AT&T Bags BlackRock for Gigapower Fiber JV

AT&T nabbed venture capital firm BlackRock to help propel its fiber ambitions outside of the carrier’s traditional 21-state wireline footprint and move on AT&T’s long-simmering fiber expansion plans.

The duo’s work will be through the newly formed Gigapower joint venture that will operate the commercial fiber service. That service – not to be confused with AT&T’s previous “GigaPower” broadband offering – will be targeted at internet service providers (ISPs) and enterprises.

BlackRock’s work in the venture will be through its Alternatives division and through a fund managed by its Diversified Infrastructure business. That business recently raised $4.5 billion in initial investor commitments. AT&T executive veteran Bill Hogg was named CEO of Gigapower.

The venture’s initial plans are to deploy a multi-gigabit fiber network to 1.5 million customer locations using a commercial open access platform. This will be additional to AT&T’s own fiber deployment plans targeted at reaching more than 30 million locations within its 21-state wireline footprint by the end of 2025.

The JV will tap into AT&T’s nationwide 5G wireless service to support sales outside of its traditional wireline footprint. This will allow it to take advantage of AT&T’s already established enterprise arrangements and more quickly get a sales channel up and running.

AT&T will also act as Gigapower’s first tenant, according to a report from GlobalData Principal Analyst Tammy Parker, noting “AT&T will be able to sell fiber service in more wireline markets, complement its nationwide mobile service footprint, and enable the carrier to market fixed-mobile service bundles in those markets.”

Parker explained that the move could also prove tempting to AT&T competitors.

“The AT&T and BlackRock JV poses a competitive challenge to cable providers and regional fiber providers, whose broadband reaches are geographically restricted, though those carriers could possibly become tenants on the open access Gigapower platform to extend their own footprints,” she wrote.