Lower Capex (Capital spending) among major telecom operators is a concern for mobile equipment vendors such as Alcatel-Lucent, Ericsson, Huawei, NSN, ZTE, Cisco, Samsung, etc. Ovum in a recent report highlighted 5 major trends to watch out in the $160 billion telecom network infrastructure market.
Recently, Infonetics Research said BRIC nations — India, China, Brazil and Russia – will drive telecom service provider Capex (capital spending) to increase 6 percent in 2013.
These trends are significant as telecom service providers are seeking a better balance between cost and revenue: small cell adoption; data and customer experience management; the move to software-centric networks; increased optical network capacity in the metro; and changes in the infrastructure value chain. Vendors that stay in front of these trends should beat average market growth projections. ( China Mobile, China Telecom drag H1 infrastructure Capex )
Earlier, Infonetics predicted that telecom SP revenue will touch $2 trillion this year.
Ovum says there will be low single-digit revenue growth for communications service providers through 2018. The growth of over-the-top players, changes in subscriber behaviours, and regulatory policies are all negatively impacting CSPs’ service revenues. This will limit Capex growth and restrain revenue growth for network infrastructure vendors. Investments in higher-growth revenue opportunities, for example Big Data-related infrastructure and services, LTE, 100G, and the like, will allow vendors to outpace the general market.
Ovum says the big boom in small cells deployments won’t happen in 2014, but indications are clear that interest in small cells is growing. For 2014, small cell solutions for indoor spaces will be hot.
Video analytics and optimization in particular will prove crucial. Improved customer experience and network asset management will increasingly require sophisticated, real time policy-controlled traffic management and data analytics, especially for mobile networks.
Telecoms will gain confidence to expand software-defined networking (SDN), network virtualization, and network functions virtualization (NFV) trials and early deployments. In 2014, new and revised standards and specifications related to software-defined networking (SDN), network virtualization, and network functions virtualization (NFV) will bring the industry closer to consensus.
Lower-cost coherent optical metro solutions will hit the market in 2014. Network value will increasingly be driven by software-tunable capabilities, allowing new possibilities for transport network optimization and monetization.
In 2014, the equipment value chain will continue shifting to benefit application software and chips. For NEPs, the response is vertical integration to include more chip design. For merchant chip suppliers and innovative NEPs, over-the-top (OTT) operators tantalize with a shortened technology adoption cycle.
