Ovum says Telcos Spend on IT to Increase in 2015

economic growth

The telecoms industry is showing signs of recovery due to the positive economic scenario, and telecoms will be one of the top industries for IT spending in the next 12–18 months, according to global analyst firm Ovum.

Based on Ovum’s latest Telco IT Trends to Watch report*, telco IT budgets are on the rise, with a lot of investment directed at either optimizing network assets and infrastructure or improving service quality and the customer experience.

Trends to watch for telco IT in 2015:

•A brighter economic outlook and voracious demand for high-quality content and services on smart devices has renewed telco interest in the value they provide from a customer perspective and the quality of the customer experience.
•Omni-channel engagements will inform investment in CRM strategies for sales, marketing, and operations.
•Relevance and content of services, packages, and customer care will be a differentiator.
•Outsourcing engagements between telcos and IT service providers will intensify.

Peter Dykes, senior analyst for Telco IT and author of the report, says that telcos will continue to spend on IT in 2015 to enable new services and launch them in new markets, and lower their cost base and reduce churn and customer acquisition costs.

“The telecoms industry is witnessing a long-term shift in spend towards customer-oriented systems and processes to improve customer satisfaction,” says Dykes. “Investment will be geared towards telecoms infrastructure (cloud platforms and BSS/OSS systems to support LTE implementations) and online channels to support the move towards digital lifestyles.”

Ovum recommends that telcos develop a roadmap to become a customer-adaptive enterprise. If the customer perspective is not embedded in every product and service, telcos will not prosper. They need to adapt their organizational structure and business processes to encompass customer needs, viewing quality of service and experience from the customer perspective.

Vendors need to step up to the role of collaborative partners. With so much pressure to change and limited budgets to fund this, telcos will look to vendors to help them innovate in ways that do not cost them dearly. Vendors should create long-term partnerships with telcos and key stakeholders, including system integrators and consultants, to create the solutions to future problems.

“With LTE infrastructure largely in place, we are entering an era in which the judicious choice and deployment of support software will be critical to the profitability of CSPs. This will also require a complete change of mindset by CSPs and vendors alike. The switch to IP as the main bearer technology will have ramifications throughout the industry, and only those that are able to adapt will survive,” concludes Dykes.