Another week, another multi-billion dollar telco M&A deal. AT&T’s $5.75 billion acquisition of Lumen’sresidential fiber business followed Charter’s $34.5 billion buyout of Cox by six days.

While the deal has been expected since March, the AT&T-Lumen acquisition should have a significant impact on both companies’ strategies. It helps AT&T compete with the likes of Charter, Comcast, Verizon and T-Mobile – some of which have made or are planning acquisitions to add fiber. AT&T increased its goal of reaching 50 million U.S. locations with fiber by 2030 to 60 million locations with the Lumen acquisition.

Following the sale of its fibre business, Lumen will concentrate on the enterprise market, including building AI infrastructure.

“We’re leading the race to connect more Americans with fiber, the best broadband connectivity technology available,” AT&T CEO John Stankey said in a prepared statement. “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 across 11 states. As we advance our fiber build, we’ll serve more communities with world-class connectivity and expect to roughly double where AT&T Fiber is available by the end of 2030.”

The deal frees Lumen pivot from selling residential services to focus on B2B sales. Lumen executives see the enterprise as an $80 billion-plus TAM. Lumen claims recent contracts with cloud hyperscalers total $8.5 billion.

“We've got three major priorities: driving operational excellence, building the backbone for AI and cloudifying telco. And we've got programs under each of those,” Lumen CEO Kate Johnson said during a call with investors last Friday to discuss the AT&T deal. “This newfound financial freedom, in some cases, allows us to go faster. In other cases, you can only go so fast as you can dig the holes from a construction perspective. With that flexibility, I think what's really new here is we have radical clarity from a strategic perspective, and we're now able to really start to measure the return on dollars invested with great precision against something that really matters. And so we're excited about that.”

The deal is expected to close by mid-2026 and will enable AT&T to expand into Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, Seattle and other areas.

The sale continues a pattern of Lumen selling off assets over the past few years. Lumen sold its Latin American business to investment firm Stonepeak for $2.7 billion in 2021, its ILEC business to Apollo Global Management in 2022 and its EMEA business to Colt Technology Services for $1.8 billion in late 2023.