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

After three consecutive reporting periods in the red, the FOCUS Communications Service Provider Index (CSPI) reversed course and delivered a strong 13.1% gain over the past three months. This gain is even more impressive given that it went against the grain of the broader markets. The S&P 500 declined 4.6% over the past three months, while the NASDAQ was down even more sharply with a loss of 7.1%. The situation is reversed when looked at over the 12-month period. Over this time frame, the CSPI fell 4.5%. In contrast, the S&P 500 and the NASDAQ gained 16.3% and 24.8%, respectively.Sector multiples also fell slightly compared to this same time last year. The CSPI revenue multiple declined from 2.5x to 2.4x, while the EBITDA multiple dropped from 6.7x to 6.5x.

Two of the CSPI’s three sub sectors delivered positive returns in our spring reporting period. The Business and Wholesale sub sector was the top performer with a three-month gain of 16.1%. This was due to a 33.8% gain at Uniti and a 15.3% gain at Bandwidth, partially offset by a 12.6% drop at Cogent. Cogent is now down nearly 70% year-over-year. The National Providers sub sector also enjoyed a strong spring as it jumped up 13.2% over the past three months. AT&T (up 16.7%) and Verizon (up 23.3%) were the engines behind this positive performance. On the other hand, fellow sub sector member Lumen declined by more than 10% this period.The lone CSPI sub sector in negative territory this reporting period was the Residential Providers sub sector, which fell 2.6%. Cable providers Cable One and Optimum Communications were the primary drags on the sub sector. Cable One dropped 19.2% over the past three months, while Optimum Communications fell 21.2%. On the bright side, these losses did not extend across the entire sub sector. WOW increased 27.5%, while Telephone and Data Systems also delivered a (much smaller) gain of 2.7%.

M&A activity in the Communications Service Provider sector was off to a solid start in 2026 with 22 transactions for a total announced transaction dollar value of $1.8 billion. This puts 2026 on pace with the high level of activity we saw in 2025 in terms of the number of transactions, but lagging well behind 2025 in terms of the announced dollar value of these transactions.

The Residential Providers sub sector dominated activity over the past three months, accounting for 15 of the period’s 22 transactions. This included the largest deal based on announced transaction dollar value, which was Cable One’s $1.8 billion purchase of Vyve Broadband. We also noted two large mergers in the sub sector. In the first of these, Point Broadband combined with Clearwave, a joint venture between Cable One and several private investment firms. Also of note, Gfiber announced that they would merge with Astound Broadband. The MDU broadband space was also very active this period. Mereo Fiber acquired Data Stream and Xcelerate Networks, while Secure Vision acquired the bulk connectivity business of ENCO and Ipacket Networks. We also noted the acquisition of MDU specialist Broadband Development Group by Circumference Group. In the final transaction in the Residential Providers sub sector that we will specifically mention, Fastwyre divested their Missouri operations to Socket Telecom.

The Business and Wholesale sub sector saw seven transactions this period. UCaaS provider Intermedia Cloud Communications switched private equity backers as the company was acquired by 26North Partners. Also in the UCaaS space, Crexendo returned to the M&A table after a long hiatus with its $35 million acquisition of Estech Systems.On the managed connectivity front, Contrivian purchased Big Network. We also noted that there was only a single transaction this period involving a business-focused fiber network operator. This was the Pilot Fiber acquisition of Extenet’s enterprise fiber business.

For the second straight reporting period, we had two transactions with announced multiples. The period’s largest transaction, the Cable One acquisition of Vyve Broadband, notched a revenue multiple of 5.7x. This indicates the strong multiples that successful residential broadband providers can achieve once they reach scale. In the second transaction with an announced multiple, the Crexendo acquisition of UCaaS provider Estech Systems had a multiple of 1.3x revenue. Neither of these transactions had an announced EBITDA multiple.