UAE investor spends half a billion dollars on US fibre

Mubadala Investment Company is ploughing US$500 million into Brightspeed as part of a move to expand its portfolio globally.

The United Arab Emirates-based investor will take an unspecified minority stake in the US fibre builder, alongside Apollo Global Management, which bought Brightspeed and gave it its current name 18 months ago.

Brightspeed, which started life as an incumbent local exchange carrier (ILEC) business with operations across 20 states mainly in the Midwest and Southeast of the US, is making a lot of noise about its fibre rollout plans. It started serving its first customers with full fibre a month ago and now says it aims to cover “up to 3 million homes and businesses over the next five years,” which sounds like a slightly looser target than its previous goal of reaching 1 million by the end of this year. But time will tell on that score.

Either way, Brightspeed is part of a burgeoning fibre market in the US – essentially, we’re starting to see a similar fibre push and investment climate on that side of the Atlantic as we have witnessed in Europe in recent years – and Mubadala is clearly keen to get in on the ground floor.

“As a responsible global investor, Mubadala sees huge opportunity in supporting Brightspeed’s growth strategy in transitioning large swathes of the US to fiber connectivity and promoting digital equity and inclusion,” said Khaled Abdulla Al Qubaisi, CEO of Real Estate and Infrastructure Investments at Mubadala. “We’re delighted to be partnering with Apollo and Brightspeed to capitalize on the growth opportunities in fibre deployment and create not only sustainable, long-term value, but also support the digital infrastructure development across the US.”

That says it all, really. Mubadala has its eye on the potential for long-term returns that comes with infrastructure investments.

Indeed, the US is not its first foray into fibre outside its home market. Mubadala committed £800 million to UK fibre altnet CityFibre in two instalments in late 2021 and early 2022, and last year also invested US$350 million in pan-Asian data centre company Princeton Digital Group.

Mubadala’s involvement with Brightspeed provides further evidence that the fibre market is hotting up in the US. AT&T and Verizon are pushing on with their own fibre network rollouts, for example, while T-Mobile US is still at the dipping a toe in the water stage, but there is still talk of AT&T and T-Mobile brokering sizeable investment deals, although admittedly the rumours seem to have died down a bit in that regard.

But the more companies like Brightspeed publicise their fibre plans, the more others will follow suit.

“We are in the early stages of our company’s growth trajectory, and we are grateful for Mubadala’s endorsement of Brightspeed’s vision and strategy. The added investment from another well-respected institutional investor is a testament to the value we will create and the connections we will enable for homes and businesses across our 20-state footprint,” said the telco’s chief executive Bob Mudge.

Naturally, the company will need take-up as well as coverage. It will be interesting to see what information it shares publicly as the network rollout project progresses.

Get the latest news straight to your inbox. Register for the Telecoms.com newsletter here.