Shifting Signals Create Uncertainty for Rural Broadband Consolidation

Jeff Johnston

March 6, 2024

Key Points

  • The cable and wireless industries have consolidated over the last 20-30 years to create scale and gain access to valuable nationwide spectrum. Observers are watching to see if history will repeat itself in a similar tech provider industry: the rural broadband market.
  • While scale will be important for future rural broadband consolidation, the industry’s unique aspects may prevent massive consolidation.
  • The industry is fragmented, which typically leads to consolidation when growth begins to slow. However, not all operators will be merger and acquisition (M&A) targets, especially cooperatively owned companies committed to their deep-rooted mission to serve their local communities.
  • Infrastructure funds and private equity sponsors will continue to play an important role in industry M&As, but recent headwinds from inflation, higher interest rates and labor shortages could cast a cloud over near-term activity.
  • Some level of consolidation is expected over the next 5-10 years, but it’s a question of when and how much.

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Disclaimer: The information provided in this report is not intended to be investment, tax, or legal advice and should not be relied upon by recipients for such purposes. The information contained in this report has been compiled from what CoBank regards as reliable sources. However, CoBank does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this report. In no event will CoBank be liable for any decision made or actions taken by any person or persons relying on the information contained in this report.

 
 
 
 

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