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Report: Digital, telco deals collapsing due to cyber risks

March 26, 2026

Nearly two-thirds (65 per cent) of investors have had a Digital & Telecoms infrastructure deal fall through in the past three years as a result of cyber security risk, according to S-RM’s latest Investor Sentiment Report: Forces of Change – the highest reported cause of deal failure in the sector, ahead of regulatory instability (41 per cent) and geopolitical risks (37 per cent).

The report, which surveyed 150 global investors across infrastructure sub-sectors, revealed that cyber security risk is not only the leading cause of deal failure but also the biggest factor shaping investment decisions in the Digital & Telecoms sector. More than three-quarters (76 per cent) of respondents cited cyber risk as influencing deal-making decisions, ahead of sustainability risks (75 per cent) and regulatory instability (72 per cent).

Top cyber security concerns affecting Digital & Telecoms deals

 

Digital & Telecoms infrastructure stands out as uniquely exposed to cyber threats due to its critical role in supporting data, connectivity and digital services. Investors identified several cyber-related issues that have most impacted transaction activity:
Cyber security risk factor
Total
Exposure to ransomware and cyber extortion
58%
Weaknesses in operational technology and network security
52%
Third-party and supply chain cyber vulnerabilities
47%
Data protection and privacy risks
44%
Legacy systems and outdated infrastructure
39%
 
Balancing risk and opportunity

Despite these risks, investor appetite for Digital & Telecoms infrastructure remains robust. Nearly four in five investors (79 per cent) rate the sector as an attractive investment opportunity over the next five to ten years, making it the most attractive infrastructure segment ahead of Energy & Environment (75 per cent), Social (71 per cent), and Transport & Logistics (67 per cent).
Investors also expect cyber risks to intensify. Over the next three years, 55 per cent anticipate cyber security risks will increase, while 31 per cent expect them to remain at current levels, indicating sustained pressure on deal execution and asset resilience.
Encouragingly, investors are responding by directing more resources toward resilience. Cyber security ranks as the top non-financial risk area attracting increased budget allocation, signalling that investors are actively strengthening cyber capabilities across assets and portfolios to protect value and maintain deal certainty.
Ian Massey, Head of Corporate Intelligence, EMEA at S-RM, commented: “Investors in Digital & Telecoms infrastructure are navigating a market where cyber risk has become a defining factor in deal success. As assets become more connected and operational technology more exposed, cyber resilience is increasingly determining whether transactions proceed, alongside broader geopolitical and regulatory pressures. Encouragingly, investors have recognised cyber security as the primary threat to value and are allocating greater resources to managing and mitigating these risks. With threats expected to intensify over the coming years, those who embed cyber resilience early in the investment lifecycle will be best placed to protect value and capitalise on continued demand for digital infrastructure.”

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