Ten Developments for Enterprise Users to Watch in 2018
March 5, 2018 | by Kevin DiLallo & Laura McDonald
As we move into 2018, there are a number of things we think our clients and other enterprise telecom/IT users should look forward to (or gird themselves for) this year. Telecom and IT are always changing, but this year could be one for the record books. Here are ten developments that may impact enterprise customers (in no particular order):
1. Effect on enterprise customers of the acquisitions of Level 3 by CenturyLink and of XO by Verizon
Two major acquisitions closed in 2017 that will have ripple effects for enterprise users this year: Verizon acquired XO Communications, and CenturyLink acquired Level 3. Besides the removal of two competitors from the market – which reduces enterprise users’ choices and inevitably leads to higher prices – both corporate takeovers have less obvious impacts on the market and enterprise buyers. On the flip side, as with many mergers, both Verizon and CenturyLink stand to save money – in Verizon’s case, an estimated $1.5 billion, and in CenturyLink’s case, some $975 million annually – due to efficiencies resulting from the consolidations. That probably means layoffs, but it is unlikely to translate into lower rates or better service for enterprise users.
For Verizon, the acquisition of XO was a brilliant gambit that will further strengthen its position as the leader in wireless services with the introduction of 5G services. First, Verizon has leased spectrum from XO that will prove invaluable in the deployment of spectrum-hungry 5G services. Second, XO had a substantial inventory of dark fiber in major metropolitan areas that Verizon can leverage to upgrade its backhaul plant. Robust, reliable 5G services will be a boon to business, even if Verizon, with its considerable market share, is the provider.
All that fiber – including 45 metro areas and 4,000 buildings – will enable Verizon to bring Ethernet services to more customers, and strengthen its position in business broadband services, otherwise known as special access. According to regulatory filings by Verizon and XO, 96% of the buildings their combined fiber reaches are served by at least two other fiber providers