2013/11/05 Telecom equipment vendors manage 45% of the world’s subscribers as outsourcing grows

Campbell, CALIFORNIA, November 4, 2013—Market research firm Infonetics Research released excerpts from its latest Service Provider Outsourcing to Vendors report, which tracks the revenue vendors derive from the services they provide to their carrier customers.

“Though we looked for service providers across the board to continue outsourcing at an unabated pace, global telecom outsourcing revenue in the first half of 2013 is basically flat from the same time last year, a result of a combination of factors including forex for Ericsson, year-over-year revenue declines at IBM and HP, NSN for various reasons, and growth at Alcatel-Lucent and Huawei,” reports Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Continues Téral: “Still, we’re remaining bullish on the carrier outsourcing market, anticipating an increase in mobile network outsourcing deals that will drive revenue to $79 billion by 2017 as mobile operators try to keep opex under control.”

• In the first half of 2013 (1H13), global service provider outsourcing revenue is down 1.4% from a year ago (1H12)
• Despite China’s limited outsourcing activity, Asia Pacific is the #2 outsourcing and managed services market in the world (behind EMEA) thanks to super deals in India involving Bharti, Idea, Aircel, Hutchison (Vodafone) Essar, and Reliance Infocomm
• Telecom equipment vendors are now managing 45% of the world’s subscriber base, up from 33% just 6 months ago
• Operations outsourcing is projected to grow at an 8% compound annual growth rate (CAGR) from 2012 to 2017, the highest of any service type
• Many major deals have been inked since the beginning of the year, including Reliance Communications’ 8-year, $2 billion managed services contract with Alcatel-Lucent and Ericsson, Tele2 Netherlands’ agreement with NSN to build an LTE network, du’s 5-year managed services deal with Huawei, and T-Mobile Poland’s 3-year contract with NSN for billing system development and maintenance