Communications and Technology Industry Research

The year 2006 is no more, and across the newswires analysts are looking ahead to the fresh year that is barely underway, issuing a variety of predictions regarding how business and technology will unfold during the next twelve months.

 

One such prediction comes today from ABI Research (News - Alert), a firm that keeps a watchful eye on the automotive, wireless, semiconductor, broadband and energy markets. ABI’s latest educated guess involves the growth of managed network services.

 

More specifically, the firm’s outlook is that mobile communications services providers and infrastructure vendors should make a New Year’s resolution to grab a piece of the managed network services market.

 

Offloading network operation tasks to third parties is where the opportunity exists for mobile providers, while infrastructure vendors can utilize the market to secure new revenue streams, ABI said in its report. The firm forecasts double-digit compound annual growth rates for the managed network services market during the next five years.

 

That growth will be driven in part by the challenges service providers face this year, ABI analyst Lance Wilson said.

 

“Service providers will be under pressure from several directions in 2007,” Wilson said in a statement. “They must focus as never before on maximizing profits and reducing costs, rather than just recruiting as many new subscribers as possible.”

 

Operators, ABI said, need to stay focused on their core business of rolling out services, combating churn, and attracting high-paying subscribers—all while adapting to new technologies (e.g. 3G, HSDPA, NGN/IMS).

 

In order to avoid becoming distracted from managing their core business, ABI said, operators will need to utilize managed services, described as “an arrangement in which an outside organization undertakes to manage and run part (or all) of a service provider's network.”

 

For more and more Tier One operators, managed network services are becoming a key strategy for reducing operating expenses while enhancing the operation of networks, ABI said in its report.

 

“In practice, managed services vendors primarily are the major wireless infrastructure equipment vendors,” Wilson noted in a statement. “This is logical: they already have close relationships with the service operators; they have the very deep pockets needed to succeed in this field; and they have always offered some services relating to their own equipment installation and maintenance. Finally, they enjoy economies of scale, because they may offer the same service to many different operators.”

 

ABI noted that the recent Alcatel-Lucent merger, and the pending Nokia-Siemens managed services joint venture, will change the managed services landscape significantly.

 

=========================================================================================

=========================================================================================