& cplSiteName &

NSN Sees Managed Services as $277B Market

Catherine Haslam
News Analysis
Catherine Haslam
6/18/2009
50%
50%

SINGAPORE -- CommunicAsia 2009 -- Nokia Networks estimates that the potential captive market for telecom outsourcing and managed services is worth €200 billion ($277 billion) a year -- that's around double the value the company puts on the sale of fixed and mobile equipment. Of this, at least 25 percent will come from Asia, NSN suggests.

Speaking at a press briefing held alongside CommunicAsia, Christian Fredrikson, NSN's head of Asia Pacific, explained that NSN values the managed services and outsourcing market based on the amount that communication service providers currently spend internally on the operation of their networks and services. NSN's definition of the market therefore includes network implementation and ongoing care, managed services, and consulting and integration.

The figure does not directly correlate to the revenues available to the vendor community, as Fredrikson concedes that some operators will always want to manage all or at least some of their own networks and service operations. However, he says, the trend toward outsourcing some or all network management is now unstoppable as many operators concentrate their efforts on developing new services, service-orientated business models, and marketing.

Nowhere is that more obvious than in Asia. Managed services are now the norm in India, and with the outsourcing of the operation and management of its value-added services (VAS) infrastructure, Bharti Airtel Ltd. (Mumbai: BHARTIARTL) has taken this to a new level. (See India's Airtel Outsources Again.)

In addition, markets in which operators have been staunchly self-sufficient, such as Japan where NSN partners with Panasonic to offer managed services, are coming around to the idea, says Fredrikson.

Kamlesh Patel, head of strategy and business development, Asia Pacific, NSN, tells Light Reading that it is a trend that is growing at unprecedented rates in many parts of Asia-Pacific and is being driven by operators in low ARPU markets that need lower and more predictable costs, together with the reliability of service. Patel explains that the market share NSN allocates to Asia-Pacific is extrapolated from the proportion of the infrastructure market the region accounts for. But, he says, with the near exponential growth of managed services in Asia, it could take a significantly higher proportion of the business.

Forty percent of NSN's revenue already comes from services. This has risen 10 to 15 percent from five years ago and is helping offset declining revenues from the equipment business which Fredrikson describes as commoditized.

He says infrastructure is still a big business at €100 billion annually, but it is no longer a huge growth business. Indeed, NSN estimates the global infrastructure market will contract by 9 percent in 2009. This is lower than it was predicting at the end of 2008. (See Nokia Siemens Braced for Tough 2009.)

NSN has more than 200 managed service contracts on five continents. It is monitoring more than 125,000 base stations, and it brings a new base station on air every 10 minutes. Together these account for enough connections to put NSN at No. 6 on the operator rankings list by subscriber. However, Fredrikson insists NSN is not about to start competing with its customers.

He says, "We are not going to be an operator and go for licenses and spectrum. We will stick to what we are good at."

NSN manages these networks from its global network solution centers, two of which are in Chennai and Noida in India, with the third in Lisbon, Portugal.

It is experience from these that is driving NSN's strategy toward what it describes as extreme network efficiency. Operational realities are informing product development to create lower-power, lower-cost equipment.

It is also influencing changes in NSN's management processes and OSS products so that they become more automated, deliver real-time information, and enable proactive monitoring that is capable of giving a view on the customer experience for a service, not just the performance of network elements.

NSN says that its target is to be No. 1 in the provision of telecoms services and claims to already be No. 1 in network implementation, No. 2 in network care and managed services, and No. 3 in consulting services.

NSN's heightened emphasis on services can come as no surprise considering the pressure on the infrastructure business in general and the unabated growth of Huawei Technologies Co. Ltd. , which is fast closing in on NSN's fourth place in the telecom equipment vendor rankings. (See Huawei Closes In on Rivals.)

Indeed, Huawei tells Light Reading that it has shipped more 3G-mobile base stations in the first quarter of 2009 than it did in the entirety of 2008, suggesting that in mobile infrastructure at least, the pressure is only increasing on NSN.

— Catherine Haslam, Asia Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
mobileinsider
50%
50%
mobileinsider,
User Rank: Light Beer
12/5/2012 | 4:02:11 PM
re: NSN Sees Managed Services as $277B Market


I am convinced than ever before that the landscape for network services is changing forever. Network providers (will) hold the key and mobile operators become “marketing brands” to the consumers.


SN, Ericsson and ALU (and now with support from HP Global Services) will manage majority of network assets which change everything for box and software vendors alike. Who do you sell to when the network is managed by someone else? Is the operator in charge or is it the SI or the company who manage the network? Also, the services organizations from these larger OEMs may indeed send out cost competitive bids to its former competitors to get the best price for the network.


More at http://tinyurl.com/ctw83x


twitter/mobileinsider 





vlui13280
50%
50%
vlui13280,
User Rank: Light Beer
12/5/2012 | 3:59:11 PM
re: NSN Sees Managed Services as $277B Market


Catherine,


DId NSN publish any kind of article/paper/market study that describe how they size this market to be $277B?


I'd be interested to know the split.


Vincent

From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
The Urgency of Commercial 5G Services

4|26|17   |     |   (0) comments


The progress of 5G has been closely monitored in the industry. At the 2017 Brooklyn 5G Summit, the sense of urgency for a commercial 5G launch had started to surface among operators.
Women in Comms Introduction Videos
How Diversity Helps Comcast Mirror Its Customer Base

4|26|17   |   2:55   |   (0) comments


Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
LRTV Huawei Video Resource Center
Mobile Operators & Video

4|25|17   |     |   (0) comments


Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Surprise! AT&T Markets 4G Advances as '5G Evolution'
Dan Jones, Mobile Editor, 4/25/2017
Did Verizon Outbid AT&T for Straight Path?
Dan Jones, Mobile Editor, 4/25/2017
First Year TIPs the Scale Toward Success
Denise Culver, 4/24/2017
Netflix Set to Enter China
Mari Silbey, Senior Editor, Cable/Video, 4/25/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.