According to Alix Partners, private equity's approach to fiber network investments is evolving. With rising costs of capital, many investors are reassessing their strategies.
Andrej Danis remarked that internal rate of return (IRR) started to deteriorate, impacting cash flows from existing customers and causing concerns over high buildout costs.
Danis highlighted a looming consolidation period among fiber operators, pinpointing many with revenues between $10 million and $100 million as targets for private equity consolidators.
For network operators preferring acquisition, Danis advised to avoid distressed situations, emphasizing that those failing to manage costs well may attract downfalls.
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