Arthur D. Little’s global survey of the telecom infrastructure supplier market – “Are Suppliers Poised for a Turnaround?” – has revealed that Asian vendors and IT companies are increasingly taking market share from more established players. Ericsson, Huawei and Alcatel Lucent emerged as leaders at the end of 2010, but it is clear from analysing supplier operating margins that the market has yet to recover despite six years of consolidation.
“The turmoil in the telecom supplier market is best illustrated by the rapid ascent of Huawei to become number two in terms of revenue through organic growth,” states Dr. Karim Taga, Director of Arthur D. Little’s Global Technology Economics Competence Center.
A global analysis of telecom operators’ spending, which directly impacts supplier revenues, indicates that overall capital expenditure will remain stable at 0.7 percent CAGR between the years 2010 - 2014, with growth primarily coming from spending on equipment. Wireless access infrastructure, already accounting for 43 percent of total telecom infrastructure capex, will increase its overall share as spending continues to shift away from fixed infrastructure.
In addition, emerging market growth has outpaced mature markets in all infrastructure categories, with emerging markets expected to account for 56 percent of overall revenues by 2015.
Current innovations in technology and business models in the telecom industry, such as RAN Sharing and Quality of Service management, have pushed suppliers into an innovation race in terms of both technology and business models.
“The challenges faced by telecom operators open a number of new opportunities for suppliers,” states Mr. Klaus von den Hoff, Global Head of Arthur D. Little’s TIME practice, “but will require a radical rethinking of their business models and offerings.”
The report offers a range of actions that suppliers and operators can take to maximize the emerging opportunities.
To access the full report, please visit:
www.adl.com/suppliers