Through 2017, global spending on telco IT will reach $60 billion, according to global analyst firm Ovum. The industry's revenue as a whole, however, will remain relatively flat, with a decline in spending on voice services, counterbalanced by growth in spending on mobile and fixed data services.
In its Global Telecoms' Technology Spending Forecast, Ovum says as growth slows, telcos must find alternatives to serving existing customers and turn a profit rather than simply growing a customer base.
Between 2013 and 2017, Ovum predicts that telco IT spending will reach $60 billion, with a compound annual growth rate (CAGR) of only 0.6 percent. It will primarily be driven by investments in packaged software and system integration. Spending in emerging markets such as Asia Pacific, the Middle East and Africa, and South and Central America will also drive global IT spending. Telco IT spending in North America will reach $17.5 billion by 2017 with a CAGR of 0.8 percent.
"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," said Shagun Bali, analyst for telecoms technology at Ovum and author of the report. "Telcos need to monetize new business models, leverage customer data by investing in analytics and define their response to over-the-top (OTT) players.
"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," Bali said.