle, as highlighted by AT&T. This expands AT&T's competitive footprint beyond its traditional territories.
• **Enhanced Construction Capabilities:** Gaining access to Lumen's fiber construction resources and expertise within these ILEC territories can help AT&T overcome potential bottlenecks in its own buildout process.
• **Competitive Positioning:** The U.S. broadband market is increasingly competitive, with cable companies upgrading their networks and other fiber providers expanding. This acquisition strengthens AT&T's position against competitors by increasing its fiber density and reach.
• **Future-Proofing:** Fiber is widely considered the most future-proof broadband technology, capable of supporting multi-gigabit speeds and handling the growing demands of connected homes and devices. Investing in fiber is essential for long-term sustainability and growth in the broadband sector.

AT&T's financial reports consistently show the growing importance of fiber in their subscriber mix and revenue streams. This acquisition is a direct reflection of that strategic priority.

Challenges and Regulatory Hurdles

While the deal appears strategically sound for both parties, it is not without potential challenges. The most significant hurdle is obtaining regulatory approval. Deals of this magnitude in the telecommunications sector are subject to review by the Federal Communications Commission (FCC) and potentially the Department of Justice (DOJ) to ensure they do not harm competition or the public interest. Regulators will likely examine:

• The impact on competition in the affected markets.
• Whether the transfer of assets serves the public interest, particularly concerning service quality and availability.
• The implications for customers, especially those on legacy copper networks.

Given that AT&T is primarily acquiring fiber assets in areas where it may not have a significant existing fiber presence, the deal might be viewed favorably from a competition perspective, as it could introduce or strengthen fiber competition against incumbent cable providers. However, consumer advocates may raise concerns about the fate of the remaining Lumen copper customers.

Integration is another challenge. Merging network operations, customer service platforms, and billing systems from two large telecommunications companies is a complex undertaking that requires careful planning and execution to avoid disruptions for customers.

The Broader Broadband Market Context

This acquisition takes place within a dynamic U.S. broadband market characterized by intense competition and rapid technological evolution. Fiber deployment is accelerating across the country, driven by consumer demand for higher speeds and increased government funding initiatives aimed at closing the digital divide.

Cable operators, traditionally dominant in many areas, are upgrading their networks with technologies like DOCSIS 4.0 to offer multi-gigabit speeds and compete more effectively with fiber. Fixed wireless access (FWA) services from wireless carriers like T-Mobile and Verizon are also emerging as viable alternatives, particularly in areas underserved by wireline options.

Against this backdrop, securing and expanding a robust fiber footprint is crucial for telcos like AT&T. Fiber offers symmetrical speeds (same upload and download speeds), lower latency, and greater reliability compared to older technologies, making it the preferred choice for demanding applications like remote work, online gaming, and streaming high-definition video.

Lumen's divestiture of consumer fiber reflects a broader trend among legacy telcos with mixed copper and fiber assets. Maintaining and upgrading aging copper networks is expensive and yields diminishing returns. Focusing on the enterprise market, where demand for high-capacity, reliable connectivity remains strong and profitable, is a logical strategic choice for Lumen.

Potential Impact on Customers

For the 1.1 million CenturyLink fiber customers being acquired, the transition to AT&T is expected to eventually bring them under the AT&T Fiber brand and service offerings. This could potentially mean access to different service tiers, pricing structures, and customer support systems. AT&T has a strong track record in fiber deployment and service, so the transition could be positive, potentially leading to access to higher speeds or bundled services.

However, as with any large-scale integration, there might be initial hiccups during the transition period. Customers should monitor communications from both companies regarding the process and any changes to their service or billing.

For the remaining CenturyLink copper customers under Lumen, the outlook is less optimistic. With Lumen explicitly shifting its focus away from the consumer mass market and retaining the copper assets, investment in upgrading or even maintaining these networks is likely to be minimal. These customers may face continued service limitations and potentially fewer options for future broadband improvements unless alternative providers enter their areas or government subsidies facilitate upgrades.

Conclusion

AT&T's $5.75 billion acquisition of CenturyLink's consumer fiber business is a landmark deal that underscores the strategic importance of fiber infrastructure in the modern telecommunications landscape. For AT&T, it's a significant accelerator for its fiber expansion plans, bringing it closer to its goal of reaching 60 million locations by 2030 and strengthening its competitive position in key markets.

For Lumen, the sale represents a decisive step in its transformation into a more focused enterprise technology company, shedding consumer assets to concentrate on higher-value business services. While strategically sound for Lumen's corporate objectives, the deal highlights the ongoing digital divide, potentially leaving millions of legacy copper customers behind.

As the deal progresses through regulatory review and towards its expected close in 2026, the industry will be watching closely to see how AT&T integrates these new assets and how Lumen executes its enterprise-focused strategy. The transaction is a clear signal that the race to build out next-generation fiber networks across the U.S. is intensifying, promising faster speeds for many, but also raising questions about the future of those left on older infrastructure.