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Managed Services is big business for many telecommunications players. We recently took a look at what is going on in Europe (and more specifically the United Kingdom) on the managed services front, where multibillion dollar deals are currently in play.

Now, market research firm Infonetics Research is about to release a new report on Monday, November 19, 2012, titled “Service Provider Outsourcing to Vendors,” which will focus on market size, market share and forecasts, and which tracks the revenue vendors derive from the services they provide to their carrier customers.

As the headline notes, the overall market will expand enormously over the next four years. It is anticipated to hit at least $76 billion, and that may very well prove to be a conservative estimate.

Infonetics’ service provider outsourcing reports provide worldwide and regional market size, market share, forecasts, analysis and trends for service provider fixed-line and mobile network outsourcing to vendors. The reports track the revenue that vendors derive from performing network planning and design, building, maintenance, operations, application service delivery, service provisioning and activation, and billing services for network operators.

Companies tracked include Alcatel-Lucent, Ciena, Cisco, Ericsson, Fujitsu, Hitachi, HP, Huawei, IBM, Juniper Networks, Microsoft (News - Alert), Motorola, NEC, Nokia Siemens Networks, Tellabs, UTStarcom, ZTE and others.

Key highlights from the upcoming report include:

• The service provider outsourcing market is on track to reach close to $65 billion worldwide by the end of 2012 – an 11-percent increase over 2011.
• By 2016, carrier outsourcing is expected to become a $76-billion global market.
• Opex reduction continues to be the chief driver for carriers, with outsourcing to vendors involving network tasks such as designing, building, maintaining, and billing among much else).
• Managed service revenue (which is defined for the report as the sum of operations, network maintenance, planning and design) is forecast by Infonetics to outpace the overall outsourcing market, growing at a healthy 8 percent CAGR through 2016.
• A combination of large deals in Africa, such as Zain (News - Alert)/Ericsson, and a collection of medium-sized deals involving RAN-sharing activity across Western Europe, currently makes EMEA (Europe, Middle East, Africa) the largest market for outsourced services. Refer to our earlier reference above for what is going on in the U.K. for additional details.
• Traditional telecom vendors Alcatel-Lucent, Ericsson, Huawei (News - Alert), and Nokia Siemens Networks now manage about one third of the world’s subscriber base – up 29 percent in just the last 6 months.

Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research (News - Alert), points out that “We anticipated that service providers across the board would continue to outsource at an unabated pace, but revenue in the 1st half of 2012 is already 2 percent higher than expected, with all OEM vendors reporting healthy growth in outsourcing, professional, and managed services. This gives us pause to ask what would happen to some of these vendors if they didn’t have a presence in services.”

In any case, it is certainly a good thing that they do. As the Infonetics report and our earlier article both point out, managed services is now a big time industry that will only get larger over the next few years.

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