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2014/05/19 Full-scale outsourcing by telecom carriers pushes managed services market to new heights

Campbell, CALIFORNIA, May 16, 2014—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.

The report tracks both the overall network outsourcing market as well as the fast-growing managed services segment within it, also referred to as ‘full-service outsourcing,’ where an equipment vendor takes over an operator’s entire infrastructure on an end-to-end basis over an extended period, including network maintenance, operations, planning and design tasks.


ANALYST NOTE

“At this point, it’s hard to find new large outsourcing deals unless China comes on board, which may eventually happen due to the ongoing discussion about 4G network sharing,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.


Téral continues, “As a result, last year was marked by musical chairs: Huawei and ZTE picked up some deals, while Alcatel-Lucent and Nokia exited some unprofitable contracts. But overall, demand for managed services with a strong focus on user experience remains unabated.”


CARRIER OUTSOURCING HIGHLIGHTS
  • In 2013, network equipment manufacturers outsourced by service providers to perform network services earned $68.1 billion worldwide, up 3.8% from the year prior
  • Ericsson held tight as the service provider outsourcing revenue leader in 2013, while HP leapfrogged IBM to take the #2 spot
  • #4 Huawei continued its ascent, gaining 2.4 percentage points and chalking up the strongest year-over-year revenue growth of any vendor
  • Growth in the overall market moderated in 2013 due to a combination of forex for Alcatel-Lucent, Ericsson, and Nokia, and major contract restructuring at Alcatel-Lucent and Nokia
  • The managed services portion of the outsourcing market, which includes network maintenance, operations, planning and design, grew 6% in 2013 to over $36 billion and is forecast by Infonetics to top $45 billion by 2018

Source: Infonetics Research

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