Telecommunications infrastructure—anchored by towers and fiber networks—has long been a cornerstone of digital connectivity and a resilient investment class. Today both asset types face a shared inflection point: Traditional growth engines are slowing, even as demand for connectivity accelerates and diversifies, driven by data-intensive applications and new compute architectures.
Over the past two decades, telecommunications towers (which provide the physical locations for radio equipment that enables mobile connectivity) have benefited from rapid mobile adoption, network densification, and growing tenancy. Fiber networks, which form the backbone of fixed broadband, mobile backhaul, enterprise connectivity, and long-haul connectivity, have replaced copper as the future-proof wireline technology, delivering stable, infrastructure-like returns.
As coverage has expanded and markets mature, however, both towers and fiber face slower rollout and challenges to maintain utilization growth. These dynamics are pushing operators and investors to rethink how value is created, sustained, and differentiated across the infrastructure stack.
Though both remain foundational assets, the next phase of value creation will favor players that move beyond passive ownership and reposition their infrastructure as dynamic platforms at the center of the digital economy.
What’s at stake?
Despite slowing deployment, infrastructure executives remain optimistic. In towers, 98 percent of executives expect long-run profitability to increase, reflecting confidence in the sector’s ability to generate a second wave of value. For towers, the opportunity lies less in adding new sites and more in extracting additional value from existing assets. Future growth will depend on tenancy optimization, selective densification, and expansion into adjacent services including small cells, private networks, and edge data centers, rather than footprint expansion.
Fiber coverage has similarly reached scale—with approximately 80 percent of Europe, 70 percent of Asia–Pacific, and 60 percent of North America. Executives nevertheless expect rollout to continue, adding roughly 15 percentage points of additional coverage globally over the next five years. While rural and subsidized builds remain relevant, a new stimulus for growth is emerging: the rapid expansion of data centers, particularly in Tier 2 cities, where grid constraints and compute demand are reshaping fiber routing and investment priorities. Beyond coverage, the largest value pool lies in improving take-up, minimizing future duplication, and expanding the range of services delivered over fiber infrastructure.
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Who are the key players and stakeholders?
In towers, key stakeholders include independent and telco-owned tower companies; mobile network operators as anchor tenants; infrastructure investors; and regulators governing site permitting and spectrum usage. Public authorities and enterprise customers are increasingly relevant as nontraditional tenants. More recently, there is growing interest in towers as potential locations for distributed compute supporting AI inference workloads, although this remains at an early stage.
The fiber ecosystem is broader and increasingly interconnected. It includes fiber operators, fixed and mobile service providers, infrastructure investors, hyperscalers, enterprise customers, public-sector stakeholders, and data center operators. Telecom operators remain the primary deployers of fiber infrastructure, but ownership and influence from specialized infrastructure players and investors continue to grow. Regulators play a critical role, shaping wholesale access models, fiber migration policies, and rural deployment subsidies. Adjacent participants—such as energy providers, private-network users, and edge data center customers—are becoming more important as fiber players extend their scope.
What are the recent important developments?
First, tower valuations have declined, with average transaction multiples falling from approximately 22 times EBITDA in 2022 to around 17 times in 2025, reflecting market maturity and slower organic growth. In response, attention is shifting away from pure site expansion toward active equipment, energy management, and operational efficiency.
Fiber deal multiples have likewise declined, albeit at a more modest pace, from 20 times EBITDA in 2022 to around 19 times in 2025. Fiber deal activity has also slowed, dropping at an annual rate of 20 percent between 2022 and 2025. Owners appear reluctant to sell at lower prices, leading to longer holding periods.
Third, massive investment in data centers to support AI workloads—both training and inference—is reshaping fiber demand. Constraints on grid power in major hubs are driving new subsea, long-haul, and metro fiber builds, particularly toward secondary markets and Tier-2 cities that can support incremental compute capacity.
Finally, low-Earth-orbit (LEO) satellites are emerging as a complementary technology. Executives expect LEO to capture close to 20 percent of existing fiber’s addressable market, particularly in hard-to-reach areas, reinforcing a hybrid connectivity model rather than direct substitution.
What are the biggest challenges?
Both asset classes face structural constraints. Towers confront expiring or renewing anchor-tenant contracts and limited greenfield rollout opportunities, putting pressure on revenue growth. Fiber networks—particularly consumer-focused builds—struggle with low take-up rates, often near or below the roughly 30 percent threshold required for sustainable profitability. This challenge is compounded by overlapping networks and slow migration from legacy copper infrastructure.
Across both sectors, expansion into new services—such as active equipment, energy management, or enterprise connectivity—requires new capabilities and presents new risks, altering the traditionally infrastructure-like investment profile. Regulatory complexity, overbuilding, and operational inefficiencies further complicate value capture.
The telco reinvention: How AI can fuel value creation
What does it take to succeed?
Six levers underpin successful value creation:
- consolidation and optimization to unlock scale efficiencies and avoid duplicative networks
- selective new rollouts, using more efficient designs such as small cells, “street work,” or targeted expansion into Tier 2 cities to support AI infrastructure growth
- extending the scope of services, including radio access networks (RANs), energy management, and operations and maintenance for tower operators; and active services, enterprise connectivity, and cloud interconnection for fiber players
- growth in adjacent areas, such as small cells, distributed antenna systems, private networks, and edge data centers
- boosting tenancy and take-up through wholesale models, faster fiber migration, and nontraditional tenants
- operational efficiency, leveraging AI, analytics, standardized processes, and energy optimization, to reduce costs
What should leaders be watching over the coming year?
Key developments include the pace of tower and fiber consolidations; adoption of active-equipment and energy-management models; regulatory progress on fiber migration; the real impact of LEO satellites on capital allocation; and the accelerating race to build fiber infrastructure that supports AI-driven data center growth.
More broadly, success will hinge on whether infrastructure players can transition from narrowly defined, real-estate-like models toward integrated, engineering-led platforms—while preserving the stability investors expect.
