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Telecom Vendor Outsourcing Flat in the First Half of 2013

By Rory Lidstone November 07, 2013

With widespread use of mobile devices — especially rich media-capable devices like smartphones and tablets — has changed the way network operators operate. For example, software defined networking (SDN) and network functions virtualization (NFV) are being heavily implemented to help service providers revive their networks and revenue. Toward that same end, many service providers have turn to outsourcing to vendors.

However, according to a new report from market research firm Infonetics Research, vendor outsourcing may be on the way out. This is because global service provider outsourcing revenue was down 1.4 percent in the first half of the year as compared to the same period in 2012.

“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,” said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Despite this, Infonetics Research remains confident that the carrier outsourcing market will recover, thanks to an increase in mobile network outsourcing deals. This should lead to market revenue hitting $79 billion by 2017 with an eight percent compound annual growth rate.

Overall, in the first half of 2013 Asia Pacific came in second in the outsourcing and managed services market, in spite of China’s limited outsourcing activity, following EMEA’s (Europe, the Middle East and Africa) lead. This is largely due to “super deals” in India by Bharti, Idea, Aircel, Hutchison (Vodafone) Essar, and Reliance Infocomm.

As it stands, telecom equipment vendors are now managing almost half (45 percent) of the world’s subscriber base, a substantial increase over 33 percent six months ago.




Edited by Cassandra Tucker

Contributing Writer

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