DENVER, Nov. 20, 2025 (GLOBE NEWSWIRE) -- Merger and acquisition activity in the broadband service sector is picking up steam thanks to lower interest rates, greater economic certainty and renewed confidence from investors and strategic buyers. While interest in broadband assets remains strong among institutional investors, the landscape of prospective buyers has expanded as private broadband valuations have moderated from their lofty pandemic–era highs.

The resurgence in broadband M&A activity comes after a two-year slowdown following the buying frenzy during the height of COVID-19. Recent deals in the sector have been dominated by large telecom, wireless and cable operators pursuing strategic synergies and fiber expansion. But lower valuations and a more reasonable bidding environment have opened the door for smaller strategic buyers to re-enter the market.

According to a new report from CoBank’s Knowledge Exchange, broadband M&A activity should remain steady over the next few years, with strategic buyers playing an increasingly prominent role. During the COVID–era broadband market fervor, deep-pocketed institutional investors often outbid smaller strategic buyers, pushing valuations to unsustainable levels. Now that valuations have normalized and competition for deals has eased, smaller strategic buyers are re-entering the market.

“Broadband operators that can pair creative pricing models with a differentiated service will be best positioned to insulate themselves from recent pricing power challenges and margin pressure,” said Jeff Johnston, digital infrastructure economist with CoBank. “Leaning into the benefits of being small, nimble, local and providing best-in-class service can be a winning combination for smaller broadband operators.”

During COVID and the years that followed, the U.S. economy underwent a digital transformation that underscored the importance and value of broadband networks. That transformation caught the attention of private equity sponsors and infrastructure funds eager to gain exposure to the market. The post-COVID hysteria in the broadband market was soon followed by execution challenges, higher interest rates and labor shortages. Combined, those developments drove up costs and caused project delays.

“Additionally, the high multiples paid in 2023 began to fall as investors failed to realize their expected returns,” said Johnston. “As a result, many funds opted to hold onto investments longer than planned, hoping that improved execution and market liquidity would lead to higher multiples.”

Today’s strategic buyers are conducting deep due diligence, including detailed “buy versus build” analyses, and focusing on geographically strategic opportunities. Many prefer targets located adjacent to their existing markets or within a one-hour drive from their headquarters.

Meanwhile, national wireless operators are more likely to pursue deals that address specific strategic needs - such as filling fiber coverage gaps or alleviating wireless network capacity constraints stemming from their fixed wireless service.

Johnston said he expects prospective broadband buyers and investors will heighten their focus on integration and operational efficiency going forward. “Many of the early fiber rollouts were fueled by growth at any cost, but acquirers today are emphasizing disciplined network buildouts, optimized capital allocation, and improved customer retention. Several investors learned that building and running a successful broadband business is harder than it looks.”

Read the report, Broadband M&A 2.0: Strategic Discipline Replaces Pandemic Euphoria.

About CoBank

CoBank is a cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 78,000 farmers, ranchers and other rural borrowers in 23 states around the country. CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

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Source: CoBank