Managed Services in LTE Era Report 2011-2016

Date: July 23, 2011
Pages: 139
US$ 2,325.00
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Publisher: Visiongain
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)

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Managed Services in LTE Era Report 2011-2016
Managed Services Enter the Rapid Growth Stage: Which Mobile operators are taking advantage of this OpEx saving opportunity?

Are the other operators losing out by not formulating managed services strategies?

Managed Services is having a transformative affect on the wireless value chain in general and operators in particular. The managed services market was around $55 billion in 2010, we believe the market is poised to reach $86 billion by 2016.Global trends that are driving managed services include the explosive growth of data services and advent of LTE networks. Our research suggests that increasing number of operators want to capitalise on the plethora of tangible and intangible benefits offered by managed services. This report details all the latest developments in this sector along with the strategies that will help the operators to maximise their gains.

Mastering the Value Disciple of Operational Excellence

MNOs need to understand the importance of optimising business processes across the functional and organisational boundaries and externalise all non-core activities. Maintaining current operations while building for the future requires enormous investment in enabling systems, tools and business processes. Several operators are addressing these challenges by transferring network related functions as well as of B/OSS and service delivery application, infrastructure and business process management functions to an outsourcing partner.

This report describes the managed services strategies for MNOs who are planning to deploy LTE. In LTE environment, MNOs need to adopt a lean business model and overcome organisational limitations. This will help MNOs to reduce the payback period and maximise profits while remaining competitive. Operators across the globe are embracing managed services particularly in the EMEA region, Asia Pacific and the Emerging markets of India and China. However, many US carriers view networks as a source of competitive advantage and do not want to embark on managed services strategy. Visiongain believes that these carriers will continue to manage the networks in-house until 2013, with LTE deployment providing the necessary cost saving needed to increase the EBITDA levels. We discuss these opinions and analyse their feasibility.

Capitalising on Managed Services - Strategies and Potential Revenues

Our research suggests that increasing number of operators believe that they do not need to have a complete control over their LTE networks. This outlook is gearing operators towards managed services. Visiongain believes a properly structured and executed managed service for LTE networks will deliver between 10% and 20% OpEx savings, which in certain cases can have a real effect of increasing EBITDA by 8%.

What is Different about this Report?

We conducted an independent and unbiased non-vendor affiliated assessment of the Managed Services topic. We interviewed key industry players in order to gain an in-depth view of the market. We believe such a research will help you in assessing the market potential of Managed Services.

Some of the key points that emerged from this research include:
  • In 2011, Managed Services have evolved into a broad category. It is one of the fastest growing areas in the telecoms industry. Visiongain believes Managed Services will play a key role in the way the telecoms industry will shape up in the coming years.
  • Managed Services now extend beyond the traditional definition of outsourced IT services to cover managing applications stores and emerging areas such as cloud computing and SaaS (Software as a Service). Managed Services will evolve around the cloud.
  • Managed Services will further gain popularity as the drive towards cost-control with LTE networks intensifies.
  • Much of the growth in outsourced services is coming from EMEA (Europe, Middle East, and Africa) and Asia Pacific. Western Europe, India and China will emerge as key LTE Managed Services markets.
  • Visiongain believes outsourcing will save 25-30%in OpEx in an ideal case scenario, however if operators fail to integrate their various managed services initiative across their value chain, the savings reduce to 5-10%.
  • The degree and scope of managed service contract will vary greatly across the globe, but in all regions, operators will embrace managed services at some level.
  • Operators may find it easiest to stick with their existing managed services providers as they migrate to LTE.
  • We believe that with Managed Services operators can expect a faster ROI usually half the time compared to in-house LTE management.
  • Majority of operators in US will focus more on business strategy, sales and marketing and outsource technical and operational aspects by 2016.
  • Over 65% of MNOs will use some form of managed services by 2016.
Questions Answered by this Report
  • Which MNOs have adopted managed services for their LTE networks?
  • What is the market opportunity for managed services providers?
  • What are the implications for MNOs who embrace managed services and how does it affect their position on the value chain?
  • What are the benefits, challenges and barriers? Are there any negatives to be considered?
  • Do managed services enable MNOs to modernise and ease the transition from GSM to LTE?
  • Do managed services enable operators to finance the deployment of LTE?
  • What direction are managed service deals gearing?
  • To what extent can managed service deals help drive transitions to LTE?
  • What impact can telecom vendor managed service deals have on the competitive mix of LTE service deployments?
  • What is the addressable market for managed services?
  • Who are the key players in the managed services market?
  • What are the drivers for managed services?
  • What are the regional differences in managed services adoption?
  • What are the operators' views on managed services?
  • How can managed services providers overcome operators' reluctance to use them?
  • What is the five-year forecast for managed services?
  • What are some of the innovative managed service offerings?
  • Where are the opportunities for managed services providers?
  • What is the SWOT analysis for Managed Services from Operator/Managed service Provider Perspective?
Who needs to read this report?
  • MNOs and MNVOs can make informed decision before embarking on managed services strategy. They can gain an insight into MSP's strategies and compare various solutions on the market
  • Managed Services Providers can identify the types of MNOs likely to embark on a managed services strategy. They can also analyse the consolidation opportunities in this market by 2016. The report also offers insights into the market developments and recommendation to succeed in this competitive market place
  • Backhaul service providers can understand the LTE market dynamics and managed services strategies pursued by operators
  • Financial institutions: How will the search of new managed services opportunities shape the competitive landscape among telecom vendors and operators?
  • Greenfield operators can understand how to capitalise on managed services and gain competitive advantage over established players
  • Investors can understand the managed services offerings and market, its value chain and potential

E1. Managed Services are shaping the Wireless Value Chain
E2. The Dawn of the LTE Boom
E3. MSPs (Managed Service Providers) are transforming themselves to address the LTE Challenges
E4.Mobile Operators are Embracing New Business Models that offer OpEx Saving Opportunities
E5.Combined LTE and Managed Services Strategy can further bring down Cost per mega bit
E6.Managed Services will be at the Centre of LTE Business Models
E7.Survival of the Fittest in the Fast Growing Managed Services Market
E8.Highlights of the Report


1.1 LTE: The Next Big CapEx/OpEx Driver
1.2 LTE Offers Opportunities to Explore New Business Models
1.3 Mastering the Value Disciple of Operational Excellence
1.4 Analysing Managed Services
  1.4.1 Managed Services are Altering MNO's Value Chain
1.5 Factors Fuelling the Growth of Managed Services
1.6 Aim of the Report
  1.6.1 Questions Answered by this Report
1.7 Report Structure
1.8 Report Scope
1.9 Methodology


2.1 Defining Managed Services for LTE Networks
  2.1.1 Exploring the Role and Responsibility of a Managed Service Provider Defining Managed Service Provider (MSP)
  2.1.2 Activities that Come Under Managed Services Managed LTE Network Operations Benefits of Managed Network Operations Managed Network Operations Centre Capacity Management
  2.1.3 Managed Services: Service Management BOSS: The Largest Components of Managed Service Can the Outsourcing of OSS layer Management Guarantee Improved Service Assurance? Managed Data Services Hosting of Platform, Application and Contents Benefits of Hosting to MNOs Managed Platform Outsourcing
  2.1.4 Managed Services Strategies for LTE Networks
  2.1.5 Managed Services: 3G and GSM Networks
  2.1.6 The Managed End-to-End Services Operations Solution


3.1 Identifying Managed Services Provider Categories
3.2 Top Infrastructure Vendors and their Foray into Managed Services
  3.2.1 Global Infrastructure Sales Forecast to 2016
3.3 LTE Vendors and their Position in the LTE Market
3.4 Managed Services Providers
  3.4.1 Ericsson's Revenues from Managed Services in 2010 Ericsson Dominates the Managed Services Market
  3.4.2 NSN NSN Acquires Motorola's Assets Motorola's Managed Service Preposition NSN's Revenues from Managed Services
  3.4.3 Huawei China Unicom Shanghai
  3.4.4 Alcatel Lucent
  3.4.5 ZTE
  3.4.6 HP
  3.4.7 Accenture
  3.4.8 IBM
3.5 Other Managed Service Providers
  3.5.1 Inter Systems IT Ltd
  3.5.2 GTL
  3.5.3 BT
  3.5.4 MLL Telecom
3.6 Hosted Solution Providers
  3.6.1 WIN
  3.6.2 Motricity
  3.6.3 Amdocs
3.7 Case Studies
  3.7.1 NSN and SK Telecom
  3.7.2 Transmode and Net4mobility
  3.7.3 Ericsson and Clearwire
  3.7.4 Ericsson and TDC
  3.7.5 Etisalat Nigeria and Alcatel Lucent
  3.7.6 Bharti Airtel and IBM
  3.7.7 Ericsson and Telenor, Sweden
  3.7.8 SAP and China Telecom
  3.7.9 Orange and ZTE
  3.7.10 Vodacom Tanzania and NSN


4.1Opportunities to Embrace New Business Models
4.2 Wholesale Business Model with LTE
  4.2.1 How can Wholesale Players Serve the Outsourcing and Managed-services needs of MNOs?
  4.2.2 Yota
  4.2.3 Light Squared
4.3 A Market with Single Network
4.4 Managed Data Services
4.5 Drivers of Data Revenue for MNO

4. 5.1 TRENDS IN MANAGED DATA Ericsson links with Akamai for Mobile Content


5.1 State of the Global Wireless Industry
5.2 MNOs and their Competitive Landscape
5.3 Market Analysis
  5.3.1 Saturated Markets: Higher Revenues are not translating into higher Margins
  5.3.2 Emerging Markets: Focus Shifts from Customer Acquisition to Customer Retention
5.4 Return on Investment (ROI) from LTE Networks and Managed Services Proposition
5.5 Deployment Time for Traditional and Hosted Solution
5.6 Payback Period Comparison between Traditional and Hosted Solution Approach
5.7 OpEx Savings from Managed Services
  5.7.1 Cost Savings Scenarios
5.8 Managed Services Benefits for MNOs
  5.8.1 Risk Share with Vendors
  5.8.2 Reduce the need to partner with several content and application providers
  5.8.3 Reduce CapEx and OpEx
  5.8.4 Improve Bottom-line
  4.8.5 Maintain and Improve Network Quality
  5.8.6 Manage Resources Effectively
  5.8.7 Improve cash flow
  5.8.8 Improve Business focus
  5.8.9 Capitalise on short technology lifecycle
5.9 Risk associated with Managed Services
  5.9.1 Disruptions to Network Operations
  5.9.2 Fixed contracts can lead to a deadlock
  5.9.3 Vendor monitoring costs
  5.9.4 Use of Single NOC
  5.9.5 Failing to form relevant KPIs
  5.9.6 Getting locked with Single Vendor
  5.9.7 Vendor's creation of pipeline for its own products
  5.9.8 Losing technology expertise
  5.9.9 Hosting may result in Revenues Loss
  5.9.10 Additional risks with Managed Services and Hosting
5.10 Benefits of Managed Services When Applied to LTE
  5.10.1 Remarkable TCO reduction
  5.10.2 Fast roll-out of LTE Services and Coverage
  5.10.3 Risk Share with Vendors
  5.10.4 Improve Business focus
  5.10.5 New Opportunities for Incumbents to Increase Revenues
  5.10.6 Better Management of Legacy Networks
5.11 Opportunities and Threats to Managed Service Providers
5.12 Stakeholders in Successful Migration to Managed Services


6.1 Global Managed Services Market
6.2 Managed Services Market breakdown by Categories
  6.2.1 Network Managed Services
  6.2.2 Service-led Managed Services
6.3 Key Growth Areas for Managed Services
6.4 Managed Services Market Segmentation by Operator Type
  6.4.1 Which Operators will outsource? MNOVs
  6.4.2 New Entrants
6.5 Global Managed Networks Subscriber Base
6.6 Market Shares Controlled by Top Infrastructure Vendors
6.7 Analysing the Key Geographical Markets
  6.7.1 US
  6.7.2 Central and Latin America
  6.7.3 Western Europe
  6.7.4 Asia and Other Developing Economies India China
  6.7.5 Africa
6.8 Drivers for Pursuing Managed Services
6.9 Managed Services Adoption
6.10 Analysing the CapEx Requirement for LTE


7.1 Need to Adopt Lean Business Model
7.2 Challenges facing Managed Services Vendors
  7.2.1 Recommendations for Managed Service Providers
7.3 Some Questions to be considered by MNOs
  7.3.1 What is the Difference between Outsourcing and Managed Services?
  7.3.2 How do Managed Services affect Operator's Position on the Wireless Value Chain?
  7.3.3 Why are Vendors' Pushing for Managed Services?
  7.3.4 Why is operators' core competence changing?
  7.3.5 Is Managed Services a good Strategy in all Markets?
  7.3.6 Why it is better to take Holistic approach to Managed Services?
  7.3.7 Why Hosted solution is a Better Option for Some Operators?
  7.3.8 How do Managed Service Providers Deliver Savings, while maintaining the Quality?
  7.3.9 Why Managed Application Solution is the best way going forward?
  7.3.10 Is there a difference between Managed Services and Hosting?
  7.3.11 Why Managed Data Services are becoming Critical to MNO Existence?
  7.3.12 Why MNOs need to Embrace Managed Services when LTE already offers Lower Cost per Mega Bit?
  7.3.13 Can Managed Services help Operators to run their Legacy Networks?
  7.3.14 What is End-to-End Managed Services Proposition?
  7.3.15 What is the importance of SLA and KPIs in a Managed Services Contracts?
  7.3.16 Which MSPs will emerge as Winners in LTE Managed Services Market?


Chart 1.1: Fixed and Mobile Broadband subscribers (2009-2016)
Chart 1.2: Global LTE Subscribers (2011-2016)
Chart 3.1: Top Telecom Infrastructure Vendor Revenues (2009-2010)
Chart 3.2 - Global Telecoms Infrastructure Market Forecast 2011-2016
Chart 3.3: Vendor Market Share by Technology 2010 (2G/3G/4G)
Chart 3.4: LTE Contracts Won by Vendors (Q1 2011)
Chart 3.5: LTE Infrastructure Sales (2009-2016)
Chart 3.6: NSN's Split of Revenues by Segment (2009)
Chart 3.7: NSN's Split of Revenues by Segment (2010)
Chart 3.8: Huawei's Managed Services Contract sales
Chart 3.9: Huawei's Revenue breakdown by Segment (2011)
Chart 3.10: Huawei's Revenue breakdown by Segment (2016)
Chart 5.1: HSPA and LTE Subscribers (2009-2016)
Chart 5.2: Global Mobile Service Revenues (2011-2016)
Chart 5.3: Global Voice and Data Revenues (2010-2016)
Chart 5.4: Global Data Revenues (2010-2016)
Chart 5.5: Time to Market with Hosted Services
Chart 5.6: Payback Period with Hosted Services
Chart: 5.7 CapEx/OpEx ratio for a Typical Western European Operator
Chart 5.8: OpEx breakdown for a Typical Western European Operator
Chart 5.9: OpEx/CapEx breakdown By Geography
Chart 6.1: Global Managed Services Market Revenues in $billion (2009-2016)
Chart 6.2: Managed Services Revenues (Network Led Managed Services)
Chart 6.3: Managed Services Revenues (Service Led Managed Services)
Chart 6.4: Key Growth Sectors in Managed Services (Network Led)
Chart 6.5: Managed Services Segmentation by Operator Type (2011)
Chart 6.6: Managed Services Segmentation by Operator Type (2016)
Chart 6.7: % of Global Managed Network Subscriber Base (2009-2016)
Chart 6.8: Global Managed Network Subscriber Base (2009-2016)
Chart 6.9: Managed Services Market Share for Key MSPs (2011)
Chart 6.10: Managed Services Market Share for Key MSPs (2016)
Chart 6.11: Services Led Managed Services Market (2009-2016)
Chart 6.12: Managed Services Revenue Share by Geography (2016)
Chart 6.13: Reasons for Embracing Managed Services (2011)
Chart 6.14: Managed Services Adoption (2016)
Chart 6.15: CapEx for a Typical Western European Operator (2011)
Chart 6.16: Use of Managed Services with LTE (2016)
Chart 7.1: Managed Services vs. Infrastructure Revenues for Top MSPs (2016)
Figure E1.1: Traditional MNO Value Chain
Figure 1.1: MNO Options for Mastering Operational Excellence
Figure 1.2: Strategies for gaining Operational Efficiencies with LTE
Figure 1.3: MNO Value Chain with Managed Services and Network Sharing
Figure 1.4: Business Models Supported by Managed Services
Figure 2.1: Benefits of Hosting (Total cost per Month)
Figure 3.1: Approach to Managed Services
Figure 5.1: MNOs and their Competitive Landscape
Figure 5.2: Total Cost of Ownerships of Next Generation
Figure 7.1: Challenges Facing Network Equipment Vendors
Table 1.1: Factors Fuelling the Adoption of Managed Services
Table 2.1: Managed Services Trends
Table 2.2: Managed Services Categories
Table 2.3: List of Managed Services that will be used by LTE MNOs
Table 2.4: Benefits of Managed Services to MNOs
Table 2.5: Services Management Categories
Table 2.6: Hosting Benefits to MNOs
Table 2.7: Additional Investments to Utilise LTE Capabilities
Table 3.1: Managed Services Provider Types and their Portfolio
Table 3.2: List of Key Managed Services Providers
Table 3.3: Global Telecoms Infrastructure Market Forecast 2011-2016
Table 3.4: Tier 1 Infrastructure Vendors in the LTE Value Chain
Table 4.1: Latest Managed Services Contracts and their Significance
Table 4.2 Top MNO Priorities for Managed Data
Table 4.2: Change of Strategy at E Plus
Table 4.3: Data Revenue Drivers (2011-2016)
Table 4.4: Data Services Outsourcing Trends (2011-2016)
Table 5.1: Risks Associated with Managed Services
Table 5.2: Opportunities and Threats to MSPs
Table 5.3: Stakeholders in Managed Services Propositions
Table 6.1: Services Led Managed Services Market (2009-2016)
Table 6.2: MSP Market Share in Managed Services in India (2010)
Table 6.3: Drivers for Pursuing Managed Services
Table 6.4: Hindrances in Pursuing Managed Services
Table 7.1: Managed Services SWOT Analysis
Table 7.2 Difference between Outsourcing and Managed Services


Alcatel Lucent
ATOS origin
Bharti Airtel
Byte mobile
Cell C, South Africa
China Mobile
China Telecom
China Unicom, Shanghai
Clearwire, US,
Du (the second mobile operator in the UAE)
Emobile, Japan
Etisalat, Nigeria
Infosys Technologies
Juniper Networks
Leo Namibia (a subsidiary of Orascom Telecom Company Telcel Globe Ltd)
LightSquared, US
MLL Telecom
NII( Nextel) Latin America
Orange, Uganda
Orange, UK
Polkometel, Poland
SK Telecom
Sprint Nextel, US
Tata Communications
Tech Mahindra
Telcel Globe
Telenor, Sweden
Telia Sonera (Ncell, Nepal)
Vodacom, Tanzania
Vodafone Hutchison Australia (VHA)
Yota, Russia
Zain, East Africa
Zong (China Telecom)
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