Managed Services, One of the Few Growth Areas for Network Equipment OEMs, Will Reach $6.4 Billion in 2009, Says ABI Research
NEW YORK-(Business Wire)-February 17, 2009 - Managed services for mobile networks returned about $19 billion revenue in 2008, ($5.8 billion for network services and $13.4 billion for IT-related services.) Europe led managed services adoption: Tier One operators there face stiff competition, so they have turned to managed services to improve their margins. According to a new study from ABI Research, that $19 billion figure represents only a small part of the potential addressable market.
“Telecom operators’ overheads are astronomical, especially in the United States,” says senior analyst Nadine Manjaro. “North America accounts for less than 10% of the world’s mobile subscribers, but has the world’s highest operating expense tally. Europe and Asia Pacific follow a distant second and third. There’s a huge opportunity for managed services companies to offer savings to these operators.”
In fast-emerging markets such as India, high subscriber growth drives managed services: operators leverage managed services to meet time-to-market demands. Ericsson currently leads worldwide in network-related managed services. Nokia Siemens and Alcatel-Lucent are also strong contenders. IBM leads in managed IT services for mobile operators.
Managed services used by European operators such as Orange in Switzerland and 3 in the UK, deliver annual savings averaging 30%. But in North America, operators such as Verizon Wireless have been reluctant to go down that road, because much of their marketing is based on “our huge, well-staffed network.” Verizon is currently doing well, and does not yet face these difficult decisions. But over time, says Manjaro, it too is likely to explore ways to operate more cost-effectively.
Sprint, on the other hand, recently announced that it will shift 5,000-10,000 employees to managed services.
Manjaro concludes, “In the past AT&T stated that it didn’t need to resort to managed services because it had enough staff of its own. Yet the company recently cut its headcount by 12,000. They are hesitant, but eventually all operators will have to face such choices.”
“Managed Services for Mobile Operators” (http://www.abiresearch.com/products/market_research/Managed_Services_for_Mobile_Wireless_Networks) addresses the global market for managed services and provides regional breakdowns of each market, including global data, market share data and regional managed services data.
It forms part of two ABI Research Services: The Mobile Consumer (http://www.abiresearch.com/products/service/The_Mobile_Consumer_Research_Service) and Mobile Networks (http://www.abiresearch.com/products/service/Wireless_Infrastructure_Research_Service).
ABI Research provides in-depth analysis and quantitative forecasting of emerging trends in global connectivity. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advise thousands of decision makers through research and advisory services in seven key practice areas. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.
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