News

The new company will target 1.5 million locations beyond the scope of AT&T’s existing fibre network

It was certainly a happy New Year for AT&T this year, having announced the creation of a new fibre joint venture (JV) with US-based investment firm BlackRock.

The JV, to be named Gigapower LLC, will offer wholesale access to ISPs and other business customers.

In total, the company aims to deploy multi-gigabit fibre to 1.5 million customer locations currently outside of AT&T’s existing network, which currently serves 21 states across the country.

“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,” said AT&T CEO John Stankey.

Specific locations targeted for fibre coverage have yet to be revealed.

The company’s ownership and financing structure of Gigapower has also not been disclosed, with analysts estimating the venture to be worth between $10 billion and $15 billion.

BlackRock is one of the ‘Big Three’ index fund managers in the US, managing a portfolio worth $313 billion, including a growing number of infrastructure assets.

Indeed, in October last year, BlackRock raised $4.5 billion for its new diversified infrastructure fund, which it said would target infrastructure assets that would benefit from the global shift towards low-carbon energy.

Coincidentally or otherwise, it was also around this time that AT&T first announced that they had hired Morgan Stanley to help manage the creation of a fibre joint venture and select an infrastructure partner.

“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,” said Mark Florian, Global Head of Diversified Infrastructure, BlackRock. “We believe Gigapower’s fibre infrastructure designed as a commercial open access platform will more efficiently connect communities across the United States with critical broadband services.”

As always, the customary regulatory approvals will be required before the deal is finalised.

AT&T is currently aiming to expand its own fibre networks to over 30 million locations by the end of 2025.

Want to learn all of the latest news from the American telecoms market? Join the experts in discussion at this year’s live Connected America conference in Dallas, Texas

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News

The Competition Tribunal dismissed concerns from the Competition Commissioner that the deal would see customers face higher prices

Back in March 2021, Rogers Communications agreed to buy rival Shaw Communications for around C$21 billion, saying the tie-up would allow for increased investment in 5G rollout and create around 3,000 jobs.

However, as was to be expected from a merger of this nature, which would reduce the Canadian mobile market to just three national players, the deal quickly came under intense regulatory scrutiny. For over a year now, the companies have been negotiating with regulators to close the deal/

With Rogers already the mobile market leader in Canada, much of the regulatory discussion centred around the future of Shaw’s mobile unit, Freedom Mobile, the acquisition of which would make Rogers’ market dominance unassailable.

As such, regulators eventually ruled that Shaw must divest of the unit to facilitate the merger, with the operators ultimately agreeing to sell the business to Montreal-based wireless operator Vidéotron in August last year. Conditions were attached to the sale to ensure that Vidéotron would use Freedom Mobile’s spectrum and infrastructure to become Canada’s fourth national mobile operator, with Canada’s Minister of Innovation, Science and Industry, François-Philippe Champagne, seeking to ensure that the company was “in it for the long run”.

But despite assuaging some regulatory concerns, Canada’s Commissioner of Competition Matthew Boswell still moved to block the deal in May last year, saying the deal would be bad for competition and drive-up prices for customers. He would also later argue that Freedom Mobile was a more effective market competitor under Shaw’s ownership than it would be under that of Vidéotron.

Now, however, the government’s Competition Tribunal has rejected this plea, saying it does not believe the deal will have the negative impacts Boswell describes.

“It bears underscoring that there will continue to be four strong competitors in the wireless markets in Alberta and British Columbia, namely, Bell, Telus, Rogers and Videotron, just as there is today. Videotron’s entry into those markets will likely ensure that competition and innovation remain robust,” said the Tribunal in its ruling.

Boswell said he was disappointed by the decision and would appeal the decision. As such, a Federal Court has issued an emergency stay temporarily suspending the Competition Tribunal’s dismissal of the case until the application for an injunction can be heard.

Nonetheless, this decision leaves very few roadblocks left for the merger. Champagne is expected to formally approve the transfer of Freedom Mobile’s spectrum to Vidéotron later this month, with the Rogers–Shaw merger itself likely to follow in short order if the Competition Commission’s appeal is rejected.

Want to learn all of the latest news from the American telecoms market? Join the experts in discussion at this year’s live Connected America conference in Dallas, Texas

Also in the news:
Resilience in the face of war: Kyivstar talks challenges and collaboration
BT seeks £100m in savings by merging global and enterprise units
Connected Britain Keynotes: CXO Spotlight

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