Traditional telecom vendors now manage almost one-third of the world's mobile subscriber base, up 29% in just the last six months. And that number is only going to climb in the future.
According to Infonetics Research, the global carrier outsourcing market will hit $65 billion this year, an 11% increase over 2011. The market is expected to grow 8% annually and reach $76 billion by 2016. The research firm says that the managed services market (covering operations, network maintenance, planning and design) is growing faster than the overall outsourcing market.
"We anticipated that service providers across the board will continue to outsource at an unabated pace," notes Stéphane Téral, principal analyst at Infonetics Research.
Opex reduction continues to be the chief driver for carriers outsourcing. But cost considerations are far from the only critical factor.
Jan Wiberg, Ericsson's head of engagement practice for managed services in South East Asia and Oceania, emphasizes that cost reduction is always an important aspect. "However, reducing time to market, improving the customer experience, and increasing their resource bandwidth and competency to manage complex technologies are real challenges that telcos have to manage," he says.
For these reasons, the trend for IT managed services is predicted to grow steadily over the next view years. Studies have shown that operators will choose managed services partners that can help them with transformation of legacy infrastructure while at the same time help them introduce new services in a rapid, cost-effective and operationally efficient manner.
An example of this is U Mobile
, a Malaysian mobile operator, which signed a five-year BSS transformation and managed services contract in June.
Ericsson was brought in to transform the telco's BSS architecture into a real-time convergent environment so it can offer full-fledged convergent support to subscribers and be in a better position to launch innovative services.
The move will allow U Mobile to focus its efforts on product development and at the same time have clearer visibility and more control over capital and operating expenses.