Telco 2.0™ Research

The Future Of Telecoms And How To Get There

Trump's Impact: Global TMT Scenarios

Summary: US President-elect Donald Trump made many statements during the campaign, but now that he has won the election what will his administration do? In this report we look at five key areas for the TMT sector and analyse how we think Trump's presidency is most likely to impact them. (Executive Briefing Service, November 2016)

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Below is a short extract from this 10 page Telco 2.0 Report that can be downloaded in full in PDF format by subscribers to the Executive Briefing Service here. To find out more about how to join or access this report please see here or call +44 (0) 207 247 5003.  

Predictions are difficult with Trump

On Wednesday, November 9th, Donald J. Trump won the 58th US presidential election. During his campaign Mr Trump made many statements. Now that he has won, we look beyond the rhetoric and initial political shock and uncertainty at what he might actually do and how this could affect the TMT sector.

This is a difficult task because, to date, Trump has not made many detailed statements about his policies. During the campaign he made many declarations, but these will not necessarily translate into bold policy decisions. Indeed, within one week of being elected his rhetoric has become more measured and he has already changed his stance somewhat on Obamacare and immigration. 

Trump is now in the process of choosing his senior advisors and cabinet, and these choices will indicate more about what his presidency will be like than his behaviour during the campaign. At the time of writing, only two senior advisors had been chosen, Reince Priebus as White House Chief of Staff and Steve Bannon as Senior Counselor to the President. Neither of these positions require Senate approval. Priebus has served as the chair of the Republican National Committee since 2011, so is a reassuring choice for establishment Republicans, but Bannon is much more controversial. Bannon was until his appointment the executive chairman of Breitbart News, a far-right website. His appointment as Senior Counselor to the President has caused dismay among liberals, but leading Republicans have declined to criticise the appointment, calling for party unity instead. 

We expect that deciding Trump’s cabinet will be a difficult and turbulent process and will take some weeks to settle, as Trump will have to put some of his own views aside in order to choose a cabinet that the broader Republican party will approve. Although Trump has indicated that he will work with the party through his choice of Priebus, his choice of Bannon indicates that he is not afraid of pushing the boundaries. We therefore expect to see some more controversial choices in the next few weeks, but whether these get approved by the Senate is another matter.

From a TMT perspective, the most important appointment will be the Attorney General, which will need Senate approval. Another position of interest to the TMT sector is the chair of the Federal Trade Commission (FTC). Trump can choose a new chair of the FTC from its commissioners, who are confirmed by the Senate. Although there should be five commissioners there are currently only three, and Trump could decide to replace the current, Democrat chair with a Republican, and also nominate more Republicans as commissioners. The Attorney General and FTC roles are important because they will influence Trump’s position on data privacy and security, consumer protection, and antitrust, which are key issues for the TMT industry.

Two potential scenarios affecting five key areas for TMT

Because of the uncertainty around how Trump will behave as president, rather than try to definitively predict what he will do, STL Partners has decided to focus on five key areas for the telco industry and developed two scenarios which may play out under a Trump presidency, as outlined in the table below.

Scenario name Description
Hardline Trump leadership Trump’s leadership decisions closely match his most extreme campaign rhetoric; he leads the US into a period of right wing, isolationist politics.
Moderate Trump leadership Trump’s leadership decisions are more moderate; he listens to advice from the wider Republican party, is moderated by Congress and the Senate, and does not follow through on extreme claims, such as the wall preventing illegal Mexican immigrants reaching the US.

Source: STL Partners

We run through the five areas below, discussing what is known about Trump’s views and what might happen under each scenario, as well as highlighting our view on the most likely outcome.


...to access the other 8 pages of this 10 page Telco 2.0 Report, including...   

  • Predictions are difficult with Trump
  • Two potential scenarios affecting five key areas for TMT
  • 1. Net neutrality
  • What we know of Trump’s views
  • Potential outcomes under the scenarios
  • 2. Tech companies
  • What we know of Trump’s views
  • Potential outcomes under the scenarios
  • 3. AT&T’s proposed acquisition of Time Warner
  • What we know of Trump’s views
  • Potential outcomes under the scenarios
  • 4. Security
  • What we know of Trump’s views
  • Potential outcomes under the scenarios
  • 5. Trade
  • What we know of Trump’s views
  • Potential outcomes under the scenarios
  • Conclusion 

...Members of the Executive Briefing Service can download the full 10 page report in PDF format here. For non-members, to find out more about how to join or access this report please see here or call +44 (0) 207 247 5003. 

 

Technologies and industry terms referenced include: anti-trust, Apple, AT&T, consumer electronics, data encryption, FTC, international security, international trade, net neutrality, privacy, telco consolidation, Time Warner, US