The telecom infrastructure services (TIS) market grew two percent in 3Q12 mainly due to strong LTE (News - Alert) deployments and to a lesser extent managed services, according to TBR’s new report. Maintenance service also grew during this period, mainly driven by the need to support newly installed infrastructure for coverage and capacity.
“Deployment services, which grew 7 percent year-to-year, led the TIS market in 3Q12,” said Chris Antlitz, an analyst in TBR’s Networking & Mobility Practice, in a statement. “This highlights how LTE deployments in the U.S., Japan and South Korea are moving the needle in global TIS spend.”
Meanwhile, professional services declined by 4.8 percent. However, according to TBR, decline in professional services will be short lived as operators inevitably require assistance in back-office system overhauls.
There will also be a huge demand for consultants as operators in developed markets shift their focus from deployment of new technologies to implementing business models that can fully leverage and monetize those assets in the not so distant future. Yet, currently the demand for professional services is weak as operators defer noncore projects and extend project duration due to the weak economy.
Regionally, TIS revenue grew fastest within the APAC region, up 7.2 percent year over year, driven by project closeouts in Japan and South Korea. The biggest beneficiaries of this growth include Ericsson (News - Alert) and Nokia Siemens. North America witnessed the next biggest growth as operators increased LTE deployments in these countries.
TIS revenue in EMEA declined as operators are affected by the economic uncertainty. In addition, TIS activity is expected to slow in 4Q12 as Japan and South Korea complete their initial LTE builds and China and India stall TD-LTE deployment until at least 2H13 due to a variety of political factors.
The research also estimates that Tier 1 North American operator capex budgets in 4Q12 will sharply increase from 4Q11 spend levels as network investments accelerate. Ericsson will be the primary beneficiary of this capex spend spike as it serves as the primary supplier of LTE equipment to six of the seven Tier 1 operators in the region.
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