news

Global Telecom Revenue Sluggish in 2017

Tortoise

Saturation and fierce competition are cutting deeply into global telecom revenue, which is anticipated to grow just 1.1 percent this year compared to last year, according to a new report by business information provider IHS Markit.

IHS Markit expects a 1.8 percent year-over-year decline in global telecom capital expenditures (CapEx) in 2017, mainly a result of a 13 percent year-over-year falloff in Chinese telecom CapEx. Asia Pacific outspends every other region in the world on telecom equipment.

IHS Markit's Michael Howard

IHS Markit’s Michael Howard

Michael Howard, IHS Markit’s executive director of research and analysis of carrier networks, tells Channel Partners that North America will see an uptick in telecom CapEx in 2018 due to the elimination of net neutrality rules as operators have said they will increase CapEx as a result.

“North America has $33 billion CapEx in 2017 of the $333 billion worldwide,” he said. “But the main spending patterns remain to upgrade capacity more for mobile broadband than fixed, change architectures of their networks to reflect changing traffic patterns.”

A transformation is underway in service-provider networks, epitomized by software-defined networking (SDN) and network functions virtualization (NFV), which involve the automation of processes such as customer interaction, as well as the addition of more telemetry and analytics with feedback loops into network operations, operations and business support systems, and service assurance, IHS Markit noted.

“Certainly operators see SDN and NFV as a primary new way to increase their agility to deliver new services for new revenue,” Howard said. “The top applications/services for revenue based on SDN/NFV are SD-WAN and managed branch services for enterprises.”

Big data is becoming more manageable, and operators are leveraging subscriber and network intelligence to support the automation and optimization of their networks using SDN, NFV and initial forays into using analytics, including artificial intelligence (AI) and machine learning (ML), according to the report.

“It’s always a challenge for operators to keep up with the latest technologies, Howard said. “Vendors drive DWDM and router and 4G/5G technologies innovations/upgrades, and it’s the operators who have been driving the SDN and NFV changes. All in all, operator revenues are flat and therefore their CapEx is relatively flat, so all of the changes have to be planned, designed and deployed within capital and resource constraints. The focus of SDN/NFV and new technologies is to reach for automation to reduce the (percentage) of OpEx that resides in operations, such that existing human resources can be brought to bear on the new technologies.”


Leave a comment

Your email address will not be published. Required fields are marked *

Polls

How do you approach customer MPLS networks in the age of SD-WAN?

View Results

Loading ... Loading ...
The ID is: 66913