The Resurgence of Telecom and Infrastructure in Post-Conflict Emerging Markets: A New Era of Opportunity

In the shadow of geopolitical turmoil, emerging markets have long been seen as volatile and risky. Yet, history shows that stability—when it finally arrives—can unlock extraordinary value in sectors like telecommunications and infrastructure. Nowhere is this more evident than in Ukraine, where the war with Russia has forced a reimagining of connectivity and infrastructure resilience. As peace becomes a tangible possibility, investors are beginning to recognize the potential for a dramatic rebound in assets that were once undervalued due to conflict.

Ukraine's telecom sector, once a fragmented and underperforming market, has become a case study in post-conflict adaptation. From 2020 to 2022, the country laid the groundwork for a digital revolution, with operators like Kyivstar, Vodafone Ukraine, and Lifecell investing in 4G expansion and infrastructure sharing. But the Russian invasion in 2022 shattered this progress. Over 500 mobile base stations were destroyed, and cyberattacks targeted critical systems. Yet, the sector's response was nothing short of heroic. National roaming agreements, emergency power solutions, and partnerships with SpaceX's Starlink kept networks alive, proving the sector's operational resilience.

The real turning point came in 2024, when a $435 million merger between Lifecell and Datagroup-Volia, backed by the EBRD and IFC, signaled a new phase. This deal, led by French investor Xavier Niel, created the second-largest telecom operator in Ukraine, combining mobile and fiber broadband assets. It was not just a business move but a vote of confidence in Ukraine's post-war future. The merged entity now aims to accelerate 5G deployment and expand fiber coverage, with the government planning a two-year 5G pilot program by late 2023.

The broader implications for emerging markets are clear. Ukraine's experience demonstrates that conflict-driven undervaluation can be reversed when stability returns. Telecom and infrastructure assets, often dismissed as too risky, can become high-growth opportunities. The key lies in identifying markets where reconstruction efforts are backed by international institutions and where regulatory frameworks align with global standards. Ukraine's 2022 telecom law, for instance, harmonized its regulations with EU norms, attracting foreign capital and streamlining licensing processes.

Beyond Ukraine, similar dynamics are emerging in regions like the Balkans and parts of Africa, where post-conflict recovery is gaining momentum. The World Bank's “Conflict Resilience Framework” highlights how data-driven approaches—such as satellite imagery and crowdsourced analytics—can prioritize infrastructure investments. This model, tested in Ukraine's transport networks, could be replicated elsewhere, reducing the time and cost of rebuilding.

For investors, the lesson is twofold. First, early entry into post-conflict markets can yield outsized returns. Ukraine's telecom sector, for example, is projected to require $4–5 billion in investment over the next decade, with 5G and fiber broadband driving growth. Second, partnerships with multilateral institutions like the EBRD and IFC mitigate risk. These organizations not only provide funding but also offer technical expertise and political guarantees, making projects more bankable.

However, caution is warranted. Geopolitical stability is never guaranteed, and reconstruction timelines can be unpredictable. Investors should focus on sectors with clear demand, such as digital infrastructure, which is essential for both economic recovery and national security. Ukraine's push for Starlink's “Direct-to-Cell” technology, for instance, underscores the strategic value of resilient telecom networks in post-conflict environments.

In conclusion, the path to value resurgence in emerging markets lies in embracing the opportunities created by peace. Telecom and infrastructure assets, once seen as too volatile, are now positioned to lead the next wave of growth. For those willing to navigate the risks, the rewards could be transformative. As Ukraine's story shows, the most undervalued markets often hold the greatest potential when stability returns.

Investment Takeaway: Consider allocating capital to emerging market telecom and infrastructure funds with exposure to post-conflict regions, particularly those with multilateral backing. Monitor regulatory developments and reconstruction timelines closely, and prioritize sectors with dual-use applications (e.g., military-civilian connectivity). The next decade could see a telecom renaissance in emerging markets, driven by peace, innovation, and strategic investment.