Where is the TIS market headed over the next 5 years? Insights from the 2012 TBR Addressable Market Forecast

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Telecom Infrastructure Services (TIS) Global Addressable Market Forecast 2012-2017Research Highlights and Outlook

Technology Business Research (TBR) Quarterly Webinar Series

5.14.13

TBR

2 TBR Quarterly Webinar Series | 5.14.13 | www.tbri.com | ©2013 Technology Business Research Inc.

Chris AntlitzNetworking & Mobility Practice AnalystEmail: [email protected]: @chrisNMP

Webinar Presenter

mailto:[email protected]

TBR


TIS

TIS Overview

• Opportunity model

• Market share

• Margin analysis

TBR identifies the largest and fastest-growing services segments, enabling vendors to adjust their services strategy and tactics to capitalize on the best market opportunities.

TBR’s research in Telecom Infrastructure Services (TIS) helps vendors identify growth opportunities and grow market share

Opportunity• More than $95 billion annual

spend by Global Communication Service Providers on professional, managed, deployment and maintenance services

• Identify leaders, strategies and growth opportunities in TIS industry to capture share from competitors and hold off rivals

TBR’s Quarterly TIS Benchmark covers the top 41 TIS suppliers by service type and region

DeploymentMaintenance

Professional ServicesManaged Services

North AmericaCALAEMEAAPAC

TIS Overview

TBR


TIS Company Coverage

Accenture

Agilent

Alcatel-Lucent

Amdocs

American Tower

Atos

Bechtel

Bouygues Construction

Capgemini

CGI

China Communications Construction

Ciena

Cisco

Convergys

Crown Castle

CSG Systems

CTDI

EMC

Ericsson

Fujitsu

General Dynamics

HP

Huawei

Hyundai Engineering & Construction

IBM

Indus Towers

Infosys

Jabil

Juniper

Microsoft

NEC

Nokia Siemens Networks

Oracle

Orascom Construction Industries

Samsung

SAP

SBA Communications

Tata Consultancy Services (TCS)

Tech Mahindra

Wipro

ZTE

TIS Company Coverage

TBR


The AMF is TBR’s forward-looking view of where the TIS market is headed and offers both quantitative and qualitative forecasts

TIS AMF Overview

TIS Addressable Market Forecast Value• Five-year market forecast identifying fastest-growing

TIS segments, geographies and growth drivers

• Pinpoints emerging trends in TIS and provides insight about how the industry is developing

• Identifies major growth areas in TIS and highlights what will drive that growth

Top-down analysis of global TIS market with five-year projection• Market sizing and market share from a global or

North America-specific perspective

• CAGR and trending analysis across services and regions

• Forward-looking view helps TIS suppliers prepare to capitalize on growth opportunities

Addressable Market Forecast (AMF)

TBR leverages its knowledge of TIS from the benchmarks to build a projection of where the global TIS industry is headed and what the major growth drivers, opportunities and challenges will be over the next five years.TBR also publishes an AMF that drills down on the North American market. It provides a comprehensive assessment of North America and focuses on growth drivers, opportunities and challenges that are specific to that region.

TBR


Key TIS Growth Drivers

Key TIS Growth Drivers

Broadband Deployments

Outsourcing

Business Model Transformation

TIS market projected to grow at 2.2% CAGR through 2017 as operators deploy next-gen technologies and evolve their business models for growth

TBR


LTE deployments will peak globally in 2014; the LTE investment wave will also drive maintenance, professional and managed services

Services Segment Forecast

• Growth correlates closely with LTE deployments

• Outsourcing to remain popular opex reduction tool for operators

• Business model transformation to drive professional services

$24.5 $26.5 $29.6 $28.2 $26.8 $26.0

$25.1 $26.6 $28.7 $28.1 $27.6 $27.0

$23.3 $24.0 $25.2 $26.2 $26.7 $27.2 $22.1 $22.8 $23.5 $24.2 $24.9 $25.7

$0

$20

$40

$60

$80

$100

$120

2012 2013 2014 2015 2016 2017

TIS Addressable Market by Services Segment (BUSD)

Deployment Services Maintenance Services

Professional Services Managed Services

TBR

SOURCE: COMPANY DATA AND TBR ESTIMATES ESTIMATES

TBR


Growth in early years of forecast will track broadband deployments; focus turns to new business model development in later years

Professional Services Sub-segment Forecast

• Operator consolidation, LTE, SDN, and NFV to drive C&SI growth

• OSS/BSS modernization and transformation critical to evolve business models

• Security and application integration are fastest growing spend areas

$1.1 $1.2 $1.3 $1.3 $1.3 $1.3 $1.6 $1.8 $2.0 $2.0 $1.8 $1.8 $1.3 $1.3 $1.4 $1.6 $1.6 $1.6 $1.6 $1.6 $1.7 $1.9 $1.8 $1.8

$6.2 $6.6 $6.9 $7.1 $6.7 $6.5

$2.4 $2.6 $2.8 $2.9 $2.8 $2.8 $1.5 $1.7 $1.8 $1.9 $1.8 $1.8

$7.6 $7.3 $7.1 $7.6 $8.9 $9.6

$0

$5

$10

$15

$20

$25

$30

2012 2013 2014 2015 2016 2017

TIS Addressable Market Professional Services Sub-Segments (BUSD)

Application Integration

BSS Integration

OSS Integration

Network Infrastructure Integration

Training Services

Security Services

Planning, Design and Optimization

Consultancy Services

TBR

SOURCE: COMPANY DATA AND TBR ESTIMATES

TBR


EMEA operators will stretch out the duration of LTE deployments through the forecast period until economic and political clarity becomes evident

Geographic Spend Forecast: Global

• Global TIS spend peaks in 2014 with LTE deployments

• LTE spend in North America peaks in 2013

• EMEA operators to stretch out LTE investment through forecast period

$37.7 $42.5 $42.5 $41.4 $40.5 $39.8

$31.2 $30.8 $34.0 $35.3 $36.4 $37.1

$26.1 $26.5 $30.5 $30.0 $29.0 $29.0

$0

$20

$40

$60

$80

$100

$120

2012 2013 2014 2015 2016 2017

TIS Addressable Market by Geography (BUSD)

Americas EMEA Asia Pacific

TBR

SOURCE: COMPANY DATA AND TBR ESTIMATES ESTIMATES

TBR


Tier 1 operators in the U.S. are the primary drivers of TIS spend in the Americas, and the forecast correlates closely with their LTE deployments

Geographic Spend Forecast: Americas

• LTE and operator consolidation will drive TIS growth in U.S., particularly for professional services

• CALA operators incentivized by governments to rapidly deploy LTE

• CALA operators will embrace managed services to stay competitive

$30.5 $34.5 $33.5 $33.0 $32.5 $32.0

$7.2 $8.0 $9.0 $8.4 $8.0 $7.8

$0

$10

$20

$30

$40

$50

2012 2013 2014 2015 2016 2017

TIS Americas Addressable Market (BUSD)

North America Caribbean & Latin America

TBR


TBR


Network modernizations in Europe will be complete in 2013, giving way to sustained growth in spend to deploy LTE across the region

Geographic Spend Forecast: EMEA

• TIS spend in EMEA declines in 2013 due to Europe recession, but bounces back strong through rest of forecast

• Europe ripe for OSS/BSS overhaul and LTE following RAN modernizations

• Some Middle Eastern operators will be early adopters of new technologies

• Africa to lag in LTE deployment; many operators in region still focused on 3G rollout

$21.4 $20.9 $23.5 $24.6 $25.6 $26.1

$9.7 $9.9 $10.5 $10.6 $10.8 $11.0

$0

$10

$20

$30

$40

2012 2013 2014 2015 2016 2017

TIS EMEA Addressable Market (BUSD)

Europe Middle East & Africa

TBR


TBR


Asia Pacific is moving at different speeds, with LTE builds largely complete in South Korea and Japan; China is next in line to roll out LTE

Geographic Spend Forecast: APAC

• LTE spend in South Korea and Japan peaked in 2012

• China Mobile kicks off massive LTE deployment in 2H13

• Rest of Asia to ramp up investment in 2014

$11.2 $11.5 $13.5 $12.6 $12.4 $12.4

$6.4 $6.5 $7.5 $8.2 $7.6 $7.6

$8.5 $8.5 $9.5 $9.2 $9.0 $9.0

$0

$5

$10

$15

$20

$25

$30

$35

2012 2013 2014 2015 2016 2017

TIS Asia Pacific Addressable Market (BUSD)

Northeast Asia Central Asia Southeast Asia/Oceania

TBR


TBR


Consolidation will be a recurring theme as suppliers seek to bulk up their portfolios and access new markets; Ericsson to stay leader by wide margin

TIS Supplier Market Share

• Despite ongoing M&A, TIS market will remain highly fragmented

• Software firms are primary acquisition targets

Ericsson15% NSN

10%

Huawei7%

IBM6%

Alcatel-Lucent5%HP

4%Cisco4%

Accenture3%

Amdocs3%

Fujitsu3%

Other Suppliers40%

Ericsson

NSN

Huawei

IBM

Alcatel-Lucent

HP

Cisco

Accenture

Amdocs

Fujitsu

Other Suppliers


Telecom Infrastructure Services Market Share in 2012 TBR

TBR


Conclusions

Conclusions

TIS spend growth correlates closely with LTE deployments

Outsourcing to remain popular opex reduction tool for operators

Business model transformation to drive professional services

TBR


TBR Networking & Mobility Practice Syndicated Topics 1Q13: Telecom Vendors

Quarterly Topics TBR Value Proposition Related Reports

Network Function Virtualization

• Determine which vendors are the early leaders in technologies such as software-defined networking and self-organizing networks.

• Evaluate vendor network function virtualization (NFV) road maps.

Alcatel-Lucent, Cisco, Ericsson, IBM, Juniper, NSN, Samsung, ZTE

LTE Deployments

• Identify which vendors are LTE leaders in revenue and contract count.

• Determine in which regions LTE is being deployed.• Anticipate the next regional shift of LTE revenue.

Alcatel-Lucent, Cisco, Ericsson, NSN, Samsung, ZTE

Enterprise Solutions

• Determine which vendors are expanding their addressable markets to cater to the enterprise sector.

• Identify which vendors are making a strategic push into enterprise services, such as consulting and systems integration.

• Analyze which vendors are likely to succeed and which are most likely to spread themselves too thin by catering to the enterprise.

Alcatel-Lucent, Ericsson, Huawei, NSN, Samsung, ZTE

Consolidation

• Track developments in vendor M&As, identifying which players need to acquire to enhance their portfolios or enter new markets.

• Analyze the impact of operator consolidation on the telecom infrastructure and services markets.

Alcatel-Lucent, Cisco, Ericsson, Juniper, NSN, Samsung, ZTE

TBR conducts a major review of the telecom industry on a quarterly basis and identifies key topics to integrate into its syndicated reports

TBR


Chris Antlitz

Analyst, Networking and Mobility Practice

[email protected]

@chrisNMP

Questions?

For further information, please contact:

Kate Price James McIlroyPractice Manager, Networking & Mobility Vice President of [email protected] [email protected]

Q & A

@TBRincwww.slideshare.net/TBR_Market_Insightwww.youtube.com/user/TBRIChannel




TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

About TBR

Technology Business Research (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.

Serving a global clientele, TBR provides timely and accurate market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.

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Where is the TIS market headed over the next 5 years? Insights from the 2012 TBR Addressable Market Forecast

Technology

technology

north america

tis market

forecast period

lte deployments

south korea

operator consolidation

growth opportunities