Global managed services forecasts, 2012-17

CONTENTS Total addressable market Managed services revenues by sector Managed services revenues by region Network-led managed services revenues Data and applications managed services revenues Managed OSS/BSS services Managed service provider market share forecast Notes and methodology

Informa UK Limited 2012. All rights reserved.

The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trade marks, service marks or trading names of their respective owners, including Informa UK Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa UK Limited.

Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa UK Limited nor any person engaged or employed by Informa UK Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UK Limited.

INTELLIGENCE CENTRE

n engaged or employed by
readers assume full

CONTENTS PAGE

Total addressable operator services market

Segment Internal services Professional services Managed services* Total

Region Global Global Global Global

Units US$ bil. US$ bil. US$ bil. US$ bil.

2012 175.0 70.0 23.2 268.2

2013 185.0 75.0 24.7 284.7

*Managed services forecasts above are a subset of professional services

CONTENTS PAGE

2014 195.0 80.0 26.4 301.4

2015 200.0 88.0 28.4 316.4

2016 210.0 93.0 30.7 333.7

2017 220.0 100.0 33.3 353.3

CAGR (%) 4.7 7.4 7.5 5.7

Total managed services revenues by sector

Service revenues (US$ mil.) Segment Network services Data & Applications services Managed OSS/BSS services Total Region Global Global Global Global Units US$ mil. US$ mil. US$ mil. US$ mil. 2012 12,695.5 5,371.2 5,131.4 23,198.1

CONTENTS PAGE

Service revenues (US$ mil.) 2013 13,514.7 5,708.2 5,491.7 24,714.5 2014 14,399.5 6,103.2 5,887.4 26,390.0 2015 15,472.2 6,556.7 6,344.5 28,373.4 2016 16,681.3 7,100.0 6,933.5 30,714.8 2017 17,986.2 7,688.6 7,577.5 33,252.3

CAGR (%) 7.2 7.4 8.1 7.5

Total managed services revenues by region

Service revenues (US$ mil.) Region North America Latin America Asia Pacific Asia Pacific Asia Pacific Europe Europe Europe Middle East Africa Global Sub Region Total Total Total Asia Pacific Developed Asia Pacific Developing Total Western Europe Eastern Europe Total Total Total Units US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. 2012 2,455.5 2,031.5 6,318.8 1,744.3 4,574.5 9,239.4 6,702.6 2,536.8 1,274.7 1,878.1 23,198.1 2013 2,610.5 2,180.4 6,747.3 1,852.5 4,894.8 9,802.8 7,119.6 2,683.2 1,363.9 2,009.6 24,714.5

CONTENTS PAGE

2014 2,774.5 2,346.7 7,218.6 1,963.7 5,254.9 10,406.8 7,562.6 2,844.2 1,473.0 2,170.3 26,390.0

2015 2,976.8 2,542.2 7,819.0 2,101.1 5,717.9 11,081.3 8,050.8 3,030.5 1,593.9 2,360.2 28,373.4

2016 3,213.9 2,770.1 8,503.7 2,261.4 6,242.2 11,918.7 8,669.4 3,249.3 1,732.6 2,575.8 30,714.8

2017 3,470.2 3,018.6 9,248.8 2,434.1 6,814.8 12,820.0 9,336.0 3,484.0 1,883.5 2,811.2 33,252.3

CAGR (%) 7.2 8.2 7.9 6.9 8.3 6.8 6.9 6.6 8.1 8.4 7.5

Network managed services revenues by region

Service revenues (US$ mil.) Region North America Latin America Asia Pacific Asia Pacific Asia Pacific Europe Europe Europe Middle East Africa Global Sub Region Total Total Total Asia Pacific Developed Asia Pacific Developing Total Western Europe Eastern Europe Total Total Total Units US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. 2012 884.9 765.7 3,946.4 1,011.3 2,935.1 5,056.7 3,666.1 1,390.6 638.1 1,403.7 12,695.5 2013 938.0 819.3 4,212.5 1,072.0 3,140.5 5,360.1 3,886.1 1,474.0 682.7 1,502.0 13,514.7

*Consultancy services pertinent to network-led managed services included in total figures

CONTENTS PAGE

2014 984.9 876.6 4,496.7 1,136.4 3,360.3 5,681.8 4,119.3 1,562.5 737.3 1,622.1 14,399.5

2015 1,044.0 946.7 4,878.7 1,215.9 3,662.8 6,038.3 4,366.4 1,671.9 796.3 1,768.1 15,472.2

2016 1,117.1 1,022.5 5,293.4 1,301.0 3,992.4 6,461.0 4,672.1 1,788.9 860.0 1,927.3 16,681.3

2017 1,195.3 1,104.3 5,743.8 1,392.1 4,351.7 6,913.2 4,999.1 1,914.1 928.8 2,100.7 17,986.2

CAGR (%) 6.2 7.6 7.8 6.6 8.2 6.5 6.4 6.6 7.8 8.4 7.2

Data & Applications managed services revenues by region

Service revenues (US$ mil.) Region North America Latin America Asia Pacific Asia Pacific Asia Pacific Europe Europe Europe Middle East Africa Global Sub Region Total Total Total Asia Pacific Developed Asia Pacific Developing Total Western Europe Eastern Europe Total Total Total Units US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. 2012 803.6 594.9 1,240.3 375.0 865.3 2,137.5 1,553.7 583.8 378.6 216.3 5,371.2 2013 851.8 636.5 1,323.4 397.5 925.9 2,259.9 1,646.9 613.0 405.1 231.5 5,708.2

*Consultancy services pertinent to data & applications managed services included in total figures

CONTENTS PAGE

2014 911.5 687.5 1,421.3 421.4 999.9 2,395.5 1,745.7 649.7 437.5 250.0 6,103.2

2015 984.4 742.4 1,530.8 450.9 1,079.9 2,556.6 1,867.9 688.7 472.5 270.0 6,556.7

2016 1,063.1 809.3 1,664.1 486.9 1,177.1 2,754.3 2,017.4 736.9 515.0 294.3 7,100.0

2017 1,148.2 882.1 1,809.0 525.9 1,283.1 2,967.3 2,178.7 788.5 561.3 320.8 7,688.6

CAGR (%) 7.4 8.2 7.8 7 8.2 6.8 7 6.2 8.2 8.2 7.4

Managed OSS/BSS services revenues by region

Service revenues (US$ mil.) Region North America Latin America Asia Pacific Asia Pacific Asia Pacific Europe Europe Europe Middle East Africa Global Sub Region Total Total Total Asia Pacific Developed Asia Pacific Developing Total Western Europe Eastern Europe Total Total Total Units US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. US$ mil. 2012 767.0 671.0 1,132.1 357.9 774.2 2,045.2 1,482.8 562.4 258.1 258.1 5,131.4 2013 820.7 724.7 1,211.4 383.0 828.4 2,182.8 1,586.6 596.2 276.1 276.1 5,491.7

*Consultancy services pertinent to managed OSS/BSS services included in total figures

CONTENTS PAGE

2014 878.1 782.6 1,300.6 405.9 894.7 2,329.6 1,697.7 632.0 298.2 298.2 5,887.4

2015 948.3 853.1 1,409.5 434.4 975.2 2,486.4 1,816.5 669.9 325.1 322.1 6,344.5

2016 1,033.7 938.4 1,546.2 473.5 1,072.7 2,703.4 1,980.0 723.5 357.6 354.3 6,933.5

2017 1,126.7 1,032.2 1,696.0 516.1 1,180.0 2,939.5 2,158.2 781.3 393.3 389.7 7,577.5

CAGR (%) 8 9 8.4 7.6 8.8 7.5 7.8 6.8 8.8 8.6 8.1

Managed service provider market share forecast

% total operator managed services Mkt Service provider Ericsson IBM Nokia Siemens Huawei Alcatel-Lucent Others Region Global Global Global Global Global Global Units % total Mkt % total Mkt % total Mkt % total Mkt % total Mkt % total Mkt 2012 15% 10% 8% 7% 7% 53%

CONTENTS PAGE

% total operator managed services Mkt 2017 14% 10% 7% 9% 6% 54%

CONTENTS PAGE

Notes and methodology

Definitions
The Informa Telecoms & Media forecasts aim to provide a global view of managed services and their context within the overall third party telecoms services market. As part of this process, we have initially estimated total services spending by both the fixed line and mobile telecoms industry and broken it down into internal and external expenditure. This external expenditure figure is defined as professional services, and includes managed services which are described in more detail below, as well as a number of additional broad service categories. These cover: Consultancy and systems integration Education and training Network rollout.

Internal spending by communications service providers includes a wide range of categories, but marketing and business support, network support and OSS/BSS system support are all significant items, with regional variations in budget allocation. The 2012 forecasts focus in depth on managed services spending over the period to 2017, and separate the market into three main segments: o o o o o o o o o Network services Network provisioning Network operation/management Network maintenance (support/repair) Shared delivery solutions (network sharing) Network optimisation Data and applications services Value-added consumer services Business applications (eg workforce management, supply chain management) Data management/delivery Cloud-based support

Managed OSS/BSS services o billing, customer management, analytics, revenue management, etc Project-based planning and consulting is included in each of the three segments above as appropriate. However, strategy consulting and IT integration are excluded.

Methodology

These managed service forecasts are based on a number of the outputs from a forecasting model built which is based on a number of critical assumptions: original research of the public domain the views of Informa Telecoms & Media analysts information contained in Informa Telecoms & Media online and published products and services high-level industry interviews with key players in the industry. The forecasting model was designed to examine the managed services market from a top -down perspective in order to estimate an overall market size for 2012, and then to take a bottom-up approach to calculate potential market growth on a segment by segment and region by region basis. The 2012 market size estimates were based on data collected from primary interviews with managed services providers allied to analysis of secondary research sources, including online information and published financial data. An analysis of publicly announced managed services contracts was carried out, based extensively on information from Informa Telecoms & Medias Managed Services & Outsourcing Contracts database. Forecasting the managed services market is complex. There are many inter-related factors that will influence market development, and attitudes in the telecoms industry towards managed services are changing rapidly. Managed services providers all have different definitions of what constitutes managed services and indeed it is fair to state that no two managed services contracts are alike. Additionally, estimating the current value of the market is fraught with difficulties mainly due to the lack of detailed information on the value of existing contracts, coupled with the fact that many managed services contracts are entwined in much larger infrastructure supply and deployment contracts

CONTENTS