Cable is the most popular type of internet connection in the U.S. today, according to the Fiber Broadband Association and RVA LLC Market Research and Consulting. However, a faster, more reliable, and more secure alternative is gaining ground. Fiber is the next step in the evolution of internet access, and a potentially transformative technology.

However, fiber internet isn’t an option in much of the U.S. today because many homes and apartments don’t have the infrastructure to support it. As of 2023, about 51 percent of American households had access to fiber, according to the Fiber Broadband Association and RVA LLC Market Research and Consulting.

This is where Shah and EQT see the kind of investment opportunity the global investment firm has become known for, one with strong business fundamentals and the chance to make a positive impact. With more investment in fiber, Shah sees a chance to improve internet access for a significant portion of the American population.

“It’s one of the biggest opportunities we’re excited about,” Shah said.

Shah believes the widespread adoption of fiber internet will follow a trajectory similar to that of the smartphone. In their early years, smartphones were seen as expensive gadgets, but over time, as more of our social and professional lives came to rely on mobile apps, they became indispensable.

“Everything in your life is dependent on it,” Shah said of smartphones. “You’re really starting to see that with broadband in the home now.”

That trend has prompted large public companies like AT&T, Verizon, and Alphabet to offer fiber internet service and investment firms like EQT, Apollo, and KKR to buy fiber-internet providers. Governments have also stepped in, passing legislation to fund the installation of fiber and other types of high-speed internet, particularly in smaller, more remote communities that typically haven’t been a priority for internet providers. The most prominent example is the Biden administration’s 2021 Bipartisan Infrastructure Law, which included $65bn to expand high-speed internet access.

Even without subsidies, Shah sees fiber internet as a business well-suited for investors adopting a long-term approach due to the patience and focus it requires.

Taking the long view has paid off for Lumos. In 2023, Lumos built fiber to around 115,000 new homes, up from around 15,000 homes in 2021. Lumos CEO Brian Stading expects that kind of progress to continue.

“We expect rapid growth for the foreseeable future,” Stading said.

Another advantage strategic investors bring to the fiber-internet market is their ability to provide operational expertise through relationships with suppliers and industry experts. EQT connected Lumos to Karen Puckett, a former executive for the internet provider Lumen (then known as CenturyLink) who is now the chair of Lumos’ board of directors.

In addition to generating returns for investors, the expansion of fiber internet is beginning to transform communities across the U.S. At least one county has seen an influx of new residents who have been drawn to its fast, reliable internet, while businesses have found new ways to better serve customers and students no longer have to sit in their school’s parking lot to do their homework.

The transition to a world where people can work, learn, and care for themselves however they want is underway, and fiber internet is playing a key role in making it happen.

“It’s not theoretical,” Shah said. “This is all real.”