Cogent Communications has entered into a definitive agreement to acquire T-Mobile US’s wireline business for just USD1. Cogent notes that the legacy long-haul infrastructure – which previously belonged to Sprint – provides an owned network asset to complement and eventually replace its current leased network. A newly formed direct subsidiary of Cogent will complete the acquisition, which is subject to the receipt of regulatory approvals and other customary closing conditions and is expected to close in the second half of 2023.
In addition to the fibre network and related assets and customers, Cogent will acquire certain liabilities associated with the business. In addition, at the closing of the acquisition, the parties will enter into a separate agreement pursuant to which Cogent will offer IP transit services to T-Mobile for 54 months following the closing date and T-Mobile will pay Cogent USD700 million for such services, with USD350 million due in equal payments over the first twelve months after closing and USD350 million due in equal payments over the remaining 42 months.
The legacy Sprint Wireline division includes North American wholly-owned fibre networks consisting of 19,000 long-haul route miles and 1,300 metro route miles, plus North American leased dark fibre of 16,800 route miles, providing services including: MPLS (which Cogent expects to migrate to VPLS and WAN), DIA & Transit; Colocation; Wavelength; and ‘non-core’ products. Cogent is expected to acquire the legacy Sprint customer base of approximately 1,400 enterprises ‘outside of Cogent’s typical customer profile’, and it aims to enter the Wavelength and Dark Fibre markets, while Cogent-owned data centres will increase from 53 to over 100 upon completion of the transaction.