Product Code: IT024-000011
Telcos are facing a range of business pressures within their industry, from finding new customers to bringing new products and services to market. Their internal IT is unable to address these pressures in a cost-effective and efficient manner, so they are increasingly turning to IT services providers for assistance.
- In 2013, we observed a significant increase in the number of outsourcing deals awarded by telcos to IT service providers, compared to 2011 and 2012.
- Stifling market and business conditions are forcing telcos to reconsider their business and operational activities, in order to reduce their ongoing cost base while encouraging innovation that will support sustainable revenues.
- Telcos are looking to IT service providers for help in resolving their current business challenges, which include declining revenues and increasing operatiing expenses.
- Provides insights into the main drivers influencing telcos' current engagements with IT service providers.
- Provides insights into the possible areas where telcos require the expertise of IT service providers to solve the challenges they face.
- The report provides recommendations on how IT service providers can hit telcos' sweet spot in terms of selling their offerings to the vertical.
- Why is there increased demand from telcos for services provided by IT service providers?
- What are the main drivers influencing this increased demand from telcos?
- What are the key trends associated with engagements between telcos and IT service providers?
Table of Contents
- Ovum view
- Key messages
- telco Market drivers
- Top telco business challenges present opportunities for IT service
- Increasing revenues and growing market share
- Telcos look to other verticals for new growth opportunities
- Improving operational efficiency
- Retaining customers and improving customer experience
- telcos ramping up engagments with outsourcers
- A clear and substantial increase in outsourcing activity
- Sample IT services/outsourcing contracts from telco customers
- Base Company - Tech Mahindra, TCV $40m, announced Aug 2013
- Vodafone - Amdocs, TCV $15m, announced Aug 2013
- Telenor - Accenture, TCV $215m, announced Jul 2013
- Telefonica SA - Capita, TCV $1.8bn, announced May 2013
- Vietnam Mobile Telecom Services - IBM, TCV $75m, May 2013
- T-Mobile - Ericsson, TCV $18m, announced May 2013
- Telcos need specialist skills to improve their business operations
- Business models and maturity drive outsourcing activity
- Types of IT services and outsourcing for telcos
- RECOMMENDATIONS for telcos
- Telcos cannot afford to ignore the need to transform any longer
- Start small and grow in outsourcing
- recommendations for outsourcing providers
- Business outcomes must take higher priority
- Improving customer experience remains a key challenge for telcos
- Experience in telecoms is not enough
- Further reading
- Ovum Consulting
- Figure 1: Telco customers' most important challenges
- Figure 2: Year-on-year revenue growth for the top 23 telcos, 1Q11-3Q13
- Figure 3: Ratio of opex to capex for the top global operators, 2009-2012
- Figure 4: How strongly are these factors driving IT investment at your
- Figure 5: IT services-related contracts awarded by top 23 telcos, split by
- Figure 6: Types of IT services and outsourcing for telcos