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T-Mobile CEO Mike Sievert is looking to expand the company further into fiber internet service without making major capital investments. (GeekWire File Photo / Todd Bishop)
T-Mobile will invest $4.9 billion into a new joint venture that plans to acquire broadband internet company Metronet, a key move in a larger plan by the Bellevue, Wash.-based company to expand beyond its traditional wireless business.
The plan, announced Wednesday morning, will give T-Mobile a 50% stake in the new joint venture with investment firm KKR. It’s no small deal for the company, which reported $6.7 billion in cash and equivalents as of the end of March.
As part of the deal, T-Mobile will absorb Metronet’s residential fiber retail operations and customer base. Metronet currently serves 2 million homes and businesses in 17 states, with that number projected to reach 6.5 million homes by the end of 2030.
It’s part of a broader move by T-Mobile, under CEO Mike Sievert, to build out its fiber internet service, expanding beyond its existing mobile and fixed wireless infrastructure without making significant capital expenditures of its own.
“This is a unique opportunity and a smart, capital-efficient deal that enables T-Mobile to profitably build on our success in broadband and provide fast, affordable and reliable connectivity options to millions more customers nationwide as a complement to our wireless growth strategy,” Sievert said in a statement.
T-Mobile announced a similar, smaller deal in April, outlining plans to invest $950 million in a joint venture that will acquire the fiber-to-the-home platform Lumos.
The company offers its fiber internet service, T-Mobile Fiber, in parts of California, Colorado, Florida, Illinois, Michigan, Minnesota, New York and Wisconsin. It separately offers 5G Home Internet service using excess wireless capacity.
On the competitive front, it’s going up against some familiar rivals in residential internet in AT&T and Verizon, among other broadband providers.
T-Mobile, which merged with Sprint in 2020, had more than 120 million total customers as of March this year, including about 76.5 million on postpaid wireless phone plans, and more than 5 million high-speed internet customers.
Metronet, based in Evansville, Indiana, is owned by Oak Hill Capital and the Cinelli family, with KKR as a minority investor. The sale to the new T-Mobile/KKR joint venture is scheduled to close in 2025, pending regulatory approval.
