T-Mobile US is acquiring a 50% stake in Metronet for $4.9 billion
T-Mobile US and investment firm KKR have entered a joint venture (JV) to purchase Metronet, an Indiana-based ISP that provides internet service to more than 2 million households across 17 states. According to a T-Mobile US press release, Metronet has the highest fiber build pace of any private fiber company in the U.S. and the third fastest overall build pace in the nation. And to get its hands on this fiber footprint, T-Mobile is willing to fork over an astounding $4.9 billion for a 50% equity stake. The other 50% stake will go to KKR — which has been a minority investor in Metronet since 2021 — bringing the total investment to approximately $10 billion.
Following the transaction’s close, Metronet will become a wholesale services provider for its retail customers and T-Mo will take on 100% of the ISP’s current residential fiber retail operations and customers. The telco giant plans to use this acquisition to expand its broadband portfolio and sell additional internet services supported by Metronet’s existing fiber network deployments.
“Metronet will focus on build plans, network engineering and design, network deployment, and customer installation. Following the transaction close, Metronet is expected to be self-funding on a go forward basis and it is expected to reach 6.5 million homes passed by the end of 2030,” the press release stated.
A new fiber strategy is beginning to emerge for T-Mo, which, ahead of its Q1 earnings report, announced a very similar JV deal with private equity firm EQP to establish itself as the anchor tenant in a fiber wholesale arrangement that will enable it to provide fiber service in several mid-Atlantic states. The pair will acquire regional fiber provider Lumos to enable T-Mo to launch a fiber-to-the-premise business. On the investor call CEO Mike Sievert said: “I’ve been saying for a while that smart fiber partnerships would allow us to profitably serve even more broadband customers.” Similar to Metronet’s fate, Lumos will transition to a wholesale model with T-Mobile US as the anchor tenant and T-Mo will take over the customer relationships with its own branding.
The Metronet transaction is expected to close in 2025, subject to customary closing conditions and regulatory approvals.
