EUR 9230.00 For Business Accounts Only

The Lumen transaction report series

The biggest transaction likely to happen this year will be the sale of all or part of Lumen’s Mass Markets business (we expect other much bigger deals, but these will likely take longer to emerge than some seem to expect). We have covered the potential Lumen transaction in three reports in the last week:
1. We explored the Mass Markets asset in a detailed report last week that leverages Broadband Insights. This covered the markets where Lumen has deployed fiber so far, the number of competitors, who they compete against, our forecast for terminal penetration, the locations that can still be upgraded and who they compete against in those markets, and the markets that are less likely to see fiber deployment. This report should be a valuable reference tool for anyone looking at the asset.
2. We made a case for a sale of all of Mass Markets, rather than a sale of just the fiber business in an earlier report. We think this would be a better transaction both for Lumen and their investors, and the buyer. We suspect the three obvious strategic buyers will balk at the carve out of the fiber business that Lumen has proposed, and if the three ultimate buyers don’t like the carve it, it should give financial buyers who are looking to sell it onto one of the strategic buyers in a couple of years cause for concern.
3. We wrote about AT&T’s comments at a recent conference that we believe left the door open to an acquisition of the fiber assets or all of Mass Markets. Importantly, based on the comments, the acquisition would happen at Gigapower rather than AT&T, it would comfortably fit within the $10BN envelope that management set aside for M&A, and it would have no impact on leverage of the return of capital at AT&T.