T-Mobile US plans to spend $4.9 billion for a 50 per cent stake in US-based fibre service provider Metronet through a joint venture (JV) with investment company KKR.

Metronet’s fibre network reaches more than 2 million households in 17 states. It is projected to reach 6.5 million homes by the end of 2030.

The fibre company is owned by Oak Hill Capital and the Cinelli family.

As part of the transaction, the JV will acquire Oak Hill Capital’s existing stake.

Oak Hill Capital will then reinvest to retain a minority position while founder John Cinelli will also retain a minority stake once the deal closes.

Upon closure, Metronet will become a wholesale services provider for its retail customers while all its residential fibre retail operations and customers will transfer over to T-Mobile.

The mobile operator said it will bring its retail, marketing, brand and service model experience to the JV, and will have full responsibility for residential customer acquisition and support.

Going forward, Metronet is expected to be self-funding while focusing on its build plans, network engineering and design, network deployment, and customer installation.

T-Mobile CEO Mike Sievert stated Metronet is a perfect partner for his company due to an “incredibly fast build pace, and a top-notch management team”. He also highlighted “KKR’s strong heritage of corporate partnership and global fibre franchise”.

The transaction is expected to close in 2025, subject to regulatory approvals.

Strong fibre ambitions
T-Mobile is challenging broadband incumbents, such as cable operators, with its FWA service for home internet, but it is also making a concerted effort to expand into fibre-based services.

In April, it formed a JV with investor company EQT to acquire US-based FTTH provider Lumos Networks.

Through various partnerships, the operator has launched T-Mobile Fibre in parts of 16 markets across eight states.

T-Mobile rival AT&T struck a JV agreement with private equity company BlackRock Alternatives in late 2022 to build out fibre beyond its traditional 21-state footprint.