Private equity firm KKR sinks $100M into improving rural mobile networks

Kohlberg Kravis and Roberts, a multinational private equity firm, has taken an interest in the state of rural mobile connectivity. The company said on Monday it has taken minority stakes in three rural wireless infrastructure businesses run by Associated Partners. Though KKR didn’t reveal an exact amount, the Wall Street Journal pegged its initial investment at $100 million with potentially more to follow.

The three companies are: PEG Bandwidth, which builds ethernet backhaul networks to cell towers; AP Wireless, a company that acquires interests in tower and rooftop leases; and AP Towers, which buys and builds towers around the country. KKR has invested in or bought telecom companies in the past — it was even one of the finalists to buy massive rural carrier Alltel in 2007 — but most of its infrastructure investments are centered on the energy market.

But as Associated Partners Managing Director Scott Bruce pointed out, there are a lot of similarities between today’s wireless and energy infrastructure businesses. “As the shale revolution is driving the growth of natural gas pipelines to transport molecules, the advent of the smart phone is driving a similar wireless explosion to transmit electrons,” Bruce said in a statement. “Wireless communication networks are an essential component of the nation’s infrastructure.”

Most carriers are focusing their LTE rollouts on cities and towns, while rural operators serving the vast interior spaces of the U.S. have found it extremely difficult to keep up. One of the biggest obstacles to bringing mobile broadband to rural areas is getting adequate backhaul. It doesn’t matter how fast your connection to the tower is if there isn’t an equally fast backhaul link connecting you to operator’s fiber backbone.