LTE, SDN and consolidation -- all will have profound effects on the telecom, carrier and service provider industries in 2013. Read on for our annual gaze into the telecom crystal ball.

If there's one trend in particular on which market observers are unanimously agreed, it's that carrier spending on long-term evolution (LTE) infrastructure is a front-and-center priority. ABI Research expects LTE subscribers to reach 785 million by 2017, up from the 58 million it tracked exiting 2012. Another researcher, IHS iSuppli, projected a few months back that LTE infrastructure spending will eclipse spending on 3.5G infrastructure spending for the first time in 2013 -- making it the primary source of spending in that space.

Stats like that mean that vendors with a stake in LTE -- from infrastructure providers to network optimizers -- are hustling to build that book of business now, and that latecomers and stragglers will be boxed out in 2013.

The software-defined networking (SDN) discussion is undoubtedly heating up, but so far it's centered largely on solving problems using SDN in the enterprise. Carriers and service providers, on the other hand, are gradually getting into the SDN conversation and sparking the dialogue on how SDN concepts will benefit carrier networks -- a very different paradigm considering that for carriers and telecom providers, the network itself is the "product." Several startups, such as Cyan, are developing SDN systems specifically for the carrier market.

Doug Gourlay, vice president of marketing, service provider and federal sales at Arista Networks, said in December that the programmability aspect of SDN is especially advantageous for carrier market sales. "If my provider asks for a new [network] feature and we build that feature for them, they have it and it's only a matter of time before other competitors build it and have it," Gourlay said. "But if a carrier such as Verizon can develop a new feature in a programmable network rather than buy it, it's a lot harder for competitors to duplicate it."

Service providers will embrace mobile broadband more and more as a key source of revenue, especially as bread-and-butter services, such as voice and messaging, continue to diminish as cash cows. Researcher Yankee Group predicts that U.S.-based operators stand to lose $1 billion per month in voice and messaging revenue.

Meanwhile, researchers like Ovum see mobile broadband growth as the top source of operator revenue well into the next three years. In a January research note, Ovum wrote that "mobile broadband presents the single largest opportunity for telcos to claw back revenue, as forecasts show mobile broadband growing 19.2 percent annually and generating $122.9 billion in incremental revenue between 2013 and 2016."

Ovum also sees public cloud, enterprise Ethernet, IPTV and managed/hosted IP voice as double-digit revenue growers over that same period.

Mobile operators are under serious pressure from so-called over-the-top (OTT) and free connectivity services offered by competitors that even a few years ago weren't part of the conversation. OTT's reach is now vast; Netflix, for example, is a well-known example as a provider of OTT content that threatens the pay TV industry.

"The mobile industry is undeniably shifting from voice to data, and over-the-top voice revenue is shifting away from mobile operators," Stephane Teral, Infonetics Research's principal analyst for mobile infrastructure and carrier economics, wrote in December. "SMS use is fading in places like Japan, the U.S., the Netherlands and the U.K. in favor of free applications over mobile broadband that enable internet browsing, e-mail and more importantly, video. Those services may be free to subscribers, but handling the traffic is not free to the network operators."

What's more, according to Juniper Research in December, by 2017, there will be over 1 billion OTT mobile VoIP services users.

In recent years, the spotlight in the telecom channel has shifted toward the convergence of IT VARs and telecom agents, and how major suppliers, from cable companies like Comcast to tier-one telcos and regional business connectivity specialists, are trying to engage with solution providers they've traditionally spurned -- or been spurned by.

VARs say one of the biggest hindrances to that convergence is the lack of carrier, service provider and cable programs that have their best interests in mind. With more channel chiefs at those major players finally getting the message -- and a number of retooled programs in the works, according to what sources tell CRN -- those VARs may have a more positive outlook come 2014.

With IT distributors and master agents both looking to prove their value in the cloud era, each is starting to look more like the other: managing telco and carrier relationships, enabling the VARs and agents they work with, and acting as the all-knowing go-between for channel partners and suppliers that have a hard time getting along. Some observers expect the master agent and distribution worlds to not only align but blend, with more than one distributor said to be sniffing around more than one master agent with eyes on deep partnership -- or even acquisition.

Both types of channel company have to deal with a third model, the cloud services brokerage, which is already emerging as a sort of "two-tier distributor" for cloud services. Many distributors seem to view the CSB model as something to embrace, however; initiatives like Ingram Micro's Cloud Services have taken up that distribution mantle while also looking to serve other CSBs and CSPs.

As the bring-your-own-device (BYOD) and mobile device management (MDM) trends grow -- Gartner holds that by 2013, mobile phones will overtake PCs as the most common Web access device worldwide -- the number of management providers may, in fact, shrink. There were a number of acquisitions in the MDM space in 2012 -- Citrix's pickup of Zenprise, for example -- and there's little reason to think more and bigger networking, telecom and infrastructure players won't want a consolidated approach to MDM best achieved through M&A.

Meanwhile, consolidation among telecom expense management (TEM) providers is also underway; Tangoe was an example of a major provider that bought several other providers in the last 18 months.

The great contraction in the service provider market -- CLECs, cloud providers, VARs with telecom practices, you name it -- continued throughout 2012 and will be even more prevalent in 2013.

What we can expect to see is more of the following: hosted VoIP specialists being absorbed by bigger UC companies (ShoreTel buying M5 was a prime example), service providers and cloud infrastructure providers reaching into the traditional IT and MSP channel for services expertise and regional customer footprints (TDS buying Vital Support Systems was a prime example), CLECs buying each other (Birch buying Covista's assets was a prime example), emerging players keeping their M&A momentum steady (Zayo Group's telecom land grab is a prime example), and big players making headlines in bids to stay relevant (T-Mobile's planned Metro PCS merger and Softbank's Sprint investments are prime examples).

Machine-to-machine (M2M) communications have been a buzzed-about growth market for years now, but heading in 2013, there are more signs than ever that M2M is a market carriers, telecom providers and channel partners can't ignore.

According to Machina Research, the number of M2M connections worldwide is expected to hit 18 billion in 2022 -- astronomical growth from the estimated 2.4 billion tracked at the end of 2012. Consumer electronics and "intelligent building sectors" will account for about 70 percent of those connections, and 90 percent of the revenue potential -- some $400 billion, Machina projects -- will come from the services wrap-around, not the provision of basic mobile connectivity. Good news for specialists in areas like SaaS, it seems.

Major carriers and service providers are also making more investments in M2M. Verizon, for example, bought Hughes Telematics in June for $612 million -- a bargain if M2M tech grows the way it's expected to.

For some time now the industry's curiosity toward Google Fiber -- an internet service from Google said to offer connection speeds 100 times faster (about 1000 Mbps) than what "most Americans get today," as Google's so fond of saying -- has been approaching pique, and in 2013, that curiosity may turn into paranoia.

Google's experimental broadband rollout in Kansas City is already showing good signs; various news outlets reported that 30 percent of possible subscribers in K.C. agreed to pay a $10 pre-registration fee for Google's IPTV service and that another 30 percent have expressed interest in using Google Fiber's Internet and video offerings. With Google starting to make more strategic hires in this business -- it's been advertising in various media outlets and job boards for network operations center (NOC) managers specific to Google Fiber -- the days when carriers and service providers have to face Google as a legitimate competitor could be fast-approaching.