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As a new leadership team prepares to take office in Washington in January, the telecom industry is poised for significant change in 2017. At the top of the agenda is the fate of the AT&T–Time Warner mega-merger, which increasingly looks likely to clear potential antitrust and net neutrality hurdles. These developments will shape the marketplace and affect enterprise customers across the sector.
Below are the key themes and trends business customers should watch in the coming year.
Merger activity on the rise
Regulatory shifts make it likely the AT&T/Time Warner merger will be approved, and broader merger-and-acquisition activity is expected to accelerate. One possible next move is renewed interest in a Sprint–T‑Mobile combination, a deal regulators blocked in 2011. Meanwhile, the Verizon–Yahoo arrangement faces uncertainty after Yahoo disclosed massive breaches affecting more than a billion accounts.
Global carriers are under pressure to consolidate to remain competitive. With a new administration in the United States that is expected to take a more permissive approach to corporate combinations, U.S.-based carriers may revive deals that have been on hold. Historically, the U.S. has lagged other regions in telecom consolidation, and 2017 is likely to see a catch-up phase.
M&A activity is also strong in the cloud market, where consolidation among providers will continue. Observers will be watching whether companies like Google expand further into carrier-like services beyond existing efforts such as Project Fi, and whether other cloud players move deeper into the connectivity space.
More subsidies on the way
Subsidies have evolved from devices to data plans, and the industry may see additional creative subsidy models aimed at enterprises. The impact of AT&T’s acquisition of DirecTV showed how bundled offerings can reshape consumer behavior; similar strategies could trickle into enterprise offerings. For example, partnerships between major cloud platforms and carriers might lead to subsidized enterprise data plans supplied as part of a broader service package.
At the same time, carriers continue to shift away from subsidizing device purchases. Major operators are moving toward financing or outright purchase models, stepping back from managing device procurement. Their strategic focus is increasingly on delivering wider, more reliable networks rather than handling the logistics of devices.
It’s all about the cloud — and will continue to be in 2017
The ongoing migration of business workloads to the cloud means service quality, security, and reliability will play a larger role in how enterprises negotiate vendor contracts. As enterprise customers gain bargaining power, expect more competitive pricing and tougher contract terms from cloud providers.
Businesses will demand clearer service-level agreements, stronger security commitments, and better support for compliance and integration. Vendors that can demonstrate robust delivery, predictable performance, and transparent pricing will have an advantage in enterprise procurement.
Microsoft domination
Microsoft’s push to own enterprise endpoints through Office 365 and Windows 10 raises important questions about mobile device and application management. As Office 365 native apps proliferate across mobile workforces, third-party mobile application management (MAM) providers are being forced to adapt.
Microsoft’s closed APIs make it difficult for third parties to monitor and control Office app behavior, such as file handling between Word or PowerPoint and other applications. As a result, enterprises seeking granular control over corporate content and data may face a choice: adopt Microsoft’s enterprise mobility management (EMM) solution, Intune, or operate dual EMM strategies—one general-purpose EMM for most devices and a separate Intune deployment to manage Office apps.
The Internet of Things will continue to expand
IoT is moving from experimental projects to commercially compelling applications as component costs fall and device capabilities improve. Low-energy Bluetooth and similar technologies are becoming cost-effective and energy-efficient enough to support broad deployments. Advances such as longer battery life, remote bulk updates, and mesh networking make these technologies practical for industries like logistics, manufacturing, healthcare, and retail.
As IoT deployments scale, expect increased demand for secure, reliable connectivity, edge-processing capabilities, and integration with cloud services. The companies that provide robust ecosystems—combining hardware, connectivity, and cloud analytics—will be well positioned to capture enterprise IoT spend.
Overall, 2017 looks set to be a transformative year for telecom and cloud services, with consolidation, shifting subsidy models, cloud-driven procurement changes, Microsoft’s growing influence in enterprise endpoints, and accelerating IoT adoption all shaping the competitive landscape for business customers.