Convergence, cost cutting and increased competition drive managed services and outsourcing markets

According to new research from Informa Telecoms & Media, mobile operator spending on managed services and outsourcing will reach $29 billion by 2014, driven by convergence of fixed and mobile networks, the world economic slowdown and increasingly competitive developed markets. Mobile operators are forced to concentrate on their core skill sets, assets and expertise in order to survive and are following the wider global trend toward outsourcing.

Paul Merry, Senior Analyst at Informa Telecoms & Media and lead analyst of the company's managed services research comments, "The ongoing development of mobile services combined with the development of convergent telecommunications will see an increase in opportunities for managed service providers. Specifically there will be immense prospects in delivering multiplatform mobile services and advising on developments in the telecommunications space."

Merry asserts that service provisioning support and consultancy are likely to be key areas of development moving forward, as new entrants are actively targeting the telecommunications space particularly within the MVNO environment. These factors will see service provisioning support growing by 127% by 2014 according to Informa's latest managed services forecasts. Merry cautions however that "the global economic situation is not the only driver for mobile managed services and one would be unwise to underestimate the other solid reasons for opting to outsource."

Broadly the opportunities managed services provide can be split between those benefiting developing regions and those benefiting developed regions. In developing regions outsourcing and managed services bring the expertise that may not be endemic within operators in these regions. In developed markets the level of competition is a key driver of outsourcing, with any competitive advantage being quickly leveraged to compete on ever shrinking margins. In addition, the pervading trend for software as a service (SaaS) which is part of a wider trend toward relinquishing control over certain IT, network and service assets to the edge of the business or outside of it entirely.

In regional terms the majority revenue is generated in Western Europe, and this trend is expected to continue with 33% of managed services revenue generated in this region by 2014. However there will be strong growth in developing markets including Africa, the Middle East and Latin America as these markets strive to mature as quickly as possible.

While North America has broadly caught up with Europe in terms of mobile use mobile managed services remain underpenetrated in the region partly due to the historical antipathy shown to outsourcing due to US protectionism. Professional service provisioning and BSS/OSS outsourcing including consultancy have been adopted in the region but managed network service contracts remain uncommon.

The Asia Pacific region exhibits a strong predilection toward managed services albeit in the more developed countries, delivering 24% of total mobile managed service revenues by 2014. A key reason for adoption in this region will be network expansion and upgrade to provide for expected mobile broadband take-up with managed capacity, network sharing and the ability to manage multi-vendor, multi-technology networks becoming highly attractive.

The opportunities that next generation networks and technologies create, demand new approaches and managed services provide one solution to the countless challenges facing existing and new entrant operators.

For more information on Informa's Managed Services report please visit: http://www.informatm.com/managed.

For more information, please contact:

Denise Duffy

PR Manager, Informa Telecoms & Media

Mob   +44 (0) 7500 330826 

Email: denise.duffy@informa.com

Twitter: @informatm_pr

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