Revenues from Managed Telecom Services and Outsourcing Show Slight Decline

By Laura Stotler

The market for managed telecom services is in a slight decline, largely due to foreign exchange and other losses among the top three equipment and services vendors. IHS Infonetics reports global revenue from telecom outsourcing and managed services declined 0.4 percent last year but still comprised a $66.6 billion market.

The Service Provider Outsourcing to Vendors report from Infonetics looks at outsourcing and managed services revenues provided to telecom carrier customers. The research counts network maintenance, planning and operations as the main components of managed services revenues, which totaled $36 billion in 2014. Network maintenance, building, planning and design made up more than half of service provider outsourcing revenue last year.

The EMEA region was the largest market for telecom outsourcing and managed services and is expected to stay in the lead through 2019, followed closely by the Asia Pacific region. The report cites forex as the main reason for the 2014 decline in revenues, along with unprofitable contract divestiture.

"The slow growth in telecom outsourcing is the result of a combination of forex for Alcatel-Lucent, Ericsson and Nokia Networks, and a second year of unprofitable contract divestiture at Alcatel-Lucent and Nokia Networks," said Stéphane Téral, research director for mobile infrastructure and carrier economics at HIS.

Téral added that Huawei was the only telecom vendor who enjoyed "Only Huawei posted double-digit growth at a time when both IBM's and HP's revenues declined and Ericsson's stayed flat."

Ericsson was the leader for outsourcing revenue for both 2013 and 2014, followed with HP, Huawei, IBM and Nokia rounding out the list of top vendors.

Edited by Dominick Sorrentino

MSPToday Contributing Editor

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