Managed services a US$297bn opportunity for telcos by 2020: Ovum

By Tony Chan

A new generation of IT and IP communications services will drive the total value for managed services provided by telcos to their enterprise customers to close to US$300 billion by 2020, according to a new report by market researchers Ovum.

Central to that opportunity is US$173 billion in “new strategic ICT services revenues,” which will become the biggest contributor for growth in managed services with a compounded annual growth rate of 9.9% over the next five years. Strategic ICT services include business IT and IP applications, compute and hosting, enterprise mobility, managed networks, professional services, and unified communications.

“Telcos have relied on adapting traditional voice and data services to serve increasingly complex enterprise business users, but now have a powerful range of ICT services that have been integrated across the operators’ global networks,” said Ovum principal analyst for enterprise practice and author of the report David Molony.

“Telco revenues from strategic ICT services are growing faster and, according to our calculations, will overtake legacy service revenues in 2018.” While Ovum forecast growth across all regions, it tipped some to post steeper upward curves led by Latin America (17.8%), Africa (17.5%), the Middle East (16.4%), and Central Asia (13%).

The mature markets, North America and Europe, were projected to grow slower, but to remain the biggest markets in 2020. At the same time, telecoms operators are muscling in on the traditional ICT services market, and challenging, as well as partnering with, systems integrators and big IT firms.

“Telcos have taken more than 14% of the global ICT services market in the last couple of years,” said Molony. “We expect that share to reach more than 18% by 2020.”

(This article first appeared on CommsDay)