The telecom sector is currently witnessing a rapid rise in competition among the telecom operators which in turn is affecting its profitability and growth. Decline in average revenue per unit is also impacting the telecom industry. Telecom operators are under constant pressure to manage their capital expenditures in network deployment to reduce their operating costs. IT service providers help telecom operators achieve these goals.
Thus, the market has currently observed telecom operators outsourcing value-added services comprising content services, next generation communication services and commerce services to IT service providers. This helps telecom operators to curb their operating expenses. Outsourcing will facilitate the telecom operators to dedicate more efforts towards revenue generating activities, such as customer acquisition.
Thus outsourcing is a very crucial development without which the telecom operators would lose revenue in both; marginalization of bearer services (voice and data) and other Value Added Services (VAS). Telecom IT services offered by IT service providers to telecom operators enables the operators to function their business more competently. IT services facilitates telecom operators to deliver the telecom services efficiently and effectively. Moreover, IT services enable operators to understand customer expectations and thus reduce customer churn by enhancing customer service. Increasing need to remain competent and rising financial pressures faced by the telecom operators are the factors driving the telecom IT services market.
Telecom IT services market offers a wide variety of solutions such as customer relationship management, mobile commerce, enterprise mobility, network management, supply chain management, operations support system and business support systems.
Moreover, the operator portfolio is getting complex mainly due to mergers and acquisitions in the industry. For instance, the takeover of Mobilink Telecom by Broadcom and Bellsouth by AT&T Inc. Integration of the new infrastructure with the exiting operating infrastructure is a challenge to the industry. The telecom operators lack the proficiency required to integrate complex operating infrastructure.
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Thus to reduce this degree of complexity pertaining to issues related with integrating network and services, telecom operators partners with IT service providers. Increasing cost pressure, decreasing profits and extensive competitive rivalry are some of the factors that have compelled telecom operators to reach to the IT service providers to optimize their business processes.
High capital expenditure needed for IT services and constantly changing government regulations are inhibiting the growth of this market. These factors have resulted in a reduced investment in this market and have proved to be a major hindrance affecting its development. Top players such as Huawei Technologies Co. Ltd. and IBM Corporation dominate the global Telecom IT services market.
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This dominance is threatened by emerging technologies such as Software Defined Networks (SDN) and Network Function Virtualization (NFV). Features such as flexibility, virtualization, network automation and orchestration associated with these technologies are expected to create potential opportunities for the telecom IT services market in near future.
Some of the major players in the telecom IT services market are Accenture Plc., Amdocs Limited, Alcatel-Lucent S.A., Capgemini S.A., Cognizant Technology Solutions, Telefonaktiebolaget L. M. Ericsson, Hewlett-Packard Company, Huawei Technologies Co. Ltd., IBM Corporation and Oracle Corporation.
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