Massive deployment of high-speed wireless networks throughout the world has opened up a new market for telecom outsourcing and managed services for several telecom equipment manufacturing firms. The next-generation (3G/4G) wireless networks are aiming to cope with substantial demand for high-speed wireless data services and mobile video.
Telecom service providers are now typically looking at providing the converged IP-based network, offering bundled solutions for triple play voice, video and data. This requires the implementation of complex network architecture.
The telecom outsourcing market generally includes network implementation & maintenance, system integration & managed services, and consulting. In order to minimize their costs, carriers try to concentrate on developing new services, implement a service-oriented business model and marketing.
The market for basic network operation is increasingly seeing the entry of infrastructure suppliers. This generates a huge opportunity for telecom equipment manufacturers to encash.
According to various industry researches, the approximate global size of this market is likely to be between $250 billion - $275 billion. Asia alone is expected to generate 25% of the total.
As of now, the undisputed leader in the telecom managed services market is LM Ericsson AB (ERIC). Nokia-Siemens Network; a joint venture between Nokia Corp (NOK) & Siemens AG (SI), and Alcatel-Lucent (ALU) are the two closest rivals.
During the first half of 2009, these three entities won 20 large managed services deals across the world. Currently, Ericsson generates approximately $2.8 billion of quarterly revenue through managed services, whereas Nokia-Siemens Network generates around $2 billion and Alcatel-Lucent generates around $1.25 billion of quarterly revenue.
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