Vendors Serve an Ace
Behind the device doom and gloom, though, lay signs that the managed services market prospects for those handset firms' direct relatives, Ericsson AB (Nasdaq: ERIC) and Nokia Networks , is growing.
NSN, for example, now generates 45 percent of its revenues from services, and today announced a major new $1.55 billion deal in Brazil. (See Services Now 45% of NSN Revenues.)
Ericsson, meanwhile, today announced a multi-year managed services deal with Telefónica SA (NYSE: TEF) outfit Telefónica UK Ltd. . The giant Swede will provide "field maintenance services for radio and switch sites, spare parts management logistics support as well as optimisation and drive services and facilities engineering services" for the operator's 2G and 3G networks, for which it also supplies network infrastructure.
This is a deal worth noting: O2 is the U.K.'s biggest mobile operator with more than 20 million mobile customers that generate quarterly revenues of more than €1.5 billion ($2.12 billion).
Other major vendors, such as Alcatel-Lucent (NYSE: ALU) and Huawei Technologies Co. Ltd. , are also dead keen on growing their services revenues and becoming indispensable partners to the world's major operators, so expect to see a great deal of healthy, and occasionally unhealthy, competition in the vendor services sector in the coming years. (See Vendors Scrap Over Managed Services Deals.)
— Ray Le Maistre, International News Editor, Light Reading