Lightyear Named in Gartner's 2026 TEM Market Guide — Our Current TEM Market Observations

Lightyear was recently recognized in the 2026 Gartner Market Guide for Telecom Expense Management Services. An exciting moment for us given we launched our Expense Management offering just a few months ago! The full Market Guide is available in Gartner’s Research section; access requires a Gartner client account. 

We'll let that report speak for itself. What we want to do is focus on what’s actually happening in the TEM space right now. Lightyear works with enterprise networks and IT teams every day,  across hundreds of thousands of RFPs and industries. This gives a ground-level view of where the market is heading. In this article, we’ll spotlight the trends we're seeing independently and what they mean for your organization. 

Scale Isn't the Same as Sophistication in TEM 

The TEM market is estimated at nearly $6 billion and continuing to grow. We break down some of the top players in our blog: 8 best telecom expense management solutions in 2026.  

But market size isn't the story. When you look at the vendors managing the largest volumes of spend — billions under management, decades of customer contracts — what you're often looking at is scale built on top of years in market, not platform sophistication. In fact, many of the largest players in TEM are running the same core infrastructure they launched with in the early 2000s, with AI and automation features layered on top on of a faulty system.

The problem with this model is that the enterprise networks run today look nothing like the ones those platforms were designed for. Neither does the data. When TEM first emerged as a category, voice services were a much larger part of the enterprise expense story than they are today and the key source of complexity. The question worth asking when evaluating any TEM vendor isn't simply how much telecom spend they manage, but whether the architecture was built for the complexity of enterprise telecom today.

Lightyear’s Expense Management platform was built on the question of what it takes to build a full telecom operating system from the ground up in today’s environment. The answer required connecting inventory, procurement, and billing at the service level — not patching them together after the fact. 

AI in TEM is only as good as the data underneath it

Every TEM vendor has AI in their pitch right now. That isn’t news. The more important question is what AI is actually trained on and connected to.

Layering AI on top of legacy TEM infrastructure doesn't solve the underlying data problem; in fact, it can amplify it. Invoice lines that aren't mapped to validated inventory, charges not reconciled at the service level, and cost allocation done after the fact quickly become architecture problems. The TEM platforms generating real automation outcomes are the ones where inventory, procurement, and billing share a closed data loop. Without that foundation, natural language query tools and agentic workflows are impressive demos that don't survive contact with a real enterprise network. Most TEMs are just working off of invoices, not a holistic inventory that consistently updates.

The same logic applies to how AI surfaces insights. The best platforms don't wait to be asked — they flag anomalies, surface optimization opportunities, and catch billing errors before they become disputes. That's the difference between AI as a feature and AI as a function. 

AI has also introduced a new dimension to data governance. As AI integration accelerates, we’re seeing enterprises ask hard questions about where invoice and contract data is going, whether vendors are using shared models or private, isolated environments, and what certifications (SOC 2, ISO 27001, FedRAMP) are in place. However, if your organization is not in a highly regulated industry, you may not need to be as concerned with compliance certs. Instead, your organization should ask: Is my data being used to train a shared model, or does it stay in a closed environment? That question matters more than any AI feature on a vendor's spec sheet. 

The pricing environment isn’t uniform, and not all TEMs keep up 

Telecom pricing has historically moved in one direction: down. And for most connectivity categories, that's still true. According to Lightyear's 2026 State of Connectivity Report, DIA pricing at 100 Mbps and 1 Gbps continued to compress roughly 5–10% year over year, consistent with the historical trend. Broadband got cheaper still, with competitive metro options now frequently available under $100/month.

But the story isn't uniform. Data center and colocation pricing tell a completely different story. Retail colo costs jumped 20%+ from H1 to H2 2025 alone, with rack rates up 20–30% year over year in primary markets. AI hyperscalers pre-leasing entire facilities years in advance have effectively crowded out enterprise tenants, driving vacancy rates below 2% in major hubs. Enterprises renewing colo contracts in 2026 are facing a fundamentally different negotiating environment than they were two years ago.

The practical implication: enterprises can't apply a single assumption to their telecom renewal strategy. Connectivity pricing still rewards proactive benchmarking and competitive bidding. Without current market pricing data as a benchmark, most enterprises don't know how wide that gap is. For a closer look at how to identify and recover telecom spend, our guide to telecom expense audits is a good starting point.

Vendor consolidation is creating risk that isn't showing up on most procurement checklists

The TEM market, like much of the telecom space, has also seen significant M&A activity in the past 18 months. Several established vendors have merged, changed ownership, or been absorbed into broader technology platforms. To name a few recent examples:

• Tellennium joined the NetSpark IP & Telecom family of companies in December 2024

• Proven Optics acquired brightfin in January 2026

• AppDirect acquired vCom in December 2025

• Cass Information Systems sold its TEM business entirely to Asignet in early 2025 — exiting the category altogether

That's four meaningful ownership changes in roughly 12 months, across vendors that collectively serve thousands of enterprise customers.

The deals make strategic sense for acquirers. The risk lies with the enterprise customer. When a TEM vendor changes hands, what's typically lost first is institutional knowledge, the team that understood your carrier relationships, your contract structure, your billing edge cases. Product roadmaps get reprioritized around the acquirer's broader platform strategy, which may or may not keep enterprise telecom at its center. Data governance gets more complicated as systems integrate. And for enterprises mid-contract, the protections in their MSA become the only real leverage they have. Ownership changes aren't the only service risk; quality degradation over the life of an engagement is a documented pattern even in stable vendor relationships, and worth factoring into any evaluation. 

This isn't an argument against any specific deal. It's a prompt to ask harder questions when looking at a TEM partner: What does the ownership structure look like? What happens to service commitments if ownership changes? What exit clauses exist in the MSA, and are they specific enough to be enforceable? In a consolidating market, these questions belong on the checklist alongside feature comparisons and pricing. 

TEM is getting more serious attention from enterprise leadership than it has in years. The enterprises that manage it well have a real cost and operational advantage over those that don't — and finding the right platform is a meaningful part of that. 

If you want to see how Lightyear approaches the full telecom lifecycle from procurement through expense management, schedule a demo of Lightyear's Expense Management platform to see it in action, or start with the reports to keep an eye on where the market is headed.

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