AT&T is in talks to acquire Lumen Technologies' consumer fiber operations.
As reported by Bloomberg, the two companies are in exclusive discussions that could value the unit at more than $5.5 billion.
Terms haven't been finalized. Bloomberg reports that talks may still collapse.
AT&T has previously outlined its fiber ambitions. In December, the carrier's CEO John Stankey said the company plans to reach more than 50 million fiber locations by 2029.
In a note to investors, New Street Research said that the reported deal would be good value for AT&T.
"If the rumored price is correct, it is a great deal for AT&T," the company's analysts said, noting that the deal would not be such good value for Lumen, estimating that its consumer fiber assets could fetch between $6-$9 billion.
Lumen CFO Chris Stansbury said last year that the company saw its consumer fiber division as a "great asset."
As of the end of 2024, Lumen has around one million customers on fiber connections.
AT&T's fiber push
AT&T recently struck four new agreements with commercial open-access providers to boost its fiber build. Those partners are Boldyn Networks, wholesale fiber developer and operator, Digital Infrastructure Group, PRIME FiBER, and Ubiquity.
AT&T is also adding fiber customers via its fiber JV, Gigapower, with investment company BlackRock.
In October, AT&T signed a multi-year purchase agreement worth more than $1 billion with Corning Incorporated.
At present, the carrier has around nine million fiber customers and has passed close to 30 million fiber premises, meaning it's still 20 million away from its target.
It's not just AT&T that sees the value in fiber; the carrier's big rivals Verizon and T-Mobile have also been carving out deals in this segment.
Verizon is set to acquire fiber provider Frontier Communications for $20 billion as part of plans to bolster its own offering. Frontier shareholders, despite many publicly rejecting the bid, agreed to approve the deal.
T-Mobile has also pushed the boat out on fiber, first through the acquisition of Lumos Networks as part of a joint venture (JV) with EQT Infrastructure in April of last year. Then, in July, the company agreed to set up a JV with investment firm KKR to acquire fiber Internet service provider Metronet.
