-
T-Mobile is forming a new joint venture with KKR to acquire Metronet
-
The JV will help Metronet reach 6.5M homes passed with fiber by 2030
-
T-Mobile’s been working with open access network operators to expand its fiber reach
T-Mobile’s added another joint venture to its fiber arsenal. This time, it’s teamed up with investment firm KKR to acquire fiber provider Metronet.
The carrier will invest $4.9 billion to acquire a 50% equity stake in the JV as well as all of Metronet’s customers and residential fiber retail operations. Metronet, which is headquartered in Indiana, passes more than 2 million homes and businesses across 17 states.
Through the JV, Metronet expects to reach 6.5 million homes passed by the end of 2030. Once the transaction closes in 2025, Metronet will become a “wholesale services” provider for its retail customers, T-Mobile said.
However, “Metronet won’t become open access under this deal,” a T-Mobile spokesperson told Fierce.
News of the deal comes after T-Mobile in April announced a JV with EQT to acquire Mid-Atlantic fiber provider Lumos.
The JV with KKR will be “complementary” to T-Mobile’s 5G Home Internet fixed wireless access (FWA) offering, but the venture will be fully fiber, the spokesperson confirmed.
Post-acquisition, Metronet will self-fund its fiber expansion and “is not expected to require any additional investment from T-Mobile,” said the T-Mobile rep, “given [Metronet’s] strong financial performance and scale.”
At this time, T-Mobile doesn’t have any specifics to share on the states and markets it’s targeting with the JV.
“We would expect the JV to achieve as good and likely better penetration rates/curve than traditional fiber builders due to the commercial assets we bring to the table,” the T-Mobile spokesperson told Fierce Network.
Why Metronet?
T-Mobile went after Metronet because the company has “the highest build pace of any private fiber company in the U.S. and a top-notch management team,” the T-Mobile spokesperson told us.
Indeed, Metronet has been ramping up its fiber deployments. It recently announced new builds in Illinois, Minnesota and North Carolina.
KKR first invested in Metronet in 2021. Since then, Metronet “has grown rapidly, including constructing new fiber infrastructure and adding subscribers in attractive, underserved markets,” said Waldemar Szlezak, KKR’s global head of digital infrastructure.
“Our new joint venture with T-Mobile will be transformational for the future of the Metronet business,” he said in a statement. “We look forward to benefitting from T-Mobile’s industry-leading customer experience to support the company in reaching its full potential.”
Oak Hill Capital, which also owns stake in Metronet, will sell that stake to the JV. The firm will re-invest to retain a minority stake in the venture. John Cinelli, Metronet’s co-founder and current chairman, will also remain a minority investor once the deal closes.
T-Mobile’s fiber foray
T-Mobile has been dipping its toes into the fiber broadband space, with the help of open access network operators.
According to its website, T-Mobile offers 500 Mbps, 1-gig and 2-gig fiber plans in parts of eight states. The company’s also partnering with Intrepid, Si-Fi Networks and Tillman FiberCo to broaden its fiber footprint.
A lot of money is pouring toward open access fiber. Both Intrepid and Tillman recently scored $290 million and $1 billion in new financing, respectively.
The Metronet acquisition would be “the largest fiber deal that T-Mobile has entered into so far,” New Street Research has said, giving the operator “immediate access to about 1.5% of U.S. households.”
