After the year 2020 has been, it's almost scary to to try to make predictions for 2021. But in the world of telecom and internet infrastructure, things haven't been as crazy as they could have been, and traditions must be upheld. So what's coming down the pike for those who have kept the world connected despite it all this year? Let's take a look at the crystal ball once again:
- The pandemic wanes by the time Memorial Day arrives. A few months of vaccine rollouts to the most vulnerable will reduce the death rate even if most don't have it yet. That will take the edge off, and in-person conferences will restart by late Spring at least in a few cases. It'll feel weird again to shake hands with people though, that may take a little while longer to restart -- but it shall, and once it does it will quickly become a flood of personal interaction.
- Infrastructure spending will outpace overall economic growth. If there's anything the past year made the case for, it's planning ahead for the capacity and reach needed to keep up with bandwidth demand. The needs of 5G and other nextgen technologies are even closer at hand, and we spent the last year more keeping traffic from flooding what we have than we did getting ready for what is to come.
- Working from home will remain with us. Some of it will wane, but as a society we are so much better at this now that its benefits are clearly apparent. A whole lot of things that *could* go back into the office *won't*, simply because it's more efficient this way now that we have figured it out. That goes for the economy as a whole, but in the telecom and internet infrastructure world it has been more true than almost anywhere.
- The great IX decentralization that has been going on will continue. Each of DE-CIX and AMS-IX will open at least one brand new market, and other currently local players will turn metro IX footprints into regional ones around the world.
- M&A will pick up, both in the US and in Europe. Given the conditions, it was surprising how many deals actually did happen in 2020. But there were plenty that didn't, partly because there is always less urgency when two sides aren't in the same room, partly because of the uncertainty inherent in these times, and partly because the idea of integrating assets and teams is a bit more daunting when we're all doing it from home. Now for some specifics to ponder (and laugh at next year)
- Crown Castle will sell off its fiber division, or at least the non-backhaul part of it. The lure of integrating tower and metro fiber isn't as strong as it was and Crown has never really warmed to the non-backhaul part of the business. Also, the prospect of integrating tower and edge colo is stronger now and they may look more toward that side of things.
- FirstLight, Everstream, Lumos, and Bluebird will each make at least one small M&A purchase in 2021. Last year I predicted (incorrectly) that there would be consolidation among this group of US regional providers. But they proved more interested in both organic and inorganic expansions within and adjacent to their footprints. The infrastructure funds behind each will continue down that path for 2021, as there is still runway available.
- I-Squared will either sell off some pieces of GTT's mostly-European infrastructure biz, or split them up. The combination of intercity fiber, metro fiber, data center, and transatlantic connectivity they are buying isn't really a cohesive business yet, and they will move to make it so. The likeliest move is perhaps that the transatlantic business will find itself in new hands, perhaps with Telxius or AquaComms or perhaps just as a separate platform again.
Ok, that's it for me. Anybody have any other thoughts on what might happen in 2021? Leave them in the comments below, and I'll add my thoughts.
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