Skip to main content

Telecom Sector Challenges and Opportunities in 2013

The legacy telecommunications sector was challenged continuously by upstarts during last year, as these savvy over-the-top companies targeted the incumbent's customers with attractive offers. That being said, 2013 will be equally challenging.

Global telecom service provider revenues exceeded $2 trillion in 2012, with 60 percent of that amount going to mobile network operators, according to the latest market study by Ovum.

No doubt, more competitors will seek to tap that huge market in 2013.

While overall revenue growth is expected to be minimal, Ovum believes some segments will still have above-average growth, and significant incremental revenues over the next five years at each level of the value chain.

Ovum's global analysts have revealed that mobile broadband presents the single largest opportunity for legacy service providers to win back revenue. Their forecasts show mobile broadband growing 19.2 percent annually and generating $122.9 billion in incremental revenue between 2013 and 2016.

Other segments with double-digit revenue growth over the next five years include public cloud, enterprise Ethernet, IPTV, and managed or hosted IP voice.

"The recovery from the 2009 recession has been weak, and the ongoing global fiscal crisis continues to present a risk to the telecom industry," said John Lively, chief forecaster at Ovum.

Over the next 3–4 years, both fixed and mobile network operators will face the same fundamental challenge -- to increase new sources of revenue fast enough to offset the decline in mature legacy services.

In the consumer segment this will involve competing with new over-the-top players as well as traditional competitors. To meet this challenge, Ovum recommends adopting consumer-services marketing approaches.

For infrastructure vendors, increases in overall capital expenditures will be limited by low single-digit gains in service provider revenues.

To grow revenues faster than the industry average, Ovum recommends that vendors position themselves in one or more high-potential product segments -- such as converged packet optical, ROADMs, 40G/100G networking gear, carrier Wi-Fi, and network-related services.

Ovum also warns telecom component makers to expect continued high volatility in market demand -- higher highs and lower lows than their customers or end customers are experiencing.

"This can be mitigated to some degree by forming close relationships with infrastructure vendors and jointly understanding the end customer needs and plans," suggests Lively. "Plus, winning a share of 40G and 100G business will be essential to avoid being left behind by competitors."

Popular posts from this blog

Global Digital Business and IT Consulting Outlook

Across the globe, CEOs and their leadership teams continue to seek information and guidance about planned Digital Transformation initiatives and the most effective enterprise organization change management practices. Worldwide IT and Business Services revenue will grow from $1.13 trillion in 2022 to $1.2 trillion in 2023 -- that's a 5.7 percent year-over-year growth, according to the latest market study by International Data Corporation (IDC). The mid-term to long-term outlook for the market has also increased -- the five-year CAGR is forecast at 5.2 percent, compared to the previous 4.9 percent. Digital Sevices & Consulting Market Development IDC has raised the growth projection despite a weak economic outlook, because of vendor performances across 2022, growth indicators from adjacent markets, increased government funding, and inflation impacts. The actual 2022 market growth was 6.7 percent (in constant currency), which was 87 basis points higher than forecast last year, alth

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year