Telecoms.com: Lay your bets – Prediction #4
Bengt Nordstrom, founder of industry consultancy NorthStream, shares his predictions for the mobile industry in 2013.
#4 – Managed Services is dead, long live Managed Services
On a macro level, we still see overall revenue growth in managed services at a rate of 17 per cent each year. On a micro level, we see two out of four major managed service vendors retreating. Alcatel-Lucent announced it would review, and possibly exit, 25 per cent of its current 68 managed services contracts. Similarly, current financial pressure seems to impact NSN’s willingness to bring in new Managed Services deals. Ericsson and Huawei provide little visibility of their managed service profitability; as their profit margin figures are embedded in their compound reports of professional services. Clearly, the industry is in a phase of intense competition in the managed service space. Northstream believes that a three player market, with sustainable margins, will emerge. These vendors will also try to position themselves higher up in the value chain of managed services.