Telecoms services revenue to stay flat until 2018

Ovum research suggests increased competition and limited demand will curb opportunities

Services providers in the telecommunications space will see another six years of relatively flat revenue, according to research from market watcher Ovum.

Ovum has forecast just two per cent growth per year from 2012 until 2018 for telecoms services providers, as carriers struggle with increased competition and limited customer demand.

Matt Walker, principal network infrastructure analyst at Ovum, said services providers must keep tight control over capex yet maintain their tech investment.

"Both their customers and the competition demand this. What is changing is that operators are more smartly attacking their opex budgets, which opens up new opportunities for vendors," he added.

End users would in coming years remain more interested in buying devices or apps than in purchasing services, or in usage-sensitive billing.

Vendors would need to develop better financial reporting to get control over opex, Walker added, and services providers must focus consistently on cost control, which should enable them to take advantage of opportunities on offer from carriers around network rollout, operations, optimisation, customer experience and service quality management.

According to Ovum, network/IT operations comprise on average 18 per cent of telco operating costs, and 60 per cent is for spending internally – mostly using salaried staff.

"If you are an operator, this is a huge cost that needs to be managed. As operators look to lower operating risks and their cost bases, one option is additional services projects that involve the transfer of employees," Walker said.