Analysts: Trump Administration Poses Hurdles for Telecom, IT

Donald Trump

With Donald Trump set to be the nation’s 45th president, analysts are weighing in on how his administration could impact IT and telecom in the coming years.

451 Research's Nick PatienceDuring his campaign, Trump promised to revive the U.S. economy by cutting taxes, preventing companies from making products overseas, renegotiating trade accords and imposing tariffs on imports from countries like China.

Nick Patience, research vice president at 451 Research, said the end of free trade will result in “tariffs galore.” In particular, this will affect Chinese tech manufacturers, he said.

“Immigration changes will have a grave effect on tech firms’ abilities to hire programming talent, thus reducing their competitiveness compared to countries with more enlightened visa programs,” he said. “As every company (becomes) a tech company, that is going to impact every medium-to-large company, not just the likes of Google and Facebook.”

Uncertainty also will slow IT spending, Patience said.{ad}

Frost & Sullivan's Brent IadarolaBrent Iadarola, Frost & Sullivan’s vice president of mobile and wireless communications, said Trump’s general stance of a slowdown in government regulation likely translates to a more tempered role for the Federal Communications Communication (FCC).

“Trump is not a traditional Republican, but a very individualistic populist,” he said. “Contrary to many of his Republican colleagues, he has publicly opposed the AT&T-Time Warner Cable merger, suggesting media consolidation is already providing too much influence to select corporations.”

A Clinton administration would have strongly supported Net neutrality, Iadarola said. Trump, however, opposes Net neutrality, arguing that the principle generally slows down private sector innovation and “will target conservative media,” he said.

Ovum analyst Aneil Rakity said it remains to be seen how Trump’s presidency will impact significant cross-market mergers, like the AT&T-Time Warner deal.

“Donald Trump explicitly stated that he would not approve the deal, and opposed further consolidation in the media industry, stating that he would favor a breakup of the likes of Comcast and NBC,” he said. “Nonetheless, it remains to be seen whether such statements will end up reflecting the stance of an administration once it takes power. Also, the AT&T-Time Warner merger is likely to fall within the powers of the FCC because Time Warner holds some broadcasting licenses.”

Trump’s presidency also could impact global public cloud adoption, said Ovum analyst Roy Illsley.

“AWS, IBM and Microsoft Azure are the three leading global public cloud providers, and they have built a presence in many different countries and regions,” he said. “However, the expansion has been primarily driven out of U.S.-based data centers or those in selected locations such as Singapore, Hong Kong, and EMEA. The rhetoric coming from President-elect Trump is that it will be an America-first approach to trade and business. While this appears to be aimed at the manufacturing sector, cloud computing could become caught up in a global retrenchment to a nationalistic approach to business by other countries in response.”

Wall Street seems to share some of the concerns. While blue chips helped push the Dow up 221 points Thursday (as of 3:57 p.m. ET), the tech-heavy NASDAQ was down 40.

Disagree? Will the Trump administration have a positive impact on telecom, IT and your business? Let us know below in Comments.

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