MSP Today Expert Feature
July 15, 2015

Managed Telecom Services Revenues Expected to Reach $297 Million by 2020

Research firm Ovum (News - Alert) has some good news regarding the MSP sector. The company forecasts revenues from managed telecom service providers to grow substantially over the next five years, reaching more than $297 billion by 2020. That marks a healthy 9.9 percent CAGR and good news for MSPs specializing in telecom and communications-related service offerings.

The revenue growth is only the beginning of the good news, though, and Ovum also predicts telecom-centric MSPs have the potential to control 18 percent of the total global ICT services market by 2020. They control 14 percent of that market as of this year.

Ovum examined more than 9,000 managed service contracts between telco MSPs and enterprise customers throughout the world and also found that Latin America represents the biggest growth region for telco strategic services. It is expected to grow 17.8 percent, with Africa following closely behind at 17.5 percent. The Middle East will grow 16.4 percent while Central Asia is expected to grow at a steady 13 percent.

"Telcos have relied on adapting traditional voice and data services to serve increasingly complex enterprise business users, but now have a powerful range of ICT services that have been integrated across the operators' global networks," said David Molony, principal analyst for Ovum's enterprise practice. "Telco revenues from strategic ICT services are growing faster and, according to our calculations, will overtake legacy service revenues in 2018."

Europe and North America currently represent the biggest regional markets for managed telco services and will remain on top in 2020, although they are expected to grow more slowly than other regions. Ovum also found that more telcos have the potential to offer enterprise managed services via dedicated business units and divisions. They are also expected to either partner or compete with systems integrators and IT service providers when it comes to offering managed solutions to the large enterprise sector.

Ovum also examined ICT solutions like unified communications services and found that they represent a new generation of dedicated IT and IP communications services. Telco MSPs are expected to offer these types of services as part of their existing contracts with enterprise customers.

Edited by Dominick Sorrentino