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

For a third straight reporting period, the FOCUS Communications Service Provider Index (CSPI) suffered a decline. Over the past three months, the sector fell 9.3%.This steep decline was in stark contrast to the broader indices, as the S&P 500 gained 2.3% and the NASDAQ gained 2.6% over the corresponding time period. Year-over-year performance for the CSPI also remained in negative territory with a loss of 5.9%. This was despite the fact that the S&P 500 and NASDAQ delivered strong gains of 16.4% and 20.4% over the past year. Sector multiples also trended down over the past twelve months. The CSPI revenue multiple dropped from 2.4x a year ago to 2.3x currently, while the EBITDA multiple fell from 6.5x to 6.0x.

The CSPI’s losses were broad-based, with all three sub sectors trading in the red for our winter reporting period. The National Providers sub sector had a loss of 9.3%.Lumen was the only stock in the sub sector in positive territory with an extremely strong gain of 27.0%. However, this was more than canceled out by losses at all of the other components of the index, including a 24.1% decline at Charter.The Business and Wholesale sub sector was far and away the worst performing sub sector in the CSPI with a three-month loss of 16.5%. A 43.8% drop in the stock of Cogent Communications served as the primary catalyst for this decline, with additional help from a 7.3% decline at Bandwidth.Finally, the Residential Providers sub sector was the CSPI’s best performing sub sector over the past three months with a loss of 7.2%. The sub sector’s two cable companies, Cable One and Optimum Communications, both suffered losses of more than 30%. Meanwhile, Telephone and Data Systems and WOW had solidly positive returns of 4.5% and 11.0%, respectively.

The final three months of 2025 saw a slowdown in M&A activity in the Communications Service Provider sector with only 19 total transactions. The total announced transaction dollar value was also low, coming in at only $68.2 million. However, despite the end-of-year slowdown, 2025 ended up being a solid year for M&A activity for communications service providers. We counted 88 total transactions for the year, which was the highest number since the boom year of 2022. In addition, the year’s total announced transaction dollar value of $48.3 billion made 2025 the best M&A year of the last five based on this metric by a wide margin.

The Business and Wholesale sub sector accounted for 11 of the period’s 19 transactions. Ooma notched two of these transactions with its acquisitions of Phone.com for $23.2 million and Fluentstream for $45.0 million. The Fluenstream deal also had the distinction of having the largest announced transaction dollar value of any deal this period. There were also two deals involving business-focused fiber providers over these past three months. These were the Oak Hill Capital Partners acquisition of Hunter Communications and the Metro Communications acquisition of the Southern Illinois Operations of Clearwave Fiber. Both of these targets were also expanding into residential fiber. Finally, Bluewave Technology Group continued its acquisitive ways as the company inked two more deals this period.

In the Residential Providers sub sector, we saw eight transactions this period. Vero Broadband expanded its footprint into the Southeast with the acquisition of TEC. Greenlight Networks also expanded further in New York and Pennsylvania with the purchase of FastBridge Fiber. In the final Residential Providers transaction that we will highlight, rural broadband provider Highline grew its footprint in Texas with the acquisition of certain assets from RTA.

Both transactions with announced multiples were in the hosted VoIP space, and both of the acquisitions were by Oooma. The Ooma acquisition of Phone.com had a revenue multiple of 1.0x and an EBITDA multiple of 18.6x. Oooma’s acquisition of Fluenstream had a significantly higher revenue multiple at 1.8x, but the EBITDA multiple was low at only 4.5x. This latter multiple was likely based on an EBITDA number that included significant cost synergies.