For most of the past two decades, the dominant B2B sales model in American telecom followed a simple logic: sell the connection, renew the contract, repeat. Pricing was stable, churn was manageable, and the network itself was the product. That model is breaking down. Customers are not walking away from their ISPs and telcos. They are asking for something fundamentally different. The transaction is giving way to the relationship, and the pipe is giving way to the platform.
The Procurement Shift Is Already Underway
The clearest signal of this transition is where SMB technology spending is going. SMBs account for roughly 44% of US GDP, close to half of all employment, and approximately half of the country’s $370 billion in overall technology spending. In segments like telecom and electronic devices, SMBs spend more than the large-enterprise accounts that providers have historically chased (McKinsey, 2023). That scale makes the directional change in their buying behaviour consequential for any operator with a significant business customer base.
The shift is moving away from discrete, transactional purchasing toward recurring, bundled relationships. 72% of US SMBs plan to increase managed IT spending, recognising that outsourcing provides access to enterprise-grade capabilities at predictable costs without requiring large internal IT teams, and SMBs are projected to channel more than $90 billion in new spending into managed IT services through 2026 (Deskday, 2026). What is changing is not simply that SMBs are spending more. It is how they want to spend it. B2B buyers no longer want to manage fragmented, one-off IT invoices. They expect consolidated billing, operational outcomes, and software services attached directly to their network subscriptions. Comcast Business recognised this early, moving into cloud-based business applications paired with internet subscriptions to capture broader enterprise IT wallet share and drive high-margin recurring software revenues. The same logic is playing out across the American telco and ISP landscape. Operators that have not yet structured their offer around it are watching the opportunity narrow.
Connectivity Alone Is No Longer the Anchor
For American telcos and ISPs, the strategic implication of this shift runs deeper than product mix. It touches the structural logic of the customer relationship itself. Nearly 60% of enterprise customers now prefer to procure core connectivity as part of an integrated solution that often includes cloud, security, or collaboration tools (McKinsey, 2025). What was once sold as a standalone service is increasingly being evaluated as one component within a broader stack. Customers want that stack sourced from as few vendors as possible.
Most B2B companies choose the ease and simplicity of a bundle from one provider over the absolute highest-quality products from multiple different vendors. Mobile connectivity draws the strongest preference for integration, with approximately two-thirds of enterprises preferring to purchase it alongside other technology or telecom products (McKinsey, 2024). This consolidation impulse creates a meaningful opening for operators. The company that already holds the connectivity relationship has a structural advantage in capturing adjacent spend. But it has to move before a competitor does.
The market is not waiting. 76% of mid-market companies in the United States prefer to purchase IT services from their existing ICT providers, and the mid-market segment was valued at approximately $245 billion in the US in 2024 and is projected to grow at a CAGR of 8% through 2028 (BCG, 2025). For operators already embedded in those accounts, this is not a speculative growth thesis. It is a defensible, near-term revenue opportunity sitting within the existing customer base.
IT Opportunity Is Growing Faster
The financial case for operators to move beyond connectivity-only relationships is increasingly difficult to ignore. The beyond-core B2B market spans cybersecurity, business applications, IT and managed services, cloud and infrastructure, and end-user devices. It grew from $142 billion in 2020 to $204 billion in 2024 and is projected to reach $287 billion by 2028, with a CAGR of 8.9% compared to just 1.6% for core and near-core combined (McKinsey, 2025). Connectivity is not shrinking. The value creation is shifting upward in the stack. Operators that remain anchored to connectivity-only models will see their share of wallet compress even as their customer relationships nominally persist.
Growth expectations for core connectivity among B2B customers sit at approximately 3.2%, while beyond-core spending on cybersecurity, cloud services, and business applications is expected to grow at around 6% (McKinsey, 2025). That differential compounds over time. An operator that captures a share of the beyond-core spend in its SMB accounts is not just adding revenue. It is materially changing the economics of those customer relationships. Stickiness, ARPU, and churn all move in the right direction when the bundle is deep enough that switching carries a real cost.
Customer stickiness with operators is strongest and improving fastest in business applications and end-user devices and services, where customers report a 7 to 9 percentage point increase in their likelihood to remain with telecom operators between 2024 and 2026. Cloud services and communications and collaboration, by contrast, show flat or declining stickiness (McKinsey, 2026). Operators that have expanded into business applications are building durable retention. Those relying on connectivity contracts alone face a steadily weakening grip. Modern MSPs are already acting on this logic, phasing out circuit-only transactional selling and replacing it with comprehensive bundles where security policies, network health monitoring, cloud configurations, and carrier line management are combined into unified monthly recurring billing structures. The question for American telcos and ISPs is whether they lead that shift within their SMB accounts or cede it to partners who will.
The Competitive Window Is Narrowing
Not all operators will benefit equally from the SMB shift to subscriptions. The threat is concrete. Hyperscalers including AWS, Microsoft Azure, and Google Cloud are formidable competitors for the ultimate B2B technology transaction layer. They are starting to bundle internet connectivity with their cloud offerings. For American ISPs that have not yet assembled a beyond-core offer, the risk is disintermediation. Not from a telco competitor, but from a cloud provider that approaches the SMB from the application layer and pulls connectivity spend along with it. Operators that fail to evolve risk becoming a hidden connectivity layer underneath someone else’s marketplace, present in the infrastructure but absent from the commercial relationship.
Security is the most sought-after feature in a bundle and the top criterion for vendor selection, and mobile connectivity serves as a strong anchor product for building out additional beyond-core offerings (McKinsey, 2025). This creates a practical sequencing for operators. Connectivity is the entry point. Security is the bundle driver. The suite of cloud and managed services expands the wallet share from there. Operators that move from a transactional model to a curated subscription portfolio are the ones positioned to claim the margin this shift is creating.
55% of B2B decision-makers say that being a true integration partner, not simply a reseller, is an important part of the value proposition they expect from operators (McKinsey, 2025). Operators that position themselves as the single point of coordination for an SMB’s technology stack are building the kind of embedded, multi-year loyalty that transactional connectivity contracts have never produced. That means managing provisioning, billing, support, and service evolution within one relationship.
What Operators Need to Do Now
The transition from one-off purchase to bundled subscription is not a future state. For American telcos and ISPs, it is a current competitive reality that is already determining which operators grow their SMB revenue and which watch it erode. Operators that move beyond connectivity to offer integrated, subscription-based stacks spanning managed security, cloud services, collaboration tools, and ongoing support are building customer relationships that resist both churn and margin compression.
The SMB segment is particularly well-positioned to drive this transition. SMEs display approximately 35% lower intent to switch away from telecom operators than larger enterprises (McKinsey, 2024). The customer base is loyal enough to be converted. It simply needs a compelling reason to deepen the relationship rather than fragment its spend across a growing number of point vendors. Operators that move first to offer a genuine subscription commerce experience structured around business outcomes rather than circuit uptime will not just capture incremental revenue. They will restructure the economics of their most important customer segment before the window closes.
Alep Digital works with operators including Bell Canada and T-Mobile USA to build and run the subscription commerce infrastructure that converts connectivity-only accounts into full-stack digital service relationships, without operators needing to build internal cloud and marketplace teams from the ground up.