Telco IT spending to reach US$60 Billion in 2017, predicts Ovum

 In a recent market forecast analysis report by Ovum, it was found that as growth slows, market realities mean telcos must find ways to serve their existing customers profitability rather than simply growing their customer bases. Ovum estimates that telco IT spending will reach US$60 billion in 2017, growing at a CAGR of 0.6 per cent between 2013 and 2017. Growth in telco IT spending will be driven primarily by investments in packaged software and system integration. Spending in emerging markets in Asia-Pacific, the Middle East and Africa (MEA), and South and Central America (SCA) will drive global IT spending. In North America, telco IT spending will grow modestly at a CAGR of 0.8 per cent to reach US$17.5 billion by 2017.

Shagun Bali, Analyst for Telecoms Technology, Ovum, said, "Over the next five years, service and tariff innovation will be key revenue-generating strategies, while LTE rollout, network optimization, and creative approaches to partnerships will become focal points for cost savings. Telcos need to monetize new business models, leverage customer data by investing in analytics, and define their response to over-the-top (OTT) players."

Bali further added that, although overall telco IT spending will grow modestly, the trend is for telcos to reduce internal IT spending and increase spending on external IT projects. To control costs, telcos are outsourcing the maintenance of legacy IT and turning to trusted partners, both to implement unified and standards-based systems and software and to provide skills such as those of data scientists for Big Data analytics projects. Consequently, the overall addressable market for vendors will increase.