Telecom U.S. Communications Service Provider: Summer 2026 Report

It was a difficult three-month period for the FOCUS Communications Service Provider Index (CSPI). While the S&P 500 gained 14.9% and the NASDAQ gained 21.4% over the past three months, the CSPI fell 20.2% over this same time period. The situation is not any better when viewed over the full 12-month period. The CSPI fell nearly 25% over the past year, while the S&P 500 and the NASDAQ both had gains in excess of 20%. Sector multiples are also lower than they were at this same time last year.Sector multiples closed out the period at 2.2x revenue (compared to 2.5x a year ago) and 6.0x EBITDA (compared to 6.5x a year ago). This indicates that investment sentiment towards the sector has deteriorated.

The biggest drag on the CSPI’s performance came from the National Providers sub sector, which plummeted 20.8% in the past three months. Four of the five companies in the sub sector had double digit declines this period, with Lumen serving as the lone exception. Things are not much better over the full year period. While Lumen is up more than 75% over the past year, all of the other stocks in the sub sector traded in negative territory. This included Charter, which shed more than 60% of its value.

The Residential Providers sub sector also traded in negative territory over the past three months, although with a somewhat more modest decline of 12.2%. The sub sector is also down 10.7% over the past year. We noted that Optimum had a strong quarter, posting a gain of 11.5%.However, Cable One was down more than 40% in the past three months. Combined with a 12.1% decline at Telephone and Data Systems, this was more than enough to drag the sub sector into negative territory. Sub sector multiples ended the period at 3.1x revenue (up from 2.7x a year ago) and 7.7x EBITDA (up from 7.6x a year ago).

The lone bright spot for the CSPI was the Business and Wholesale sub sector, which posted an impressive gain of 45.7% over the past three months. Bandwidth was the star performer, as the company delivered an eye-popping gain of 255.2%. Uniti also chipped in with a gain of 22.3%. Unfortunately, Cogent was not able to benefit from the sub sector’s overall positive momentum, as the company fell 26.3% this period. The sub sector now trades at 4.0x revenue, which is a decrease compared to its year-ago revenue multiple of 4.4x. However, the sub sector’s EBITDA multiple of 10.9x represents a slight increase compared to its EBITDA multiple this time last year of 10.6x.

We counted 20 total transactions in the Communications Service Provider sector over the past three months. This represents a solid level of M&A activity in terms of the number of transactions. However, the total announced dollar value of these transactions was relatively low at only $310 million. We see a similar picture when we assess the sector’s level of M&A activity at the midpoint of 2026. The 42 total transactions for the year are consistent with what we have seen since the boom year of 2022. Meanwhile, the $2,106.7 million in total announced transaction dollar value is well below the levels that we saw in either 2024 or 2025.

The Business and Wholesale sub sector accounted for 11 total transactions this period, or slightly more than half of the total. Most of these were transactions involving asset light managed services or hosted communications providers. These included new private equity investments in CallTower (from Court Square Capital Partners) and Spectrotel (from Charlesbank Capital Partners).Spectrotel put its capital to work immediately by announcing that it would acquire fellow managed network services provider Airespring. In other deals involving managed network services companies, COEO acquired S-Net Communications and RingSquared announced that it would acquire Easton Telecom Solutions.We did note two transactions this period involving companies that own and operate fiber networks. These were the GCI acquisition of Alaska-based Quintillion and the acquisition of Dark Fiber & Infrastructure by SummitIG.

Activity in the residential Provider sub sector was down somewhat from the elevated levels in our spring report. The sub sector had nine transactions for this most recent three-month period. T-Mobile accounted for two of these as it continued to expand its residential fiber network with acquisitions of Greenlight Networks/GoNetspreed and i3 Broadband. Grain Management also combined two of its portfolio companies, as Ritter Communications acquired Great Plains Communications. Finally, we noted several transactions involving smaller broadband operators. These included the Omni Fiber purchase of Citizens Fiber in Pennsylvania, the Telephone and Dats Systems acquisition of Granite State Communications in New Hampshire and the TruVista Communications acquisition of a municipal fiber network from the city of Commerce, Georgia.

There were no transactions with announced multiples in our summer reporting period.