Entering a new year holds many opportunities and challenges for telecommunications service providers and customers. What’s hot and what’s not? Who will make a big move? How will the financial markets play a role in mergers and acquisitions? Who will be the winners and losers for 2019? No one knows for sure, but there’s one thing you can always count on in the telecom space –“the only constant is change.”
Here’s what to watch this year:
- Security moves to priority status. With the increase in breaches and security lapses, one could make the argument that security is already the top priority, but not to the extent that it will be. With the 2020 election season on the way (remember the DNC hack in 2016), the Internet of Things (IoT) discussions heating up, and a whole lot of people figuring out how to better automate literally everything, there is even more attention on how our information can be used maliciously and how to keep it safe. “Alexa, stop listening. I want my privacy back!” Good luck with that.
- 5G will happen. –But it will be uninspiring. The ongoing preparations for 5G and the grand illusions in the infrastructure world won’t match up because the service providers focus will be on the infinitely picky consumer markets. Bandwidth speed is just the vehicle for the next big app, and the waters are too muddy to discern what form that will take. 5G won’t really start making hay for at least another 2-3 years.
- Zayo could go private. In recent polls Zayo has frequently been at the top list of both buyers and sellers. Unfortunately for Zayo, the past two quarters have been rough operationally. Private equity firms are chasing infrastructure opportunities and they may see Zayo as an easy target. However, Zayo may not have the appetite for PE firms to outbid them. Therefore, my money is on Zayo taking the company private. Caution: I’m not a financial Guru, so don’t bet real money. Bet Monopoly money! 😊
- Sprint and T-Mobile will merge. It will be touch and go, but it will happen. Staying out of the “Ultimate Fighting cage match” of politics with the 2020 election campaign ramping up will be messy for sure, and it will make the merger even harder to accomplish. Of course, with any big merger there will be massive job losses as the new company will go through a reduction in force to eliminate duplications and overlap. With all the noise of the elections coming into view, it will be difficult for the opponents of this merger deal to focus enough outrage. So the deal will be done!
- Infrastructure M&A will slow down. Potential M&A firms will be focused more on the cloud, software and data center markets. With multiples remaining high (coupled with the target list being very sparse), I’m thinking there won’t be many deals this year unless there is a cloud or software component attached to it. However, with that said, you may see a few, but they will be smaller and nothing earth shattering.
These are my predictions, so hold on to your hats and enjoy the ride! 2019 should be interesting for sure.
If you’d like to discuss this article or how your telecom infrastructure can work better for you in 2019, contact us at firstname.lastname@example.org or 703-939-8240.