Many of today’s top telcos are themselves managed services providers (MSPs). If you have the network already, why not sell services that run on top of it?
But many of these same telcos are also managed services customers, in many cases availing themselves of managed communications providers’ services.
In a new report distributed by Market Research Reports, Inc., this market isn’t quite booming, but isn’t too shabby either. The research itself was published by Mind Commerce Publishing.
“Carriers' desire to cut Operating Expenses (OpEX) and CapEx has driven growth in the telecom outsourcing market by 4 percent CAGR and is expected to reach $76 billion by 2016. The top players such as Alcatel-Lucent, Ericsson, Huawei and Nokia Siemens Networks dominate the market and remain committed to provide managed services,” the report said.
Apparently this movement for telcos to outsource some of their infrastructure all started some 10 years ago, and has been picking up as of late. “This trend, to outsource infrastructure as well as certain operational support to third party managed communications providers, is reaching a next stage in evolution. Historically, telecom operators have looked to service bureau providers for intermediation services, database services, and various OSS/BSS support,” the report argued.
One driver is lower cost: “The more recent trend has been to outsource infrastructure as a service as a means of reducing Capital Expenditure (CapEx) and to use as negotiation leverage for improved pricing on next generation networks such as IP Multimedia Subsystem (IMS) and LTE infrastructure such as Voice over LTE (VoLTE).”
This, as rich as it seems, is only the beginning. The new wave is all about telcos using services to drive their next generation communications offerings, as well as supporting commerce and delivering content.
“This is a key development as network operators are poised to lose revenue and margins both due to marginalization of bearer services (voice and data both) and the need for value-added service (VAS) applications,” the researchers said.
Market Slowing?
ABI Research has a somewhat different take. It believes while the market is growing, that growth is slowing considerably. Over the next five years average growth with be around 7 percent, far less than the double-digit growth we had been experiencing.
Souring the market a bit are lower capital expense budgets for telcos and the fact that these managed services for telcos aren’t always what they are cracked up to be.
Edited by
Alisen Downey
