The FOCUS Communications Service Provider Index (CSPI) rebounded over the past three months with a gain of 5.7%, well ahead of the S&P 500 (2.0%) and the NASDAQ (2.5%). This was the first time since our spring report that the CSPI outperformed both of the broader indices. Over the full year period, the CSPI is down 13.5%, while the S&P 500 gained 14.4% and the NASDAQ gained 18.5%. Sector multiples also remain below year-ago levels, closing out the period at 2.2x revenue (compared to 2.4x a year ago) and 6.1x EBITDA (compared to 6.3x a year ago).
The National Providers sub sector led the CSPI higher with a gain of 6.3% over the past three months. AT&T was the top performer with a gain of 17.9%, and Verizon chipped in with a gain of 8.3%. However, the cable operators struggled, as Charter fell 22.0% and Comcast was down 11.4%. This was the second straight double-digit decline for both companies. The sub sector is down 14.3% over the full year period, with Verizon (up 4.4%) the only gainer. On the down side, Charter shed nearly 60% of its value over the past year. Sub sector multiples dropped from 2.4x revenue and 6.2x EBITDA a year ago to 2.2x revenue and 6.0x EBITDA currently.
The Residential Providers sub sector fell 19.9% over the past three months. Every company in the sub sector lost value, and four of the five posted double-digit declines. Cable One was the biggest drag, plummeting 79.3% for its fourth straight double-digit decline (down 93.8% over the past year). Optimum (down 31.8%), Uniti (down 26.9%) and Shenandoah Telecommunications (down 25.6%) also fell sharply, while Telephone and Data Systems declined 8.3%. The sub sector is down 20.3% over the full year period, with Uniti (up 36.9%) the only company to post a 12-month gain. Despite lower stock prices, sub sector multiples rose to 3.2x revenue (from 3.0x a year ago) and 8.3x EBITDA (from 7.9x).
The Business and Wholesale sub sector posted a modest gain of 3.5% over the past three months, but individual results varied widely. Hosted voice provider RingCentral was the star performer with a gain of 91.6%, and its competitor 8×8 also turned in a strong quarter with a gain of 31.6%. However, bandwidth provider Cogent Communications fell 43.9%, its fourth straight double-digit decline, and Lumen plummeted 27.1%. Rounding out the companies in the sub sector, Crexendo fell -21.3% while Bandwidth slipped 4.1%. The sub sector is up 30.4% over the full year period, led by Bandwidth (up 264.2%) and RingCentral (up 163.6%). Its revenue multiple was unchanged from a year ago at 1.8x, while its EBITDA multiple rose to 9.0x from 7.6x.
We counted 12 total transactions in the Communications Service Provider sector over the past three months, down from 20 in our summer report. Only two of these transactions had announced purchase prices, for a total announced transaction dollar value of $227 million. Through the first nine months of 2026, there have been 54 transactions with $2.3 billion in total announced transaction dollar value. Annualized, the 72 transactions would be roughly in line with 2024 (71) but below 2022, 2023 and 2025. The approximately $3.1 billion in annualized value would trail 2023 ($3.9 billion) and fall well short of 2024 ($30.8 billion) and 2025 ($48.3 billion).
The Business and Wholesale sub sector accounted for six transactions this period, including both of the deals with an announced transaction value. The largest was the $206 million acquisition of business communications provider Sangoma Technologies by BRC Group Holdings. Michigan Broadband Services also acquired the Educational Access Network, which holds licensed 2.5 GHz spectrum, from Northern Michigan University for $21 million. Managed connectivity services and other asset light providers also accounted for several deals in the period. COEO Solutions, which acquired S-Net Communications last period, acquired the NetWolves network services business of Vaso. In addition, Amplix acquired OneConnect, and Endeavor Managed Services acquired Verizon partner Unified Connection.
The Residential Providers sub sector also had six transactions, down from nine last period, and none had an announced purchase price. The most notable was the investment in wholesale residential fiber platform Eaton Fiber by Bain Capital and Tillman Global Holdings. In conjunction with this investment, Eaton Fiber also announced its acquisition of Ripple Fiber. Among regional broadband providers, Clearwave Fiber acquired Visionary Broadband, which serves communities in five western states, and IdeaTek acquired Wave Wireless in southeastern Kansas. As an encore to its purchase of Velocity Fiber in our summer report, Vero Broadband acquired MontanaSky Networks this period. Finally, GiGstreem acquired multifamily managed Wi-Fi provider Aerwave.
The Sangoma Technologies acquisition was the only transaction with announced multiples this period. BRC Group Holdings paid 1.0x revenue and 32.0x EBITDA for Sangoma. The EBITDA multiple reflects Sangoma Technologies’ thin EBITDA margins and the likely expectation by the buyer that these margins can be improved.
Richard Pierce
Managing Director
Managing Director
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