Opex Worries Drive More Telcos to Vendors for Managed Services, Report Finds

The need for lower opex drives opportunities for technology vendors to build revenue streams through managed services outsourcing, says Light Reading Insider

Aug 19, 2009

The need among both fixed and mobile network operators to lower operating expenses is creating a huge opportunity for technology vendors to build new revenue streams through managed services outsourcing, according to the latest report from Light Reading Insider (www.lightreading.com/insider), a paid research service of TechWeb's Light Reading (www.lightreading.com).

Telecom Managed Services: The Rise of the Hollow Operator delivers an in-depth analysis of the current state of the telecom managed services sector. It maps the functions that network operators are turning over to third parties and analyzes the very broad range of companies offering telecom managed services to fixed and mobile network operators, looking at how their portfolios differ. The report investigates future prospects for the market, and provides profiles of 18 leading providers of telecom managed services.

  For a list of companies covered in this report, please see:

"The multiple pressures placed on fixed and mobile operators in hyper competitive, slowing markets are requiring operators to find fresh ways to cut business costs," says Simon Sherrington, research analyst with Light Reading Insider and author of the report. "Telecom managed services, only a few years ago considered risky to apply to anything except back-office IT systems, has now permeated all operator types, all regions of the world, and practically all network functions."

The trend will give rise to the "hollow operator" -- service providers that own all or most of their infrastructure but that cede operation of that infrastructure to one or more third parties, Sherrington says. "Hollow operators will seek out third-party partnerships to offload more and more operational functions, with an eye toward cutting opex costs and freeing up internal resources for more intense business development activities."

Key findings of Telecom Managed Services: The Rise of the Hollow Operator include the following:

  --  The use of managed services has become a mainstream strategy for
      telecom network operators
  --  Technology vendors are reporting strong revenue growth for telecom
      managed services, now a robust part of the telecom industry
  --  The demand for new revenue means operators must find cost-effective,
      rapid ways of bringing new, innovative, differentiating services to
  --  Early contracts are coming up for renewal, and vendors may get swapped
      out if they are not able to deliver continued value growth

  --  Operators that do not have a managed services strategy must reevaluate
      their position to avoid being left behind by their rivals

Telecom Managed Services: The Rise of the Hollow Operator is available as part of an annual single-user subscription (12 monthly issues) to Light Reading Insider, priced at $1,595. Individual reports are available for $900 (single-user license).

To subscribe, or for more information, please visit: www.lightreading.com/insider. For more information on all of Light Reading's Insider services, please visit www.lightreading.com/research.

To request a free executive summary of the report, or for details on multi-user licensing options, please contact:

  Jeff Claudino
  Director of Sales
  Insider Research Services

  Press/analyst contact:

  Dennis Mendyk
  Managing Director
  Insider Research Services

  About Light Reading

Founded in 2000, Light Reading (www.lightreading.com) is the leading online media, research, and focused event company serving the $3 trillion worldwide communications market. Lightreading.com is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading's research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events Interop, Web 2.0, Black Hat and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, Wall Street & Technology magazines. TechWeb also provides end-to-end services ranging from next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than $2.5 billion.

  * 13.3 million business decision-makers: based on # of monthly connections

  About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM's businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to http://www.unitedbusinessmedia.com/.

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SOURCE: Light Reading Insider

CONTACT: Jeff Claudino, Director of Sales, +1-619-229-9940,
claudino@lightreading.com, or Dennis Mendyk, Managing Director,
+1-201-587-2154, mendyk@heavyreading.com, both of Insider Research Services

Web Site: http://www.lightreading.com/insider