Tuesday, January 4, 2011

Infonetics Research - Telecom outsourcing thriving; Ericsson, NSN, ALU, Huawei: soon running 3/4 of world’s networks?

By the end of 2010, telecom service providers worldwide will have outsourced about $53.5 billion worth of networking tasks to equipment vendors, eight percent more than they outsourced in 2009, according to Stéphane Téral, Infonetics Research
principal analyst.

The trend is more prevalent among mobile networks than fixed networks. In 2008 revenue from mobile and fixed network outsourcing was roughly the same; by 2014, mobile network outsourcing will grow to account for 61 percent of all network outsourcing, says Téral.

The major growth areas for telecom network outsourcing include network maintenance, planning, design, and operations
Much of the growth in outsourced services is coming from EMEA (Europe, Middle East, Africa) and Asia Pacific, and to a lesser extent, Central and Latin America, with the Oi-Nokia Siemens deal in Brazil and activity increasing in Mexico.

One might argue that mobile network outsourcing is an easier proposition because the labor intensity of a mobile access network is vastly less complicated than a fixed network, and corresponding ability to create service quality differentiation are correspondingly reduced in a mobile setting. Some video entertainment providers have in the past outsourced installation chores to contractors, with mixed results. For brand management, many firms now believe they have to control their own installation and repair staffs, rolling stock and so forth.

Mobile operators do not have the premises wiring, premises equipment and cable, wire and active element issues that fixed network providers do, making outsourcing of access network duties an easier proposition.

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