Network Managed Services Shares Stabilizing as the Top Three Vendors, Firmly Led by Ericsson, Capture 81% Market Share

11 Nov 2013

ABI Research finds that the overall 2013 Network Managed Services market is turning into a rather flat year for the major mobile telecom infrastructure vendors. Based on the first three quarters, ABI Research projects 2013 will end with Ericsson maintaining its market share while Huawei continues its ascent into the second place position. Nokia Solutions and Networks and Alcatel-Lucent report declines that are a result of rationalizing their portfolio of contracts with continuing competitive pressures on this market that already has razor-slim margins, though Q4 revenues could revert positions.

ABI Research projects that the Mobile Networks Managed Services delivered by the leading infrastructure vendors will show little growth for 2013, at just under $11B revenue. “Ericsson is under no threat to its commanding market share even though revenues have not grown as in previous years,” says Joe Hoffman, research director. “If Huawei continues its upward momentum in Q4, we will see it land in 2nd position.”

The Mobile Networks Managed Services market delivered by infrastructure vendors shows signs of nearing an equilibrium in market share, as the top three vendors account for 81% of revenues, aligning with The Rule of Three and Four. As this is an industry where scale and execution are everything, we expect that the financial headwinds will continue for the smaller service providers.

“Managed Services as a means to bring competitive advantage and revenue enhancement to operators is a growing trend worth noting, as the days of simply outsourcing to reduce costs are fading,” adds Hoffman. “Operators are looking to seize any opportunity to maximize margins, and the long term competitive advantages will accrue to vendors who maintain scale and execute.” Even so, dark clouds are on the horizon, as the advent of SDN/NFV and moves to the datacenter may provide an opening for IT managed service vendors.

These findings are part of ABI Research’s CEM & Managed Services Research Service. As part of the Telco Software, Optimization & Monetization Research Practice, ABI Research provides unique market and strategic insight for operators, vendors, and other clients throughout the world.

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