tbr telecom infrastructure services benchmark review webinar slides

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Network Business QuarterlySM

2Q12 Telecom Infrastructure Services (TIS) Benchmark HighlightsTechnology Business Research Webinar Series

Oct. 9, 2012

TBR

2 TBR Webinar Series | 10.9.12 | www.tbri.com | ©2012 Technology Business Research Inc.

For further information, please contact:

Kate Price James McIlroyPractice Manager, Networking & Mobility Vice President of [email protected] [email protected]

Chris AntlitzNetworking & Mobility Practice [email protected]@chrisNMP

TIS Benchmark Contacts

Your presenter:

mailto:[email protected]




TBR


Introduction

LTE Deployments Managed Services

Managed Services

LTE Deployments

The TIS market grew more than 3% in 2Q12 due to LTE rollouts in North America, Japan and South Korea and managed services in EMEA and CALA

TBR


Key TIS Themes

Key TIS Themes in 2Q12

Managed services is leading growth in the global TIS market as operators prioritize cost reduction

North America remains an important growth region as LTE deployments accelerate

Alcatel-Lucent and NSN’s restructuring programs unlock opportunities for rivals to take market share

TBR


TIS

TIS – Overview

TIS Overview

• Opportunity model

• Market share

• Margin analysis

TBR identifies the largest and fastest-growing services segments, enabling vendors to adjust their services strategy and tactics to capitalize on the best market opportunities.

TBR’s research in Telecom Infrastructure Services (TIS) helps vendors identify growth opportunities and grow market share

Opportunity• More than $82 billion annual

spend by Global Communication Service Providers on professional, managed, deployment and maintenance services

• Identify leaders, strategies and growth opportunities in TIS industry to capture share from competitors and hold off rivals

TBR’s Quarterly TIS Benchmark covers the top 38 TIS suppliers by service type and region

DeploymentMaintenance

Professional ServicesManaged Services

North AmericaCALAEMEAAPAC

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TIS Company Coverage

TIS Company CoverageAccenture CSG Systems Logica

Agilent CTDI Microsoft

Alcatel-Lucent EMC NEC

Amdocs Ericsson Nokia Siemens

American Tower Fujitsu Oracle

Bechtel General Dynamics Orascom

Bouygues HP Samsung

Capgemini Huawei SAP

China Communications Construction Hyundai Engineering & Construction SBA Communications

Ciena IBM Tech Mahindra

Cisco Indus Towers Wipro

Convergys Jabil Circuit ZTE

Crown Castle Juniper

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Ericsson remained far ahead of competitors in 2Q12 as NSN slumped following its decision to exit unprofitable managed services contracts

Market Overview: Tier 1 TIS Market Leaders

Ericsson

Huawei

Alcatel-Lucent

NSN

IBM

HP

Accenture

Amdocs

Cisco

China Comm

-15%

-10%

-5%

0%

5%

10%

15%

20%

$- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00

Year

-to-

Year

Rev

enue

Gro

wth

TIS Revenue for all Lines of Business

Ten Largest TIS Suppliers 2Q12 Revenue (Billions USD)

SOURCE: TBR AND COMP ANY DATA

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Tier 2 suppliers are leveraging acquisitions and expanding geographic reach to compete with the scale of Tier 1s

Market Overview: Tier 2 TIS Market Leaders

Fujitsu

Oracle

SAP

ZTE

EMCJabil

Capgemini

NEC

Convergys

Bechtel

-20%

-10%

0%

10%

20%

30%

40%

50%

$- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70Year

-to-

Year

Rev

enue

Gro

wth

TIS Revenue for all Lines of Business

Second Tier TIS Suppliers 2Q12 Revenue (Billions USD)

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NOTE: SECOND TIER INCLUDES SUPPLIERS RANKED 11-20

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Software firms and niche market leaders like tower rental companies tend to reap the highest margins in the TIS industry

Market Overview: TIS Operating Margin Leaders

American Tower

Cisco

EMC

Crown Castle

SAPAgilent

Tech Mahindra

CTDI

Microsoft

Wipro

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

$0.00 $0.03 $0.06 $0.09 $0.12 $0.15 $0.18

TIS

Ope

rati

ng M

argi

n

TIS Operating Income for all Lines of Business (In Billions USD)

TIS 2Q12 Operating Margin Leaders


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Network modernizations in developed markets and coverage expansions in emerging markets drove deployment revenues in 2Q12

Segment Views: Deployment Services

Ericsson

China Comm

NSN

Alcatel-Lucent

Huawei

IBM

Cisco

Fujitsu

Bechtel

Orascom

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

$- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20

Year

-to-

Year

Rev

enue

Gro

wth

TIS Deployment Revenue

Ten Largest TIS Suppliers 2Q12 Deployment Revenue (Billions USD)

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Huawei and ZTE will take over some field maintenance contracts being exited by NSN and Alcatel-Lucent to grow market share

Segment Views: Maintenance Services

Ericsson

Huawei

NSN

SAP

Alcatel-Lucent

Oracle

Fujitsu

Cisco

EMC

IBM

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

$- $0.20 $0.40 $0.60 $0.80 $1.00Year

-to-

Year

Rev

enue

Gro

wth

TIS Maintenance Revenue

Ten Largest TIS Suppliers 2Q12 Maintenance Revenue (Billions USD)


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Revenue could slide further for IT services firms as equipment vendors boost their integration and consulting capabilities through acquisitions

Segment Views: Professional Services

IBM

Ericsson

NSN

Alcatel-Lucent

HP

Huawei

AccentureAmdocs

Cisco

Tech Mahindra

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

$- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80

Year

-to-

Year

Rev

enue

Gro

wth

TIS Professional Services Revenue

Ten Largest TIS Suppliers 2Q12 Professional Services Revenue (Billions USD)

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Some vendors reap unsustainably low margins from managed services, causing them to downsize in the market

Segment Views: Managed Services

AccentureEricsson

Alcatel-Lucent

IBM

HP

NSN

Amdocs

Huawei

Convergys

SAP

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

$- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20

Year

-to-

Year

Rev

enue

Gro

wth

TIS Managed Services Revenue

Ten Largest TIS Suppliers 2Q12 Managed Services Revenue (Billions USD)

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Sprint’s acceleration of Network Vision will support the North American TIS businesses of a range of vendors through 2013

Geographic Views: North America

IBM

Accenture

Alcatel-Lucent

Ericsson

Convergys

EMC

Cisco

HPNSN

Amdocs

-20%

-10%

0%

10%

20%

30%

40%

50%

$- $0.20 $0.40 $0.60 $0.80 $1.00

Year

-to-

Year

Rev

enue

Gro

wth

TIS North America Revenue

Ten Largest North American TIS Suppliers 2Q12 Revenue (Billions USD)

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Huawei and ZTE are consolidating their positions in MEA and finding European operators are more willing to use their lower priced services

Geographic Views: EMEA

Ericsson

IBM

Huawei

NSN

Accenture

HP

Alcatel-Lucent

SAP

China Comm

Capgemini

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

$- $0.30 $0.60 $0.90 $1.20 $1.50 $1.80

Year

-to-

Year

Rev

enue

Gro

wth

TIS EMEA Revenue

Ten Largest EMEA TIS Suppliers 2Q12 Revenue (Billions USD) TBR


TBR


Network rollout revenues will drive growth in 2013 as China invests in fixed broadband and China- and India-based carriers build out LTE networks

Geographic Views: APAC

NSN

IBM

Fujitsu

Ericsson

Huawei

ZTE

Alcatel-Lucent

NEC

HP

China Comm

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

$- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20

Year

-to-

Year

Rev

enue

Gro

wth

TIS APAC Revenue

Ten Largest APAC TIS Suppliers 2Q12 Revenue (Billions USD) TBR


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CALA operators pushed forward with network upgrades and new deployments as governments in the region encourage development

Geographic Views: CALA

Huawei

Alcatel-Lucent

China Comm

Oracle

NSN

Ericsson

HP

ZTE

IBM

Amdocs

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

$- $0.10 $0.20 $0.30 $0.40

Year

-to-

Year

Rev

enue

Gro

wth

TIS CALA Revenue

Ten Largest CALA TIS Suppliers 2Q12 Revenue (Billions USD) TBR


TBR


Key TIS Themes

Key TIS Themes in 2Q12

Managed services is leading growth in the global TIS market as operators prioritize cost reduction

North America remains an important growth region as LTE deployments accelerate

Alcatel-Lucent and NSN’s restructuring programs will unlock opportunities for rivals to take market share

TBR


Q&A

Chris Antlitz

Analyst, Networking and Mobility Practice

[email protected]

@chrisNMP

Questions?



TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

About TBR

Technology Business Research (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.

Serving a global clientele, TBR provides timely and accurate market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996.

To learn how our analysts can address your unique business needs, please visit our website or contact us today.

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This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.


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