AT&T, BlackRock jointly form Gigapower, wholesale fiber services provider

On Dec. 23, AT&T (NYSE:T) and BlackRock Alternatives, through a fund managed by BlackRock's Diversified Infrastructure business, announced their signing of a definitive agreement to form a joint venture that will operate a commercial fiber platform.

Dubbed Gigapower, LLC, the newly formed joint venture expects to provide a best-in-class fiber network to internet service providers (ISPs) and other businesses across the United States.

As stated by a press release, Gigapower will serve customers outside of AT&T’s traditional 21-state wireline service footprint with fiber access technologies in innovative and efficient ways. AT&T will leverage its nationwide wireless sales capabilities to sell fiber to customers in Gigapower territories.

Gigapower plans to deploy a reliable, multi-gigabit fiber network to an initial 1.5 million customer locations across the nation using a commercial open access platform. The Gigapower fiber deployment will be incremental to AT&T’s existing target of 30 million-plus fiber locations, including business locations, by the end of 2025.

Combined with existing efforts within AT&T’s 21-state footprint, the partners said this capital-efficient network deployment will advance efforts to bridge the digital divide, helping to provide the fast and highly secure internet services. The network expansion will also help spur local economies in each of the communities in which Gigapower operates.

Following close, AT&T and BlackRock will jointly own and govern Gigapower.

AT&T does not expect to consolidate Gigapower’s financial results but does expect to report its consumer subscribers served through Gigapower in Consumer Wireline business unit operational results. Any impacts to AT&T’s 2023 capital investment or free cash flow forecast will be included in AT&T’s 2023 financial guidance when it announces fourth-quarter 2022 results in January 2023.

The transaction is subject to customary closing conditions, including regulatory approvals. Additional terms were not disclosed.

EXECUTIVE QUOTES

“Now more than ever, people are recognizing that connecting changes everything. With this joint venture, more customers and communities outside of our traditional service areas will receive the social and economic benefits of the world’s most durable and capable technology to access all the internet has to offer.”

-- John Stankey, CEO of AT&T

“We are excited to form the Gigapower joint venture in partnership with AT&T, which will be serving as not only a joint owner but also the first wholesale tenant. We believe Gigapower’s fiber infrastructure designed as a commercial open access platform will more efficiently connect communities across the United States with critical broadband services. We look forward to partnering with Gigapower’s highly experienced management team to support the company’s fiber deployment plans and shared infrastructure business model.”

-- Mark Florian, Global Head of Diversified Infrastructure, BlackRock

“Fiber is the lifeblood of digital commerce. We have a proven team of professionals building this scalable, commercial open access wireline fiber network. Our goal is to help local service providers provide fiber connectivity, create the communications infrastructure needed to power the next generation of services and bring multi-gig capabilities to help close the gap for those who currently are without multi-gig service.”