Telco IT spend constrained by market forces

Shagun Bali/Ovum
24 Jul 2012

As market forces continue to drive substantial change in telecommunications, the industry’s IT spending will respond accordingly.

Faced with limited prospects for revenue growth, telecom operators are keeping capital expenditure budgets in check. They are also reducing costs by outsourcing certain operations to leverage vendors’ economies of scale and expertise.

The market is witnessing rapid change in the traditional telco operating model as customer experience management becomes a key battleground. Emerging technologies and models such as cloud computing, mobile broadband, and Big Data analytics are altering telcos’ investment priorities.

Understanding these spending trends will help telcos better formulate strategic decision making and help vendors define their go-to-market offerings and value propositions. Ovum’s Global Telecom IT Spending Forecast Through 2016 and the accompanying Global Telecom IT Spending Forecast Through 2016: Analysis provide insight into the projected levels of technology spending within various geographic, sub-sector, and solution-type markets. They provide short- and medium-term spending forecasts for IT investment.

Telecom IT spending to grow modestly to $56bn by 2016

The recession has shaken the global economic system to its foundation. Flattening economic growth worldwide, eurozone sovereign debt problems, and rising oil prices have created instability and dampened hopes for significant growth in most sectors.

One of the factors favoring telecom is that communications and the internet are now vital platforms that support entire industries and everyday life worldwide. Demand for telecom services is secure and rising, and it is a critical enabler for the financial and government sectors.

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