AT&T* (NYSE:T) and BlackRock (NYSE:BLK), through a fund managed by its Diversified Infrastructure business, have closed their joint venture to form Gigapower, LLC. Gigapower plans to provide a state-of-the-art fiber network to internet service providers and other businesses in parts of select metro areas throughout the country using a commercial wholesale open access platform.
With Gigapower, AT&T — one of the largest investors in fiber in America — and BlackRock — one of the largest investors in infrastructure — have come together to give more Americans access to super-fast, reliable, high-capacity fiber. At a time when broadband connectivity has never been more in demand or more critical to our day-to-day lives, both companies believe now is the time to create the United States’ largest commercial wholesale open access fiber network to bring high-speed connectivity to more Americans.
As Gigapower’s first tenant, AT&T will be able to greatly expand the number of customers and communities with access to the award-winning fiber internet service, AT&T Fiber.
“We believe fiber connectivity changes everything. That’s why we’re already one of the biggest investors in fiber in the United States,” said John Stankey, CEO of AT&T. “The demand for high-speed connectivity is unprecedented, and through this innovative partnership with BlackRock, one of the world’s foremost investors in infrastructure, we’re able to connect even more people and businesses, accelerating our efforts to help close the digital divide.”
“BlackRock is pleased to help bring critical broadband services to communities across America,” said Larry Fink, Chairman and CEO, BlackRock. “This investment on behalf of BlackRock’s clients will advance efforts to bridge the digital divide and spur economic growth in the communities where Gigapower operates.”
AT&T is already the nation’s largest fiber internet provider1 and plans to pass 30 million-plus consumer and business locations in its traditional service areas by the end of 2025. Opportunities such as Gigapower will enable AT&T to expand its fiber service reach beyond its traditional service areas in order to deliver state-of-the-art broadband access technologies to more communities across the country. BlackRock brings significant expertise, capital and a commitment to invest in future-proof access technology led by best-in-class operating teams.
New Fiber Cities and Big Plans
In addition to Las Vegas, Gigapower now expects to expand beyond its previously announced fiber deployment in Mesa, to the Chandler and Gilbert areas of Arizona. Gigapower also plans to build fiber in parts of Northeastern Pennsylvania (including Wilkes-Barre and Scranton) as well as parts of Alabama and Florida that are outside AT&T’s current service areas.
“Recently our first wholesale customer, AT&T, activated end-user customers on the Gigapower fiber network in Mesa, and that is just the beginning,” said Bill Hogg, CEO of Gigapower. “We have big plans to deploy multi-gig fiber to many more cities across our country. Our partnerships with communities like Las Vegas and others are essential to building our fiber network and creating a commercial wholesale open access platform that will benefit consumers and businesses across the U.S.”
From metro areas to underserved rural areas, all communities require powerful digital infrastructure to support their economies. With nearly 650,000 residents and more than 42 million annual visitors, Las Vegas is a great example of such a community. Fiber delivers the fast symmetrical speeds and high bandwidth needed to keep residents and visitors connected to the people, events, and businesses that matter most to them.
“Connecting Las Vegas is more important than ever. From families, students, workers, consumers, and small and large businesses, access to the latest broadband technology will elevate our community and economy, paving the way to a strong future,” said Carolyn G. Goodman, Mayor of Las Vegas. “Additional and continuing broadband investment will ensure that Las Vegas remains at the forefront of the digital economy and is a great place to live, work, and visit.”
Gigapower Transaction Terms
AT&T and BlackRock will jointly own and govern Gigapower. The closing of the Gigapower joint venture does not impact AT&T’s 2023 guidance, including for capital investment and free cash flow, which was announced in January 2023 and affirmed in April 2023, which the company continues to expect to meet.
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