- 80% of respondents to an AlixPartners survey predict increased M&A activity in the fiber market in the next 12 months
- The highest M&A activity will target companies with under 500,000 fiber passings
- Things that keep fiber operators up at night are not the same for investors
Disconnects between fiber operators and fiber investors abound when it comes to industry challenges, according to the consultants at AlixPartners, which conducted a survey in July and August.
When the firm asked 100 operators and investors about some of the challenges that fiber operators are facing, 44% of investors thought construction complexity was a big concern; while only 20% of operators were concerned about construction.
Conversely, operators are worried about their business models, with 47% citing competitive pressure from fixed wireless access (FWA) and cable, and 64% worried about the future of their average revenues per user (ARPU). Investors were much less concerned about these issues.
At a time when the fiber market is poised for a lot of consolidation, the disconnect between operators and investors is puzzling.
Andrej Danis, partner, managing director and head of AlixPartners’ Digital Infrastructure Practice for the Americas, said operators are experts at fiber construction and aren’t too concerned about that. “The operators see the problem is competition,” said Danis. “Operators know their markets. If they tell you that cable and fixed wireless is a competition, then believe them.”
In fact, the investment banking firm Moorgate Capital Partners said in a September report that companies such as T-Mobile, Verizon and AT&T are continuing to add FWA customers at a pace of 3-4 million per year. Telcos have already garnered more than 13 million FWA customers in five years, and FWA is an all-new revenue stream for them, so they’re motivated to continue growing.
Fiber operators are also quite concerned about average revenue per user (ARPU) because they anticipate more competition and less opportunities to deploy in new areas where they can achieve high penetration rates.
“There are increasingly less places for operators to deploy fiber and profitably grow,” said Danis. Meanwhile, investors still hope they will get as much as 50% penetration on new builds.
Both AlixPartners and Moorgate think the fiber market is at a natural point of evolution where consolidation is inevitable, and players are looking to either buy or sell because they need to scale or exit the business, entirely.
According to the AlixPartners' survey, 80% of respondents predict increased M&A activity in the next 12 months, and 61% are planning to participate directly.
The apples are about to fall off the tree
Last year, AlixPartners conducted a similar survey, and it determined that about 400 fiber providers were ripe for the picking in the U.S.
It predicted that consolidation was on the brink of happening and that it would begin with large operators buying mid-tier operators. And that turned out to be very true in 2024.
Verizon is buying Frontier Communications for $20 billion. There is very little overlap between the two footprints across 31 states.
Bell Canada recently closed on its purchase of Ziply Fiber for about $5.1 billion, making Bell Canada the third largest fiber internet provider in North America, after AT&T and Verizon.
One of the biggest deals announced this year is AT&T acquiring the Mass Markets fiber-to-the-home business of Lumen Technologies for $5.75 billion.
Ninety-five percent of respondents to AlixPartners’s survey believe the highest M&A activity will target companies with under 500,000 fiber passings.
Moorgate analysts concur, writing, “The high volume of broadband M&A activity in the YTD 2025 period is expected to continue. Small and mid-size FTTH platforms are increasingly evaluating mergers and acquisitions.”
“The amount of passings that are still out there at a good price is getting less and less,” said Danis. “That means that we are entering a phase where consolidation and scale and value creation out of efficiency will define the next wave.”
But this consolidation phase won’t last forever. It will likely last about two years, and then it will slow down. That’s the typical pattern. After that, there won’t be many more places for small fiber operators to find good deployment opportunities with high penetration opportunities.
Don't miss Broadband Nation Expo, the ultimate event for end-to-end broadband deployment and innovation set for November 17-19, 2025, in Orlando, Fla. Register today.