The telecom infrastructure services market is on the decline across all geographies, except Asia Pacific, for the fourth quarter of 2015.
That’s according to Technology Business Research, who says continued strong spend of network infrastructure deployments and demand for a range of services is strengthening the market in the APAC region.
The analyst firm says the TIS market saw a decline of 1.5% year-to-year in 4Q15, largely due to the impact of the strengthened U.S. dollar.
TBR says this skewed results for many vendors.
“Strong TIS spend in China and India continued to buoy the global TIS market in 4Q15,” explains TBR Telecom senior analyst Chris Antlitz.
A big issue many vendors will need to grapple with is how to continue growing revenue once operator capex spend in China goes post-peak,” he says.
“We expect that inflection point to occur in mid-2016. Once that happens, growth will become more challenging for the TIS market to achieve because network deployment volumes are coming down on an aggregate level and will be only partly offset by growth in professional services for transformation,” explains Antlitz.
According to TBR, Ericsson continued to dominate the TIS market by revenue despite currency headwinds, but Huawei is on pace to take the leadership position in 2016 as it rides the China spend cycle and grows its IT business.
“The combination of Nokia and Alcatel-Lucent will create a TIS market dominated by three super-companies starting in 1Q16, which could prompt further acquisitions and alliances as vendors try to stay competitive,” Antlitz says.
Antlitz says forward-thinking vendors are getting ahead of this market shift from product-centric services to outcome-based services to capitalise on new growth areas, such as Internet of Things enablement and network transformation.
Recent partnerships and acquisitions such as Ericsson-Cisco and Accenture-S3 TV Technology, respectively, will open new doors for vendors to support operators’ evolution into digital service providers, Antlitz says.
“Leading with professional services is a key component of this strategy,” Antlitz adds.