Will AT&T's Fiber Assets Buyout From Lumen Drive Its Future Growth?

AT&T Inc. T has completed its previously announced acquisition of Lumen Technologies, Inc.’s LUMN mass-market fiber business for $5.75 billion in an all-cash transaction, expanding its fiber Internet service across 32 U.S. states. 

The buyout adds more than one million fiber subscribers to AT&T and over four million fiber-enabled locations, including major cities such as Denver, Seattle, and Salt Lake City. By leveraging its strong distribution network, the company aims to increase fiber adoption in these areas and strengthen its leadership in fiber broadband.

AT&T also secured Lumen’s fiber construction capabilities in 11 states, expanding its fiber service beyond traditional areas. This will facilitate the company in reaching its goal of more than 60 million fiber locations by 2030 and bringing high-speed Internet to more communities. The transaction strengthens AT&T’s ability to offer integrated fiber broadband and 5G wireless services from a single provider, supporting higher customer retention, stronger recommendations, and improved long-term value.

The fiber broadband market is expected to grow in the near future due to rising demand for high-speed Internet, remote work and streaming services, 5G expansion, and government initiatives to improve digital infrastructure. The deal improves AT&T’s industry position, enabling it to stay ahead of competitors, serve more customers, create good-paying jobs, improve U.S. connectivity, and deliver greater value to both customers and shareholders.

How Are Competitors Performing in the Fiber Market?

AT&T faces stiff competition from Verizon Communications, Inc. VZ and T-Mobile, US, Inc.TMUS. Verizon has been expanding its fiber network through a partnership with Eaton Fiber, bringing high-speed fiber Internet to new areas beyond its existing Fios coverage. Verizon is also using its recently acquired Frontier Communications to expand its fiber network, reaching millions of homes and businesses across the United States and strengthening its broadband position.

T-Mobile has launched T-Mobile Fiber, offering home Internet to many U.S. households with competitive plans and long-term price guarantees. The company aims to reach millions of homes by 2030 while combining fiber with 5G services through acquisitions like Lumos and partnerships with Metronet.

T’s Price Performance, Valuation & Estimates

AT&T has gained 8.5% over the past year against the industry’s decline of 4.7%.

From a valuation standpoint, AT&T trades at a forward price-to-sales ratio of 1.46, below the industry tally of 1.84.

Earnings estimates for 2026 have increased 1.8% to $2.28 over the past 60 days, while the same for 2027 have increased 0.4% to $2.53.

AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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