March 31, 2010 15:56 ET

TBR Reports Telecom Infrastructure Services Market Declined to $70 Billion in 2009

Ericsson Global Services Maintains Market Share Lead; Professional and Managed Services See Continued Strong Growth

HAMPTON, NH--(Marketwire - March 31, 2010) -  According to Technology Business Research's recently published Telecom Infrastructure Services (TIS) Addressable Market Forecast, global suppliers of services for telecom operators saw revenue decline nearly $4 billion, or 5%, from 2008 to 2009, as a global slowdown in new network equipment investments led to a marked decrease in deployment-related services. According to TBR Executive Analyst Michael Sullivan-Trainor, "During 2009, the professional and managed services segments balanced the slowdown in deployment services revenue, allowing network equipment suppliers to maintain market position. Clearly, a complete TIS portfolio has become table stakes for large network equipment suppliers that want to maintain a steady revenue flow during times of slowed equipment spending."

The TIS Addressable Market Forecast tracks the market share of leading telecom equipment suppliers and provides forecasts for the rapidly evolving market for deployment, maintenance, consulting and integration, and managed services to telecom service providers. With 15% market share in 2009, Ericsson maintained a clear lead over both Nokia Siemens Networks and Alcatel-Lucent. For its part, Nokia Siemens posted one of the strongest growth rates seen in the services segment last year, particularly in professional services. Collectively, the five largest TIS providers, including HP and IBM, accounted for more than half of the total $70 billion in TIS revenue generated worldwide in 2009.

2009 Telecom Infrastructure Services Market Model
Vendor	2009 Rank	2009 Market Share
Ericsson	1	15%
Nokia Siemens Networks	2	11%
Alcatel-Lucent	3	11%
HP	4	9%
IBM	5	8%
Huawei	6	5%
Accenture	7	5%
Amdocs	8	2%
Motorola	9	2%
Cisco	10	2%
SOURCE: TBR

2009 MARKET TRENDS
The continued decline in equipment sales that affected all major infrastructure vendors raised the importance of their services businesses, as Ericsson, Alcatel-Lucent and Nokia Siemens Networks all reported services accounting for more than 40% of total run rate revenue entering 2010. Meanwhile, the increasing intersection of the network and IT worlds means traditional network equipment suppliers are increasingly encroaching on the consulting and systems integration domain traditionally dominated by IT vendors such as IBM, HP and Accenture. Moreover, software vendors such as Oracle and Amdocs are capturing an increasing share of the total TIS market, as areas such as OSS/BSS integration and subscriber data and policy management software grow in importance.

Key findings:

• The 2009-2014 TIS market will see suppliers gradually shift their roles from equipment implementers to creators of business models. Service providers faced with declining long-term profitability following the global recession will demand nothing less, and suppliers who can provide creative financial models backed by deep expertise in transformation will gain market share.
• Even during the low point in the market in early 2009, service providers continued to invest in TIS, viewing optimization and managed services as a means of expense relief. Now, with the recession easing, LTE rollouts imminent, and broadband initiatives driving infrastructure spending, the next five years will see strong growth and the emergence of new converged telecom-IT TIS solutions to address the entire service provider business and support third-party application developers.
• Maintenance spending, deferred throughout the recession, will surge in the early years of the forecast, followed by solid growth from new network overlays. TBR expects remote maintenance solutions to be favored.
• As evidenced by the significant 2009 deal announcements in mature markets including the United States, the United Kingdom and Italy, as well as emerging market deals in India and Africa, opex relief is increasingly coming through managed services, with more and more providers turning to partnerships with trusted suppliers.

FOR ADDITIONAL INFORMATION
The TIS Market Model is part of a comprehensive forecasting and analysis service that includes:

• TIS 2009-2014 Addressable Market Forecast report (just released)
• TIS Industry Benchmark reports (quarterly)
• TIS coverage included in TBR's quarterly supplier reports
• Custom TIS-related projects

For additional details on syndicated and custom project options related to TBR's TIS coverage, please contact James McIlroy, Vice President of Sales, 603-929-1166, mcilroy@tbri.com.