T-Mobile, KKR form fibre joint venture to acquire Metronet

As mid-sized mobile and fixed connectivity providers across Europe see the wisdom in joining forces to compete more effectively with the much larger incumbent market leaders in their respective companies, T-Mobile US has announced its own joint venture with global investment firm KKR Announce to acquire Metronet, and offer what the partners said would be leading fibre services to more consumers.

Indiana-based Metronet provides multi-gigabit internet services, and currently reaches more than two million homes and businesses across 17 states, with fibre offerings built on a “state-of-the art” broadband platform. It has a go-to-market strategy of expanding its fibre-optic network in more than 90 communities at any one time, and is said to have become the US’s largest and fastest-growing privately owned fibre-to-the-home company.

The acquisition will see T-Mobile invest approximately $4.9bn to acquire a 50% equity stake in the joint venture, and 100% of Metronet’s residential fibre retail operations and customers, as well as funding. The transaction is expected to close in 2025, subject to customary closing conditions and regulatory approvals.

Following closure of the transactions, Metronet will become a wholesale services provider for its retail customers and 100% of its residential fibre retail operations, and customers will transition to T-Mobile, which will have full responsibility for residential customer acquisition and support.

Metronet is expected to be self-funding on a going-forward basis, aiming to reach 6.5 million homes passed by the end of 2030. Metronet will focus on build plans, network engineering and design, network deployment, and customer installation.

To support this business plan, T-Mobile doesn’t expect to make any additional capital contributions to the joint venture. It said it will use Metronet’s deep digital and fibre infrastructure expertise to expand to more households with fibre broadband services.

“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,” said T-Mobile CEO Mike Sievert.

“Metronet is the perfect partner for T-Mobile as a leader in fibre solutions with an incredibly fast build pace, and a top-notch management team. Together with KKR’s strong heritage of corporate partnership and global fibre franchise, we will further expand the Un-carrier’s fibre footprint, and deliver real value and choice to customers while addressing a growing demand for fast and reliable broadband.”

Waldemar Szlezak, KKR partner and global head of digital infrastructure, said: “Since our initial investment in Metronet in 2021, the company has grown rapidly, including constructing new fibre infrastructure and adding subscribers in attractive, underserved markets. Our new joint venture with T-Mobile will be transformational for the future of the Metronet business. We look forward to benefitting from T-Mobile’s industry-leading customer experience to support the company in reaching its full potential.”

Metronet CEO Dave Heimbach added: “We could not be prouder to expand our strategic partnership with KKR and form a new one with T-Mobile – two global leaders in 5G wireless connectivity and digital infrastructure.

“Metronet’s 100% fibre network delivers symmetrical multi-gigabit internet service directly to homes and businesses, perfectly complementing T-Mobile’s industry-leading 5G mobile and fixed-wireless offerings to meet consumer demand for seamless, ubiquitous connectivity. With this new partnership, Metronet will expand its fibre network faster and farther, reaching millions more households by the end of the decade.”